The Supreme Court (SC) on Monday said that the affidavit filed by the Centre on October 2 regarding the waiver of compound interests on loans under moratorium following the coronavirus disease (Covid-19) does not deal with several issues raised by various petitioners and asked the government and Reserve Bank of India (RBI) authorities to submit a revised response by October 13.A three-judge SC bench, headed by Justice Ashok Bhushan, noted that the Centre’s affidavit is silent regarding sector-specific measures recommended by the KV Kamath Committee’s report on September 7 and also did not share details about the steps taken for implementation of its own policy decisions.
“The affidavit does not deal with several issues raised in various petitions,” the bench, also comprising Justices R Subhash Reddy and MR Shah, noted in its order.
The court was hearing petitions seeking waiver of interests on payments of equated monthly installments (EMIs) between March and August 31, which was announced by RBI due to Covid-19 pandemic and the 68-day nationwide lockdown restrictions that were enforced from March 25 in a bid to contain the viral outbreak.The court asked the Central government and RBI to place on record various policy decisions and guidelines taken by it to implement their plans.
The Centre in its affidavit had said that small borrowers, who took loans up to Rs 2 crore, would get relief from the payment of compound interests during the six-month moratorium period.
An undersecretary in the Department of Financial Services, Ministry of Finance, has filed the affidavit on behalf of the Central government.
The waiver on compound interests during the six-month moratorium period between March 1 and August 31 will be available to the following categories of loans such as education, housing, consumer durable, credit card dues, auto, personal, , consumption, and also the borrowings made by micro, medium and small enterprises (MSME).However, the waiver will not apply to loans that exceed Rs 2 crore.
Many of the petitioners raised objection to the fact that the affidavit was silent on the exemption to be allowed to various sectors.
On September 7, the KV Kamath Committee had submitted the report, where it had identified 26 sectors for loan restructuring.
“There is no relief for the real estate sector. Loan restructuring has not been offered to us,” said senior counsel Aryama Sundaram, who represented Confederation of Real Estate Developers’ Associations of India (CREDAI), an apex organisation representing more than 11,940 real estate developers in the country.
The apex court also pulled up the Central government and the RBI authorities for not sharing details about the steps taken for implementation of their own policy decisions.
“The Centre and RBI should put out orders in a bid to make the public aware about what benefit has been extended,” the bench said.
Senior counsel V Giri, who represented RBI, assured the SC that it would be done.
“When will it be done? You have been saying that it will be done. It has been going on for a long time,” Justice Shah retorted.
The SC listed the case for the next hearing on October 13 when the Centre and RBI are expected to submit a revised response regarding the KV Kamath Committee recommendations and also about the steps taken by the authorities regarding the implementation of their own policy decisions.