Loan Moratorium - Count 90 Days For NPA Declaration From March 23 Judgment : Plea In Supreme Court

The Supreme Court on Friday adjourned by two weeks a plea seeking clarification and modification of its 23rd March 2021 judgement whereby it vacated the stay on declaration of loan accounts as Non-Performing Assets.A bench comprising Justice DY Chandrachud and Justice MR Shah was hearing an application filed by Advocate Vishal Tiwari seeking a clarification that the period of declaring any account as NPA shall be reckoned from the date of the above judgement (March 23).The bench adjourned the hearing based on a letter seeking adjournment circulated by the petitioner.On September 3 last year, the Supreme Court had passed an interim order that the accounts, which were not NPAs as on August 31, should not be declared as NPAs. The order was passed while hearing petitions seeking extension of loan moratorium, waiver of compound interest etc., on account of the pandemic.While disposing of the petitions through judgment dated March 23rd 2021, the apex court lifted the restriction on the declaration of accounts as NPA. The Court had also observed that "We are of the opinion that there shall not be any charge of interest on interest/compound-interest/penal interest for the period during the moratorium from any of the borrowers and whatever the amount is recovered by way of interest on interest/compound interest/penal interest for the period during the moratorium, the same shall be refunded."The applicant has stated that as order of non-imposition of NPA by the banks against the borrowers has been vacated through the judgement dated 23rd March 2021, the banks in accordance to the law can impose NPA of a standard account if there arises default.Therefore, according to the applicant, it needs to be clarified and directed that the period of 90 days for the computation of declaration of standard account as Non-Performing Asset should start from the day of Supreme Court's judgement on 23rd March 2021.

Loan Moratorium - Count 90 Days For NPA Declaration From March 23 Judgment : Plea In Supreme Court

Srishti Ojha

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