COVID19: PIL In SC Seeks Waiver Of Interest On EMIs During Moratorium Period Of COVID Lockdown

A PIL has been moved in the Supreme Court seeking immediate intervention of the Court for setting aside the RBI Circular to the extent of its accrual of interest on term loans during moratorium.

The petition has been filed by Activist and Advocate Amit Sahni and seeks directions from the court to issue appropriate directions in this regard "so that Banks and Financial Institutions do not charge interest from its customers at least during the moratorium period in the larger public interest"

Vide its representations, the petition urges the Court for its intervention especially since "the Citizens are facing extreme hardship, whereby business and work has come to halt and the entire market has crashed"

On the other hand, the petitioner further avers that he makes it clear that he has not sought for a waiver of interest on EMIs loans but for waiver of Interest during moratorium.

"The Petitioner does not pray that the EMIs should be waived for certain period, however, it is prayed that no interest should be charged during the period of moratorium."

The Petitioner has averred that the Moratorium i.e a legal authorization to debtors to postpone payment, as announced by the Government vide its RBI Circular dated March 27, 2020, "is an eyewash" in so far as it provides that "the interest shall be chargeable during the moratorium period".

In light of this, the petitioner has contended that there is no "sense in paying additional interest along with the regular EMIs".

Therefore, the petition states that the State, being a Welfare State is duty bound to give relaxation to borrowers in this time of crisis, when people have been stripped off their jobs and incomes.

"The State cannot enrich itself or permit any other organization or institution to be enriched particularly when it is dealing with an Emergency, which has affected each and every segment of the society and it would not be fair to permit Banks/Financial Institutions to charge interest on the outstanding amount for the Moratorium Period, when citizens cannot work to comply the Government's instructions and are compulsorily incapacitated to generate funds" - the petition states.