On Monday, the Centre informed the Apex Court that a decision is likely in 2-3 days overcharging of interest by banks on instalments which were deferred during the moratorium period in view of the Coronavirus pandemic.

The Supreme Court asked the Centre to bring the decision on record and circulate the affidavit to the parties in a batch of petitions challenging interest on deferred instalments.

The Centre informed the Supreme Court that the matter has received very serious consideration and the decision making process is at a very advanced stage.

A bench headed by Justice Ashok Bhushan said that it would hear the batch of pleas filed by various industries, trade associations and individuals on Oct 5.

We will fix the matter for Monday (Oct 5). Whatever is your policy, whatever you have, you circulate it. We will take it up on Monday. We don't want any further adjournment, the bench also comprising Justices R Subhash Reddy and M R Shah observed.

The bench recorded the statement of Solicitor General Tushar Mehta, appearing for the Centre, that this issue is under active consideration of the Govt and a decision is likely to be taken within 2-3 days.

It said that Mehta shall endeavour to circulate the affidavit among the parties by Thursday so that the matter is heard on Oct 5.

The Bench said that the decision taken by the Govt should be brought on record along with an affidavit.

At the outset, Mehta said several economic issues are under consideration of the Govt.

The bench asked Mehta if he will be able to circulate his affidavit in advance to the parties concerned to which he agreed.

Senior Lawyer Rajiv Dutta, appearing for the main petitioner Gajendra Sharma, said this is a very important matter and banks are acting as if it is a very normal issue.

Mehta requested wait for 2-3 days so that the Govt can take a final call. I assure you that it is under consideration and it is at a very advanced stage .

On Sept 10, the top court had extended its interim order that no account is to be declared NPA till further orders after the Centre said an expert panel has been set up to look into the issue of interest being charged by banks on instalments deferred during the moratorium period due to COVID-19 pandemic.

The Govt at the highest level is considering all the issues raised before the Court in the pleas and a decision would be taken within two weeks, the Centre informed the Top Court.

The SC had directed that decisions taken by the Centre, the RBI and different banks be placed on record for consideration.

As noted above, on the next date of hearing, the specific instructions with regard to charging of compound interest and credit rating/downgrading during moratorium period shall be obtained, so that appropriate order be issued on the next date of hearing, the bench had said.

The Centre had sought two weeks' time to file an appropriate affidavit bringing on record the relevant decisions and directions of the Govt as well as the RBI.

It had said that everything has to be considered holistically and the Govt is considering all the sectors, for which an expert panel has been constituted.

The Supreme Court had asked the Centre that concrete decisions should be taken with clarity.

On Sept 3, in a relief to stressed borrowers who are facing hardship due to the impact of pandemic, the Apex Court had said that accounts which were not declared as non-performing assets till Aug 31 this year, shall not be declared NPA till further orders.

The petitions in the Supreme Court have raised issues pertaining to validity of RBI's March 27 circular which allowed lending institutions to grant moratorium on payment of instalments of term loans falling due between March 1, 2020 and May 31 this year due to the pandemic. Later, the period of moratorium was extended till Aug 31.

The Centre had recently told the Court that waiver of interest on deferred EMIs during moratorium period would be against the basic canons of finance and unfair to those who repaid loans as per schedule.

However, RBI has come out with a scheme which provides for extension of moratorium for 2 years to certain stressed borrowers, the Centre had informed the SC. 

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