Why can one not refuse a payment made in rupees in India?

In India, one cannot refuse a payment made in rupees because, by law, the Reserve Bank of India (RBI) issues currency notes on behalf of the central government. The law legalizes the use of rupee as a medium of payment which cannot be refused in settling transactions in India.

NOTE – Rupee is widely accepted as the medium of exchange issued by the central bank i.e. the RBI on behalf of the central government. Also, by law, no other organization or individual is allowed to issue currency.