On Friday, the Supreme Court observed that it could not pass directions for financial relief. It disposed of a writ that sought relief in the form of loan moratorium, the extension of time under restructuring scheme and a temporary cease on the declaration of the NPA by financial banks in the wake of the Covid-19 pandemic.
A Bench comprising Hon’ble Justice MR Shah and Hon’ble Justice Ashok Bhushan observed that it is for the Government to assess the situation and take appropriate steps.
These observations were made in a plea filed by Advocate Vishal Tiwari, who submitted that Covid’s second wave made at least 1 million Indians jobless.
When the Court pointed out that RBI has announced specific financial packages as per circular dated 05.05.2021. The petitioner replied that the said packages did not sufficiently address the problems of middle-class families. Justice Bhushan observed that such policies were under the executive, and the Court cannot decide financial matters.
The Bench stated that the Government might have other pressing priorities and might have to spend money on migrants and vaccines. According to the Bench, judges were not experts on economic policies and referred to the Small Scale Industrial Manufacturers Association vs Union of India. The Court refused to extend the loan moratorium, and the same principle would apply in the current.
In its order, the Court noted that it was for the Government to assess the current situation and take appropriate steps.
Background of the Case:-
The plea sought directions to take remedial and practical steps to overcome and redress the hardship and financial stress faced by borrowers of the country due to the pandemic and lockdown. The Court was requested to direct banks to not auction any property of citizens/ companies for six months, and no account should be declared as NPA.
Another prayer was that there must be a loan moratorium for six months or till the Covid situation normalises.
Lastly, it was submitted that the Government had not provided any relief or financial support to people. As a result, many citizens are under tremendous pressure to maintain EMIs and are under threat of their account getting declared NPA.