The Supreme Court on Wednesday called for the government’s position on waiving interest on loan repayments during the moratorium and said it “cannot hide” behind the Reserve Bank of India (RBI). Reacting strongly to the centre’s comment that the move would hit businesses and banks, the Supreme Court said: “It happened because you locked up the whole country.”
The Supreme Court has asked the government to clarify its position by September 1 on a petition calling for interest on loan repayments in the moratorium during the coronavirus lockdown to be waived. The court said the center had not clarified its position even though it had “great powers” under the Disaster Management Act to grant the waiver.
“There cannot be one solution for everyone,” said Solicitor General Tushar Mehta.
“You can’t just focus on business and not on people’s suffering,” the Supreme Court said, noting that the case had been pending for a long time.
“The problem was created by locking down your (center). Now is not the time to think about the business. The plight of people must also be considered. You must tell us where you stand in two. things: the law on disaster management and whether interest on interest will be taken into account, ”said Judge Ashok Bhushan.
The petitioners wanted part of an RBI notification issued on March 27 to be rescinded so that interest could be revoked. They said that self-interest creates difficulties, obstacles and objections to the constitutionally guaranteed right to life.
The RBI had previously informed the court that there could be no interest relief during the moratorium on repayment of term loans, as such a move would endanger the financial health and stability of banks.
Reacting to the court’s scathing comment on “hiding behind the RBI,” Mr. Mehta said: “My Lordships cannot say that. We are working in coordination with the RBI.”
Senior lawyer Kapil Sibal, representing the petitioner, said the moratorium would end on August 31 and requested its extension. “As on September 1, we will be at fault,” he said.