Years after demonetisation, the Punjab and Haryana High Court has stepped in to resolve a case where money — seized by agencies, cleared by the Income Tax Department, and returned to its owner — remained unusable simply because it was in old currency. Ending the deadlock, Justice Jagmohan Bansal of the High Court has directed the Reserve Bank of India to exchange the notes within four weeks.In a ruling that slices through months of procedural limbo, Justice Bansal ordered the RBI to complete the exchange after being approached by the petitioner — effectively restoring value to currency that had already survived scrutiny by multiple state agencies.The case traces a familiar but troubling arc of post-demonetisation India. What began as a seizure — first by the Central Bureau of Investigation and then by the Income Tax Department — ended in official vindication when the tax authorities ordered the release of Rs 14.15 lakh. Yet, even after the money was formally returned through a “panchnama” in July 2025, it remained frozen in time: legally owned, but practically unusable.Appearing before Justice Bansal’s Bench on the petitioner’s behalf, counsel Dhiraj Chawla and Mehak Sharma contended that the CBI sealed her lockers and informed the Income Tax Department. Its officials, in turn, seized currency lying in her bank account.The Principal Chief Commissioner of Income Tax-1, Chandigarh, vide order dated July 17, 2025, ordered the release of the seized currency. “Pursuant to the order, the Income Tax Officer, Chandigarh, vide panchnama dated July 30, 2025, returned seized currency totaling Rs 14,15,000. The petitioner approached the RBI, seeking exchange of old currency but to no avail,” Chawla contended.The courtroom exchange saw a quiet but decisive concession. The RBI referred to the Ministry of Finance notification of May 12, 2017, permitting exchange of demonetised currency seized or confiscated by authorities, provided its details were duly recorded.“As per the notification, old currency confiscated or seized by any authority may be exchanged with new currency subject to the condition that details of currency were noted by the law enforcement agency or produced before the court,” the RBI’s counsel submitted.Once it was undisputed that the currency had been seized, documented, and returned, the court found no room for denial. Recording the position, Justice Bansal observed: “On being asked, counsel for the respondent-RBI confirmed that currency in question was seized by the Income Tax Department and finally released… As per the notification, it should be exchanged with new currency. He further submits that RBI would exchange only those currency notes which are mentioned in panchnama dated July 30, 2025.”With both sides aligned, the court formalised the outcome in clear terms: “The instant petition stands disposed of with a direction to respondent-RBI to exchange currency notes noticed in panchnama… The needful shall be done within four weeks…”Beyond the individual case, the ruling points to a larger reality of the demonetisation afterlife — once the State has taken, scrutinised, and returned money, it cannot leave its value suspended in a bureaucratic void.