[Loan Moratorium & Interest Waiver] "Highest Level Expert Committee Convening Meetings & Will Take Holistic Decision In Two Weeks": Centre Tells SC, Interim Order To Continue [Read Order]

The Centre informed Supreme Court on Thursday that an Expert Committee at the highest level had been constituted in order to take a decision on the issue of moratorium extension, interest during moratorium, interest on interest and other related issues. Solicitor General Tushar Mehta sought two weeks time in order to place on record a comprehensive affidavit in this regard before a bench of Justices Ashok Bhushan, R. Subhash Reddy & MR Shah .Court granted the Solicitor General two weeks to place on record the requisite affidavit detailing and observed that interim orders shall continue till the next date.".....In view of the aforesaid, we are inclined to grant two weeks to file appropriate affidavit. We make it clear that we shall consider different prayers made by petitioners on the next date"Further to this, Court noted directed that all decisions taken by the RBI, GOI or the banks should be placed before the Court for consideration.Bench was hearing plea(s) seeking extension of the Covid19 induced loan moratorium & waiver of accruing interest.When the hearing began, SG sought deferment of the hearing for two weeks. This led to submissions on behalf of various stakeholders, sectors & individual borrowers, whereby they insisted on issuance of interim orders for protection.Court had also stated that it was of the primary view that certain directives have to come from the RBI. "What you do, that is for you to decide. Some things have to decided by the GOI or by the RBI. Everything cannot be left to the banks," it remarked.#moratorium #interest— Live Law (@LiveLawIndia) September 10, 2020 Though the bench was inclined to pass interim orders initially, with respect of charging of interest on interest on loans during moratorium, it did not do so and listed the matter for further consideration on September 28.Senior Advocate Mukul Rohatgi for State Bank: We thought it is not adversarial, so we filed an intervention. Let us file a reply now.SG: I'm still not taking it adversarial. Petitioners appear to be so.#moratorium #InterestRate— Live Law (@LiveLawIndia) September 10, 2020 Senior Advocate CA Sundaram submitted that banks had now started debiting stating that there is no moratorium. "They say although we will not declare you NPA, your liabilities have started". 6 months interest being debited," he added.Senior Advocates Kapil Sibal & Rajiv Dutta expressed concerns of the Real Estate Sector and the individual borrowers respectively and batted for interim orders.Dutta: Important to remember that people are suffering. Imperative to make a statement for the Centre on non-charging of interest on interest.Sibal: (in context of Real Estate industry): Downgrading taking place and RBI has been protecting the downgrading.Senior Advocate Harish Salve made submissions on behalf of IBA and urged the court to not pass interim orders. Solicitor General Tushar Mehta also pointed out that the arguments were being made in an adversarial context and that this would prejudice not only various sectors but could have devastating consequences.Justice Bhushan: But what is the problem if that is done?SG: We are taking a holistic view to this. Sibal says something basis the financial express. Sundaram says something new at 10.30 am. Orders like this can have devastating consequences. #moratorium #InterestRate— Live Law (@LiveLawIndia) September 10, 2020 Next, the bench enquired Salve about the charging of penal interest on loans during moratorium. Salve replied by stating that there was no default interest which was being accrued and that only compound interest was. "The entire banking structure works on compound interest and that is what is being done," he said.Sibal refuted this and said that contracts operate in normal situations and that this was no normal condition.SG: All this will be taken into account holistically.Bench: Take concrete decision with clarity so that it is not adjourned now.SG: Government is considering every sector.#moratorium #InterestRate— Live Law (@LiveLawIndia) September 10, 2020 In light of the aforementioned, case stood adjourned.The Supreme Court on September 3 protected those accounts from being declared as Non-performing Assets (NPAs) which were not classified as NPAs on August 31 till case is disposed off.Advocates Shivani Khanwilkar, Saloni Shah, Manhar Singh Saini and Samit Shukla (from DSK Legal), Ashish Virmani, Abhimanyu Bhandari, Vinayak Bhandari, Ashok Lambat & Vishal Tiwari also appeared for Petitioner(sBackground:The bench was hearing a plea filed by an Agra resident Gajendra Sharma, who has sought a direction to declare the portion of the RBI's March 27 notification "as ultra vires to the extent it charges interest on the loan amount during the moratorium period, which create hardship to the petitioner being borrower and creates hindrance and obstruction in 'right to life' guaranteed by Article 21 of the Constitution of India".Earlier, the Supreme Court had said there was "no merit in...

[Loan Moratorium & Interest Waiver] "Highest Level Expert Committee Convening Meetings & Will Take Holistic Decision In Two Weeks": Centre Tells SC, Interim Order To Continue [Read Order]

Sanya Talwar

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