Increasing time to deposit old notes defeats demonetisation: Centre to SC

Amos Gonzales
July 17, 2017

"The very object of demonetisation and elimination of black money will be defeated if a window is opened for a further period.", the Centre said. It added that opening another window for exchanging Rs 500 and Rs 1,000 notes will result in "any number of benami transactions and make it hard to identify genuine cases from the bogus ones".

The Union Finance Ministry's stand came in response to the top court asking the Central government on July 4 to consider giving another opportunity to those who couldn't exchange their demonetised currency notes.

The Supreme Court today refused to pass any direction on a plea filed by a man seeking a direction to exchange over Rs 14 lakh, which were found in his bank locker of his late mother.

The government said it has taken a "conscious decision" that no necessity or any justifiable reason exists either in law or on facts to invoke its power under The Specified Bank Notes (Cessation of Liabilities) Act, 2017 to extend the period for exchanging the scrapped currency. Earlier in March, when the government passed an ordinance to help people who were overseas, a bench led by Chief Justice of India JS Khehar said: "Prime Minister in his address had said that people with genuine difficulties can deposit the demonetised currency even after December 30, 2016, till March 31, 2017 with the RBI branches". Even some educational institutions were found to have accepted fees in old currency notes after midnight of November 8.

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The Centre on Monday informed the Supreme Court that it will not offer any more chances to deposit or exchange demonetized notes to those who missed the December 30 deadline.

The demonetisation of Rs 500 and Rs 1,000 notes in November 2016 had caused a cash crunch in the country as the bills had made up almost 86% of the currency in circulation then. However, the RBI says it has still not determined the exact figure of the returned notes.

A few days ago, Reserve Bank of India Governor Urjit Patel told a parliamentary panel that lack of machines and infrastructure has resulted in the delay of counting the demonetised currency in the system. People had till December 30, 2016 to deposit their old notes in their accounts.

One of the pleas has also referred to the Specified Bank Notes Cessation of Liabilities Ordinance and said the government had breached the assurance.

Other reports by BadHub

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