SC reaffirms that interest on loan be waived during lockdown period [Read Judgment]

The Supreme Court considering a writ petition on Friday stated that “Central Government was fully conscious of the difficulties faced by the various sectors and the stakeholders of various sectors and different measures by Finance Ministry have been taken in the above reference” after the orders of the central government were deemed satisfactory by the petitioner.

The petitioner filed a writ petition in the apex court seeking relief against the interest charged on his home loan during the lockdown period. The petitioner contended that during the pan-India lockdown due to the pandemic, as most of the population the petitioner was also unable to earn his livelihood, and even though the loan moratorium period was granted by the RBI but the interest was still charged during the moratorium period which caused an additional financial burden on the petitioner and defeated the purpose of the moratorium period. The petitioner sought a writ against the RBI notification to the extent it charged interest on loans during the moratorium period.

The affidavits were filed by both the central government and the Reserve Bank of India listing various steps and measures taken by the central government, ministry of finance, and the RBI mitigating the impact of the lockdown on various sectors. The learned solicitor general Tushar Mehta appeared for the central government submitted that the government was aware of the problems faced by the stakeholders of various sectors and that the government had taken multiple measures of relief for the same. Regarding the case of the petitioner, it was submitted that the government had waived loan interest on 8 categories of loans in a direction issued by the ministry of finance on 23/10/2020. The learned counsel for the RBI also submitted that the central bank had also taken follow up actions for implementation of the government’s directions regarding the loan interest waiver.

The bench of Justice Ashok Bhushan, Justice R Subhash Reddy, and Justice M.R. Shah while considering the case observed that the pandemic had slowed down the economic growth of the country and multiple businesses also suffered due to the same. The court recognized the steps taken by the government and remarked “it is clear that Central Government was fully conscious of the difficulties faced by the various sectors and the stakeholders of various sectors and different measures by Finance Ministry have been taken in the above reference”. Since the petitioner was satisfied by the government notice waiving the interest amount on loans during the moratorium period the court disposed of the writ petition directing the respondent to ensure the implementation of the government’s decision of waiver.   

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