On 10th September, a three-judge bench of the Hon’ble Supreme Court headed by Justices Ashok Bhushan and comprising Justice R Subhash Reddy and Justice MR Shah, while hearing a batch of petitions seeking waiver of interest or waiver of interest on interest on the suspended EMIs during the extended moratorium period, passed an interim order extending loan moratorium till 28th September 2020.
The Supreme Court took on record the submissions made by the solicitor general Tushar Mehta, representing the Centre. It noted that the Government at the highest level was considering all the issues in this batch of plea related to loan moratorium. The government shall within a period of two weeks file a concrete response holistically considering all the sectors. The court took on record the concerns raised by senior advocate Harish Salve for Indian Banking Association (IBA) with respect to individual borrowers apart from other sectors that individuals shall be adversely affected and decisions need to be taken through finance ministry and not just the RBI. Senior advocate Kapil Sibal, representing Real Estates Associations, argued that the downgrading of borrowers is still continuing and that borrowers must be protected against such downgrading.
The order noted that an expert committee had been constituted to look into all the issues and action will be taken by the government. The Court granted two weeks to file appropriate affidavit. The Court also noted that different prayers made by petitioners shall be considered on the next date. All decisions taken by the RBI, GOI or the banks should be placed before the Court for consideration.
On 3 September, the Supreme Court had passed an interim direction holding that the accounts not declared as non-performing asset (NPA) as on 31 August shall not be declared as NPAs till further orders.
In march, RBI had allowed a three-month moratorium from paying EMIs and other loans on payment of all term loans due between 1 March and 31 May. On 22nd May, RBI further extended moratorium on term loans till 31st August amid the nationwide lockdown due to covid-19.
The apex court adjourned the case for the last time, granting the Centre, Reserve Bank of India (RBI) and banks two weeks to work together and file a concrete reply on their stand on waiving of interest charged during the moratorium period.
