The Supreme Court on Friday closed the matter of interest charged in the course of six months of moratorium declared by the Reserve Bank of India (RBI) up to August finish, in lieu of the Corona pandemic, as a sequel to the government pledging to bear the price of the distinction involving compound and uncomplicated interest to make sure these taking loan are not burdened.
A 3-judge Bench of Justices Ashok Bhushan, R Subhash Reddy and M R Shah directed the Centre and its finance ministry to implement its choice dated October 23 “so that benefit as contemplated percolates to those for whom the financial benefits have been envisaged and extended.”
There is, nonetheless, no word in the judgment on the pleadings of the energy producers and other individuals who have been told in the final hearing to strategy the RBI counsel and the Centre and the RBI told to respond.
In its 24-web page judgment penned by Justice Bhushan, the Court narrated how one particular Gajendra Sharma of Agra knocked at the door of the leading court more than the banks nevertheless charging interest on the bank loans regardless of a moratorium declared by The Supreme Court in March. The petitioner had taken a residence loan of Rs 37.48 lakh from the ICICI Bank.
Sharma’s case was that when all the implies of livelihood have been curtailed by the Government by imposing a total lockdown pan India, he has no way to continue his perform and earn livelihood. On the leading of it, imposition of interest in the course of the moratorium period is ultra vires as it defeats the objective of permitting the moratorium of loans.
As the judgment notes, the petitioner’s case was that the notification qua payment of interest violates the principle of organic justice as the government on one particular hand ceased the operating of the people and on the other hand asking to spend the loan interest in the course of moratorium.
At the final hearing on November 19, senior advocate Rajiv Dutta appearing for Gajendra Sharma to dispose of his writ petition in view of the government’s affidavits to spend the interest portion, expressing satisfaction on the measures taken by the government with respect to the borrowers. He told the court that the government’s choice to forego interest on eight specified categories of loans paid up to Rs 2 crore has come as a good relief, the judgment noted.
Eight categories have been: MSME, education loan, housing loan, customer sturdy loan, credit card dues, automobile loans, individual loans to experts and consumption loans. The court mentioned the case of original petitioner Gajendra Sharma who had taken the housing loan is completely covered.