Supreme Court Refuses to Order Loan Moratorium Amid Second Wave of COVID

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Noting that the Court was unable to give instructions on financial assistance, the Supreme Court on Friday considered the statement of claim, which required financial compensation in the form of a new moratorium on the loan, an extension of the term under the restructuring scheme and a temporary suspension of the legal action by financial banks after pandemic COVID-19.

Rest bench consisting of Judges Ashok Bhushan and Mr Shah noted that the Government should assess the situation and take appropriate decisions.

The Bar reviewed the PIL motion filed by attorney Vishal Tiwari. The applicant claimed that the second wave of the pandemic had made at least Rs 1 crore of Indians unemployed.

When the court indicated that the Reserve Bank of India had announced some of the financial packages in accordance with the May 5 circular, the petitioner responded that it did not adequately address the problems of ordinary middle-class families.

“All this belongs to the sphere of executive policy. We cannot resolve financial issues, ”said Judge Bhushan.

“The government may have many urgent priorities. They have to spend money on vaccines for migrants … ”added Judge Shah.

The panel stated that the judges are not experts in economic policy matters. The court also indicated that in the judgment Small Industries Association (Regd) v. Union of India and Related CasesThe court refused to extend the moratorium on the loan, and the same principles apply to the present case.

“Financial indulgences and other measures are in the purview of the government and relate to policy issues. We believe that no instructions can be given in this regard, ”the bench said in the order.

“We note that the Indian government must assess the situation and make appropriate decisions,” added the bench in the order.

When the petitioner demanded that he be allowed to present representation before the Government, the panel told him that it did not “reject” the petition, but only “considered” it, with the observation that the Government should take appropriate action. solutions.

BACKGROUND

The application was submitted to provide guidance on how to take effective and corrective measures to correct and overcome the financial stress and difficulties faced by the country’s borrowers during the Second Wave of COVID19 and Lockdown.

The statement filed by attorney Vishal Tiwari called on the Court to order that no bank or financial institution should participate in the auction in respect of any property of any citizen, person, party or any legal entity for a period of six months. In addition, no account must be declared a Non-Performing Asset within six months.

The petition also requested instructions for the defendants to allow credit institutions to grant an interest-free moratorium on term loans and to defer the payment of loan installments for a period of six months or until the situation normalizes due to COVID-19.

In addition, it was argued that the central government and its concerned ministries, together with the Reserve Bank of India, could not bring any serious relief in the current situation to all those stressed sections of the population and individuals for whom existence and existence were in question.

In addition, the statement said that the sovereign has not announced any monetary indulgences or packages during this stressful time, and people are under tremendous pressure to maintain EMI and are always in danger of announcing NPA accounts.

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