Not our domain says SC while refusing to extend loan moratorium
New Delhi, Mar 23: The Supreme Court on Tuesday declined to interfere with the Government and RBI's loan moratorium policy. The apex court also refused to issue any directive on extension of moratorium scheme or bring more classes of borrowers under the scheme.
The apex directed that there should be no interest on interest or penal interest during the loan moratorium period on any borrower, irrespective of the loan amount, and directed the banks to refund to the borrowers such interest already collected. If refund is not possible, such interest should be adjusted
Announcing a verdict on pleas seeking extension of the loan moratorium and waiver of interest, Justice Shah said,"Courts are not advisers to the executive on matters of economic policy. Pandemic affected all sectors and govt had to take measures such as providing transport to migrants, etc. Even govt had no support during Pandemic and even GST loss that was incurred."
"We have considered reliefs independently. Waiver of complete interest is not possible as banks have to pay interest to account holders and pensioners. What is an economic policy or what will be financial package be will be decided by the Centre and RBI after detailed consultations," said Justice M R Shah who is part of the Bench.
"From various steps taken by Centre and RBI, it cannot be said that centre has not taken steps in backdrop of COVID19. Therefore petitioners will not be eligible for waiver of interest on interest, extend moratorium period, or sector specific reliefs," Justice M R Shah said.
The verdict was pronounced by a bench of Justices Ashok Bhushan, R Subhash Reddy and MR Shah.
The pleas, filed before the top court, sought an extension of the loan moratorium as well as waiver of interest on term loan EMIs during the six-month moratorium period.
These affidavits were filed following the top court's October 5 order asking them to place on record the K V Kamath committee recommendations on debt restructuring because of the COVID-19 related stress on various sectors as well as the notifications and circulars issued so far on loan moratorium.
The Reserve Bank of India (RBI) had on March 27, 2020 announced a moratorium on loan instalments due between March 1 and May 31. The moratorium period was later extended by three months till August 31, 2020.
On October 5, the court had observed that the Centre's affidavit did not contain necessary details and had asked the Centre and the RBI to file fresh ones in the case.
In the fresh affidavit, the Centre had referred to its various fiscal policy decisions and the Reserve Bank of India and expressed inability in expanding the scope of reliefs already provided to different sectors.