Tag: Justice Shah

The Supreme Court of India in the extension of loan moratorium case has provided its verdict and the uncertainty over the actual stressed assets in the banking system will become more clear.

The Supreme Court noted that the scope of judicial review on economic policy decisions and policy decisions with affect on economy has to be considered. The apex court also noted that if only some sectors are not satisfied, court cannot intervene in such matters of policy.

Considering the reliefs independently the court decided that the complete interest is not possible as banks also have to pay interest to account holders and pensioners.

The court also noted that the it cannot be said the centre has not taken steps in the aftermath of Covid-19 pandemic and therefore petitioners will not be eligible for waiver of interest on interest, or demand extension of moratorium or sector specific reliefs.

On the waiver of interest on interest for loans upto Rs 2 crore, the apex court believes there’s no justification on the same.

The court also said that there shall be no interest on interest or compensation interest during the moratorium period irrespective of loan amount the same amount collected shall be refunded. If refund doesn’t seems possible the interest on interest collection can be adjusted in the next installment payable.

(The copy will be updated once the final judgement is out)