The Supreme Court on Wednesday reprimanded the Central Government in the matter of exemption from interest during the term of the loan moratorium. The court while hearing the case told the central government that it cannot hide behind the Reserve Bank of India (RBI). The Centre’s comment that businesses and banks will be affected, the Supreme Court reacted sharply, saying, “This happened because you shut down the entire country.”
The Supreme Court has asked the government to clarify its stand on the petition by September 1, stating that the loan interest should be canceled during the corono virus lockdown. The court said that the Center has not made its stand clear even though there is ‘sufficient authority’ under the Disaster Management Act to grant exemption.
Solicitor General Tushar Mehta said, “One solution cannot be for everyone.” The court said, ‘You can not only take interest in business, you also have to know about the sufferings of the people.’
During the hearing of the case, Justice Ashok Bhushan said, ‘This problem is due to the lockdown of your (Central Government). This is not the time to think about business. The plight of the people also has to be considered. You have to clear your stand on two things: Calculation of Disaster Management Act and Interest on Interest.
In this case, the petitioner demanded that some part of the RBI notification issued on March 27 be canceled so that the interest could be waived. He said that interest creates difficulty, hindrance and objection to the right to life guaranteed under the Constitution. The RBI had earlier told the court that there could not be an interest waiver during the moratorium of a term loan as such a move would threaten the financial health and stability of banks. At the same time, on the Supreme Court’s response of ‘hiding behind RBI’, Mehta replied that My Lord you cannot say that. We are working closely with the RBI.