The Supreme Court on Monday adjourned the hearing till October 5 on pleas seeking an extension of the loan moratorium scheme, which was introduced during the coronavirus pandemic, and the waiver of accruing interests, Live Law reported.
In the last hearing on September 10, the court had given the Centre two more weeks’ time to come up with a concrete plan for all sectors in the loan moratorium scheme. The Centre had told the court that an expert committee at the highest level has been constituted to take a decision on moratorium extension, accruing interest during the moratorium, and other related matters.
During Monday’s hearing, Solicitor General Tushar Mehta sought an adjournment of the hearing, issuing an apology.
“I did not know that Your Lordships are sitting today only for this matter, or a letter would be circulated...but this matter has received very serious consideration of the central government,” Mehta told the court. “It is being considered at the highest level of decision-making and is at a very advanced stage.” The solicitor general added that the central government was likely to take a decision in the next 2-3 days, PTI reported.
The three-judge bench comprising Justices Ashok Bhushan, R Subhash Reddy and MR Shah asked the solicitor general if policy decisions would be circulated by Thursday. Mehta said it was a “complex matter”.
“Certain issues are beyond my control at that level,” the solicitor general replied, following which the bench adjourned the matter till October 5, asking the Centre to serve its policy decision by Thursday.
The court also allowed for its interim orders passed during earlier hearings to continue on the request of senior advocate Rajiv Dutta, who is representing main petitioner Gajendra Sharma. On September 3, the Supreme Court had ordered that accounts that have not been declared non-performing assets as on August 31 should not be declared so until it finishes hearing the pleas.
The bench also refused to pass any orders on the matter raised by an advocate in connection with the alleged harassment of the public by the banks regarding the loans.
Considering the economic impact of the lockdown imposed to fight the coronavirus crisis, the Reserve Bank of India had on March 27 said that banks would be allowed to grant a moratorium of three months on payment of all installments due between March 1 and May 31. On May 23, it said that banks can extend the moratorium until August 31. However, the RBI had said it would be imprudent to go for a forced waiver of interest, risking the financial viability of the banks it was mandated to regulate and putting the interests of the depositors in jeopardy.
Last month, the Centre said the loan moratorium scheme can be extended by a period of two years after the top court had criticised the Centre for “hiding behind the RBI” without making its stand clear on the loan moratorium.
Mehta had told the court that several steps have been taken for the stressed sectors and pointed out that the Indian economy has contracted by 23% due to the coronavirus crisis. He said it was imperative that all stakeholders sit together and decide on interest payable on loans.