SC dissatisfied with affidavit on moratorium, interest waiver; orders Centre, RBI to file comprehensive reply

Dissatisfied with an affidavit filed on two petitions, seeking an extension of the moratorium period on the repayment of loans and waiver of interest on “loans up to Rs 2 crore” in the wake of the COVID-19 pandemic, the Supreme Court on Monday directed the central government and the Reserve Bank of India to file comprehensive replies within a week.

Observing that the affidavit did not deal with several issues in the case, a three-judge Bench, headed by Justice Ashok Bhushan, ordered them to file the replies by next Monday. The Bench slated the matter for further hearing on October 13.

It also observed that no consequential circular has been issued either by the RBI or any other authority, adding that the recommendations by the Kamath Committee have to be considered as well. Justice Bhusan said the report has to be circulated among the needy persons.

Meanwhile, the Confederation of Real Estate Developers’ Association of India (CREDAI), a party in the case, sought time to reply to the Centre’s affidavit. It submitted that a lot of facts and statistics, including one involving Rs 6 lakh crore, given by the government in its affidavit are without any basis.

The top court was hearing two petitions, filed by one Gajendra Sharma and lawyer Vishal Tiwari.

Tiwari said the Centre should also file an affidavit on the issue of the extension of the moratorium period. “Interim measures should be given,” Tiwari submitted.

The Centre had last week submitted in the affidavit that it has decided to waive compound interest (interest on interest) for a moratorium period of six months for Micro, Small and Medium Enterprises and personal loans up to Rs 2 crore.

The affidavit said any account becoming non-performing due to bank’s fault or any other delay, need not suffer from being labelled as NPA. It said the Securities and Exchange Board of India has already issued a circular on March 30, 2020, providing for relaxation from the recognition of default due to the moratorium.

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