[Loan Moratorium] "Centre's Affidavit Does Not Have Details As Required By Court": SC Asks Centre, RBI To File Proper Affidavit [Read Order]

Mehal Jain

5 Oct 2020 12:54 PM IST

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[Loan Moratorium] Centres Affidavit Does Not Have Details As Required By Court: SC Asks Centre, RBI To File Proper Affidavit [Read Order]

The Supreme Court on Monday granted a week's time to the central government, the RBI, the Indian Banks Association and the individual banks to file an additional affidavit bringing on record the policy decisions, deadlines, circulars and the response on all grievances raised.The bench headed by Justice Ashok Bhushan noted the submissions of the writ petitioners that October 2 affidavit of the...

The bench headed by Justice Ashok Bhushan noted the submissions of the writ petitioners that October 2 affidavit of the UOI does not deal with several issues. Although in its paragraph 18, the affidavit annonces the decision of the government to waive of compound interest on loans upto 2 crores of rupees in respect of 8 categories of borrowers, no consequential notifications or circulars issued by the central government or the RBI to implement the same have been brought on record.

There is a reference to the recommendations of the Kamath Committee but no report on that behalf has been brought on record. The bench was of the view that whatever recommendations have been made by the committee and accepted by the GOI and RBI need to be made public so that the benefit percolates to the concerned persons.

"The individual banks submit that their policy decisions will be brought on record. Further, that the policy decisions of the RBI and the UOI will be implemented", the bench recorded, noting the submission of senior Advocate Harish Salve for the bank's association for short time to bring on record individual policy decisions of the banks with respect to the decisions of the GOI and the RBI.

"We had directed the filing of an affidavit by the GOI along with all its decisions. The Affidavit now filed does not have the details as required by this court on 10.9.2020. The SG and Senior Advocate V. Giri seek further time to bring on record decisions, issues and circulars. The writ petitions pertaining to the various sectors seek time to file their reply", noted the bench, granting one week's time.

"The affidavit was filed on October 2, a copy of which we got only yesterday and that too through the media. But the affidavit is throwing around facts and figures without any basis. we need time to file a detailed reply. so your lordships have all the data to be able to apply your minds", began. Senior Advocate Kapil Sibal.

"You should have prepared your reply", said Justice Bhushan.

"We can't have done it in 2 days. We had to go through the RBI website! You gave them weeks after week! We only want a few days! Several things have not been replied to at all!", pressed Sibal. "My petition was filed in June. There is no counter affidavit till date", he added.

"The affidavit also says that the measure suggested will be placed before the Parliament!", pointed out Senior Advocate Rajeev Dutta for the individual customers.

"No, no, no, that is only to analyse the financial impact on the Government...there is some misconception, the decision will be implemented!", assured the SG.

"Also, the banks have started recapitalising the existing loans. That should be allowed. Also, the UOI has said no compound interest but the banks are still going ahead", pressed Dutta.

Advocate Siddharth Dutta also pressed that let the RBI undertake the proper exercise now and notice under section 31, IBC be issued.

Senior Advocate C. A. Sundaram argued, "The real estate sector. has been not dealt with at all, there has been no consideration. We need to show why we should be considered"

"Perhaps you could be considered under the recommendation of the Kamath Committee on restructuring", ventured Justice M. R. Shah.

"How can there be restructuring? All accounts, as of September 1, are non-standard", pressed Sibal and Sundaram.

"As far as time is concerned, it is Your Lordships prerogative. But so far as these different sectors and their grievances are concerned, all stakeholders have been considered.I have no objection to their filing a reply but I have an objection to their prayers!", interjected SG Tushar Mehta.

"You have not brought on record the Kamath Committee report! Your affidavit does not show what has been done with regard to the report. You should have done that!", reprimanded the bench, demanding why Senior Advocare V. Giri was appearing for the RBI in place of the SG.

"The report is in public domain. It is not like we are hiding it. We will bring it on record", said the SG.

"This has been considered by the Government. A large proportion of people are worried that an interest on interest would hit them very hard. There are many other recommendations also which the government has deliberated on. We will bring on record the report if Your Lordships want", said Giri.

"The issue is not of bringing the report on record, but implementing the report. None of these recommendations are such which could not have been implemented. The RBI and government have to issue certain directions so that people know what benefit has been awarded", countered Justice Bhushan.

When Giri submitted that the needful will be done, Justice Shah demanded "Why was it not done already? It should have been done. When will it be done? This has been going on for so long!"

"There has to be a proper restructuring scheme! There are so many poverty-stricken people!", added the Judge.

"Even the banks are being affected by this delay. Let the matter not be adjourned for more than 2-3 days if time is granted", intervened Senior Advocate Harish Salve for the IBA.

"Also, the PILs should be thrown out now...the others are prosecuting their case...I am not blaming anyone but there are petitions not even signed by lawyers...2-3 are being filed every week. Your Lordships need to decide what reliefs will be granted ultimately", he added.

"The issue is that the builders are not getting the benefits under the approved scheme due to a conflict pertaining to the loans we have taken", pointed out Senior Advocate Rakesh Dwivedi.

Senior counsel Huzefa Ahmadi also expressed dissatisfaction with the Kamath Committee report, indicating the RBI circular on standard accounts, suggesting the report is truncated.

"A Mehrishi Committee was also set up. It was on the same issue", submitted Sibal.

"That was only to collect data. That cannot be done here. But we will bring on record the report", assured the SG.

As the SG insisted that the court restrain itself to the financial sector, Giri also added that the bench is not sitting in review.

The bench considered requiring the RBI and the UOI to file affidavits by Friday, so that the rejoinder, if any, is submitted by Monday. The matter will now be heard on October 13.

The bench considered requiring the RBI and the UOI to file affidavits by Friday, so that the rejoinder, if any, is submitted by Monday.

*The SG sought time until Monday, advancing that there are a large number of issues to deal with.

"You asked for 2-3 days. We are giving you 2-3 days. This can't continue endlessly", said Justice Shah. "Mr. Salve said 2-3 days...but I will file the affidavit within the time", replied the SG.

"We don't underestimate you", said the bench, in a lighter vein.

The SG and Mr. Giri undertook to file a common consolidated affidavit, giving copies of the same to all counsel.

The matter will now be heard on October 13.

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[Loan Moratorium] "Centre's Affidavit Does Not Have Details As Required By Court": SC Asks Centre, RBI To File Proper Affidavit [Read Order]

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