Mumbai: In a major development, Maharashtra Home Minister Anil Deshmukh on Saturday refused all allegations of the extortion made by former Mumbai Police Commissioner Param Bir Singh.

Mumbai Police's former Chief who was recently removed from the position on Saturday accused Deshmukh of running an extortion racket via a sensational letter.

In a reply to the charges, Anil Deshmukh on Twitter said, "The former Commissioner of Police, Param Bir Singh, has made false allegations in order to save himself as the involvement of Sachin Waze in Mukesh Ambani and Mansukh Hiren's case is becoming clearer from the investigation carried out so far and threads are leading to Mr Singh as well."

"Param Bir Singh should prove his allegations. I am filing a defamation suit against him," he was quoted as saying by news agency ANI.

On Saturday, Singh wrote a letter to CM Uddhav Thackeray where he stated that Deshmukh had set a target to multiple officers of collecting Rs 100 crore every month from restaurants, bars and pubs in Mumbai.

The letter read, "The Hon'ble Home Minister expressed to Shri Waze that he had a target to accumulate Rs 100 crores a month. For achieving the aforesaid target, the Hon'ble Home Minister told Shri Waze that there are about 1,750 bars, restaurants and other establishments in Mumbai and if a sum of Rs 2-3 lakh each was collected from each of them, a monthly collection of Rs 40-50 crore was achievable. The Hon'ble Home Minister added that the rest of the collection could be made from other sources."

Recently, Param Bir Singh was transferred to Home Guard in a fallout of the probe against suspended top cop Sachin Waze who is arrested in the case of a car full of explosives found near Reliance Industries' Head, Mukesh Ambani's residence Antilia on February 25.