No more chances to exchange demonetized notes: Centre tells Supreme Court

Centre refused to allow another opportunity to exchange old high denomination notes worth Rs 500 and Rs 1,000 that were demonetised a year ago.

However, the Ordinance, issued on December 30 last, had specified that only those who were overseas or armed forces personnel posted in remote areas or others who could give valid reasons for not being able to deposit the cancelled notes at banks, could deposit the demonetised currency notes of Rs 500 and Rs 1,000 currency notes till March 31. "Give us the reasons why despite having powers under the law, you did not create a category for those people who couldn't deposit the demonetised notes before December 30, 2016".

After being recommended by the Supreme Court to provide the people with a "window of opportunity" to deposit their old currency notes, Centre said the move would defeat the goal of the demonetisation drive.

The PM's announcement in November meant that within a few hours, 86 per cent of the cash in circulation was pulled.

In response to this, the government responded that such a chance would open doors for "any number of benami transactions", making it hard for the departments to separate "genuine cash from bogus ones", the report stated. The deadline to deposit the bills at the Reserve Bank of India was March-end 2017. It had warned the government against issuing orders if it did not do so.

The government said demonetisation lay bare the under-current of black money crippling the country.

"What if someone is terminally ill and could not deposit the money". The PM said the short notice was vital to ensure that black money holders were deprived of the opportunity to launder their money. "You can not be allowed to deprive a person of his money", a bench headed by Chief Justice JS Khehar had told solicitor general Ranjit Kumar.

The Centre said that the Ministry of Home Affairs had in July reported that as per intelligence agencies, there were reports of large scale misuse of the window for the exchange of the old currency notes.

The affidavit cited specific instances of how money was allegedly laundered and routed through accounts of shell companies and was layered through "intermediary" accounts before being received in accounts of bullion traders.

One of the pleas has also referred to the Specified Bank Notes Cessation of Liabilities Ordinance and said the government had breached the assurance. "The cases allegedly involve total amount of Rs 395.19 crore", it said.