Karnataka High Court recently issued a notice in a Public Interest Litigation seeking the extension of the moratorium period of the education loans seeing the unseen financial constrains that have come up due to the pandemic, in the notice it conceded to extend the moratorium period for the loans. The notice was issued to the Centre, the state Government and the Reserve Bank of India.
Case of the Petitioner
The petitioner prayed in the plea for the grant of extension in the moratorium period as the pandemic has affected the economy drastically. All the sectors are at a great loss, including the students. It stated a 2009 subsidiary scheme namely the Central Sector Subsidiary Scheme which was introduced by the Government in order to ensure no loss of education to any lot of students because of any sort of financial constrains.
The plea further explicitly stated the objective of the subsidiary scheme by stating that the CSIS objective was to provide full interest subsidy during the moratorium period on modern education loans without taking in any security or collateral in return. Moreover under the scheme the interest payable during the moratorium period, that is the course period and in addition one more year will be payable by the government for all those students who belong to a economically weaker class. The plea stated that the scheme is still in to play, however the applicability of the same is for those students whose parents have an annual income of less than 4.5 lakh per annum.
Thus a prayer was made by the petitioner to extend the moratorium period seeing the brunt of the pandemic that the parents are facing and thus in the ongoing circumstances it is quite unsuitable for the parents to meet the deadline.
Reasoning of the Court
The Karnataka High Court entertained the prayer for the grant of extension seeing the unseen situation and circumstances that have occurred due to the pandemic and thus issued order for the extension of the moratorium period. However the other two prayers in respect to the directions to be issued to the Union and State governments to either waive outstanding education loans with effect from March 1, or to waive the interest amount on all education loans for two years.
Thus, the Court rejected the pleas of waiver, however accepted the plea for the extension of the moratorium period. The matter is listed to be heard further on September 4.
Case Details
Before: Karnataka High Court
Bench: Hon’ble Mr. Justice Abhay Shrreniwas Oka and Mr. Ashok S kinagi
Case title: Dr. Ram Manohar Lohiya Thinkers Forum v. Union of India
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