The Supreme Court has pronounced its Judgment on Loan Moratorium granted by RBI amidst lockdown imposed by Government to curb the Pandemic.
Supreme Court has declined to interfere with the Govt’s loan moratorium policy. The Court also granted no waiver of compound interest for loans exceeding ₹2 Cr.
However the SupremeCourt orderered waiver of compund interest of all borrowers, including those exceeding ₹2 Cr, for the period during loan moratorium & financial bodies must refund/adjust the penal interest for all borrowers.
Supreme Court also refused to issue any directive on extension of moratorium scheme or bring more classes of borrowers under the scheme.
Supreme Court has said that Centre cannot be directed to ask banks to waive off interest on loans during the period of lockdowns caused by pandemic. Court said the moratorium on EMIs towards repayment of loans cannot be extended beyond August 31, 2020.
A Bench of Justice DY Chandrachud, Justice MR Shah and Justice Sanjiv Khanna after hearing RBI, Centre and Intervenors reserved the Judgment on December 17 last year.
The RBI vide its notification dated 27 Mrach 2020 permitted banks to grant moratorium on loan for a period of 3 months for installment fallinf due between 01 March 2020 to 31 May 2020, This was later extended upto 31 August 2020.
Initially a Petition was filed seeking extension of moratorium upto 31 December 2020, later the Petitioner sought relief upto 31 March 2021.
The Central Government opposed the Petition stating that since the Government is already “on top of it” so court may no entertain petition under Article 32.
There was another set of ple for waiver of interest on interest during moratorium period, which was disposed off by the bench of Justice Ashok Bhushan on 28 November 2020.