While hearing a clutch of petitions demanding a waiver of interest, or waiver of interest on interest component of the suspended monthly instalments during the moratorium period, the apex court had on Tuesday said it would hear them again on Wednesday. The top court had in June observed that the question was not of waiver of complete interest for the entire moratorium period but limited only to interest charged on interest by banks.
One of the pleas, filed by Agra resident Gajendra Sharma, sought a direction to declare the portion of the RBI’s March 27 notification as something beyond the bank’s legal power or authority. That is, to the extent that interest on the loan amount charged during the moratorium period creates a hardship to the petitioner being the borrower. It creates hindrance and obstruction in ‘right to life’ guaranteed by Article 21 of the Constitution.
Meanwhile, the Centre on Tuesday argued that the waiver of interest on deferred EMIs during the moratorium period would be against the basic canons of finance
and unfair to those who repaid loans on schedule. Solicitor General Tushar Mehta, appearing for the Centre and the RBI, told a Bench headed by Justice Ashok Bhushan that the moratorium period on repayment of loans amid the Covid-19 pandemic was extendable by up to two years.
"A waiver of the interest on interest during moratorium would also be against the basic canons of finance," the Centre had said in its affidavit.
The RBI had on August 6 provided a framework for lenders to implement resolution plans in respect of eligible loans. The resolution plan might involve "any action/ plan/ reorganisation including regularisation of the account by, inter alia, restructuring, which is described as an act in which a lender grants concession to the borrower and which may involve modification in terms of advances/ securities, which would generally include, among other things, alteration in payment amount/amount of installment/rate of interest," the affidavit said.
Besides concessions in the rate of interest, the framework under the RBI's circulars of August 6 also permitted lenders to allow a moratorium of up to two years, it said.