A bench of Justices Ashok Bhushan, Sanjay Kishan Kaul and MR Shah said these are not normal times, and it is a serious issue, as on one hand moratorium is granted and then, the interest is charged on loans during this period.
The Supreme Court on Thursday while hearing the issue of charging interest on loans during the moratorium period, has asked the Ministry of Finance for its response on whether the interest could be waived or should it continue during the moratorium period. The Apex Court has sought finance ministry's reply on interest on loans during the moratorium period after the RBI said it would not be prudent to go for a "forced waiver of interest" risking the financial viability of the banks.
The top court said there are two aspects under consideration in this matter — no interest payment on loans during the moratorium period and no interest to be charged on interest.
The matter came up in the Supreme Court after the Reserve Bank of India said the waiver of interest charges on EMIs during moratorium will lead to loss of 1 per cent of the GDP.
Not normal times... it's a serious issue: Supreme Court bench
A bench of Justices Ashok Bhushan, Sanjay Kishan Kaul and MR Shah said these are not normal times, and it is a serious issue, as on one hand moratorium is granted and then, the interest is charged on loans during this period. "There are two issues in this (matter). No interest during the moratorium period and no interest on interest", said Justice Bhushan.
Centre to consult finance ministry, file response
Solicitor General Tushar Mehta, representing the Centre, contended before the bench that he would consult the finance ministry and file a response to both the questions. The top court allowed Mehta to file a reply on or before June 12.
The observation from the bench came on a petition by Gajendra Sharma, where he sought a direction to declare the portion of RBI's March 27 notification as ultra vires to the extent it charges interest on the loan amount during the moratorium period.
Sharma's counsel, senior advocate Rajeev Dutta, told the court the Centre is looking at the profitability of the banks and cited the recent order by top court on middle seat row in Air India matter, where the non-scheduled flights are to bring the stranded Indians from abroad. Justice Bhushan said the court is well aware, and the economic aspect is not greater than the health of the people.
Sharma, a resident of Agra, contended that he is already facing financial hardship during the lockdown and obstruction in 'right to life' guaranteed by Article 21 of the Constitution. Dutta argued that RBI's position on the matter means that only banks should continue to earn profits, while the entire country struggles during Covid-19 pandemic, and told the court he would file a rejoinder on the RBI's reply.
Mehta contended before the court that he would consult the finance ministry on this issue, and then respond on the issue with both the finance ministry and RBI's response.
At the beginning of the matter, the bench expressed discontent that RBI's reply was leaked to the media before the matter came before the court. "Is RBI filing the reply first in the media and then in court?" said the court.
Dutta contended this is a method to sensationalize the matter. The bench said this should not repeat.
(With inputs from PTI, IANS)
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