The Supreme Court on Tuesday issued an opinion to the Center and Reserve Bank of India (RBI) challenging the decision to charge interest on loans despite the moratorium on repayment due to the extended national foreclosure.
A bench of Judges Ashok Bhushan, SK Kaul and BR Gavai published an opinion on the plea of Gajendra Sharma, owner of an optical store in Agra, who stated that “this action to charge interest during the period of moratorium is completely devastating, erroneous “and has caused an” obstruction “and hampered his” right to life “guaranteed by article 21 of the Constitution.
Solicitor General Tushar Mehta has said he will take instructions on this. It will be heard again after two weeks.
The petitioner urged the court to declare this part of the RBI’s March 27 notification on interest billing ultra vires, as it “creates difficulties in the current full national foreclosure scenario extended from time to time due to the Covid-19 epidemic “.
Sharma pointed out that although the RBI, through the notification, authorized all banks to grant a three-month moratorium on the payment of all installments due between March 1 and May 31, it “made clear that interest will continue to accrue on the unpaid portion of term loans during the moratorium period ”.
Sharma said he runs an optical store in Agra and has a total gross income of around Rs. 6.57 lakh per year. He had received a home loan and paid the IMEs without default.
The extended foreclosure, he said, had created “an immense burden” on his “budget because in addition to paying EMI on a home loan” he had to “pay his employees… and also manage the financial aspects of his home. and his family “.
“In the present scenario, when all livelihoods have been curtailed by the Indian government through the imposition of a full India-wide foreclosure… the applicant, being an Indian citizen, has no way of continue to work and earn a living… charging interest during the moratorium defeats the objective of allowing a moratorium on loans, ”he said.