New Delhi, August 26: The Supreme Court on Wednesday sought the government’s stand on waiving interest on loan repayments during the moratorium and said it “cannot hide” behind the Reserve Bank of India (RBI). Reacting sharply to the centre’s comment that the move would hit businesses and banks, the Supreme Court said: “This happened because you locked down the entire country.”
The Supreme Court has asked the government to make its stand clear by September 1 on a petition that asks that interest on loan repayment in the moratorium during the coronavirus lockdown be cancelled. The court said the centre had not clarified its stand even though it has “ample powers” under the Disaster Management Act to grant the waiver, NDTV reported.
“There cannot be a solution which is one-size fits all,” Solicitor General Tushar Mehta said. “You cannot be interested only in business and not about sufferings of people,” the Supreme Court said, noting that the matter had been hanging for a long time.
“The problem has been created by your (centre’s) lockdown. This is also not the time to consider about the business. The plight of people has to be considered also. You have to tell us your stand on two things: disaster management act and if the interest on interest will be accounted for,” said Justice Ashok Bhushan.
The petitioners wanted some portion of an RBI notification issued on March 27 to be cancelled so that interest could be waived. They said the interest creates hardship, hindrances and objection in right to life guaranteed under the constitution.
The RBI had informed the court earlier that there cannot be an interest waiver during moratorium on term loan repayment as such a move will put the financial health and stability of banks at risk.
Reacting to the court’s sharp comment about “hiding behind the RBI”, Mr Mehta said: “My Lordships may not say that. We are working in coordination with RBI.”
Senior lawyer Kapil Sibal, appearing for the petitioner, said the moratorium would end on August 31 and sought its extension. “As on September 1, we will be in default,” he said.