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TMI Blog2020 (4) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... g Asset (NPA). 3. As per the petitioner, during the period 2010 - 2015, petitioner had availed bank loan facility from the respondent bank to a tune of Rs. 815 crores which has been paid in full. Thereafter between 2016 - 2018, respondent bank extended further loan facilities to the petitioner vide several sanction letters. 4. As per the petitioner, it had availed loan facilities to the tune of Rs. 1570 crores out of which, petitioner has repaid about Rs. 1056 crores apart from interest running into hundreds of crores. 5. The case of the petitioner is that due to out-break of COVID-19 and spread of the same across the globe in December, 2019, economic condition of the real estates industry was adversely affected. Petitioner had been regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... event of default as noticed hereinabove. 10. Learned counsel for the petitioner contends that in view of the pandemic COVID-19, RBI has issued several guidelines and advisories and brought into place regulatory polices to give benefit to the borrowers to easethe financial crisis. 11. Learned counsel for the petitioner relies on the Statement of Development Regulatory Policy dated 27.03.2020 wherein the object of the said policy issued by the RBI stated is to inter-alia ease the financial stress caused by COVID-19 disruptions by relaxing repayment pressures and improving access to working capital and further improving the functioning of markets in view of the high volatility experienced with the onset and spread of the pandemic. 12. Furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also the residual tenor, will be shifted across the board by three months after the moratorium period. Interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period." 14. Footnote 1 to the said clause provides that "Instalments will include the following payments falling due from March 1, 2020 to May 31, 2020: (i) principal and/or interest components; (ii) bullet repayments; (iii) Equated Monthly instalments; (iv) credit card dues." 15. The package also deals with the classification as Special Mention Account and Non-performing Asset pursuant to the economic fallout from COVID-19 and stipulates as under:- "Classification as Special Mention Account (SMA) and Non-Performing Asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner has also relied on Frequently Asked Questions (FAQs) issued by the Ministry of Finance and uploaded by Press Information Bureau particularly to Question No. 8. Question - 8 reads as under:- "QUESTION 8: What will be the impact of this relief by RBI on borrowers as far as reporting of default is concerned? ANSWER: Any delay in payment leads to default and gets reported to Credit Bureaus. For business loans of Rs. 5 Crores and above, the banks report the overdue position to RBI also through CRILC. As a result of this relief package, the overdue payments post 1stMarch 2020 will not be reported to Credit Bureaus/CRILC for three months. No penal interest or charges will be payable to the banks. Similarly, SEBI has allowed that C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Policies issued by RBI on 27th March, 2020 along with Regulatory Package issued on March 27, 2020 prima facie shows that the intention of the RBI is to maintain status quo as on 01.03.2020 with regard to the all the instalments payment for which had to be made post 01.03.2020 till 31.05.2020. 21. Paragraph 5 to 7 of the Regulatory Package with regard to Classification of Accounts also indicates that the intention of RBI is to maintain status quo with regard to the classification of accounts of the borrowers as they existed as on 01.03.2020. 22. As per the contention of the learned counsel for the respondent, prior to declaration of an account as NPA, the account has to go through the process of declaration as SMA-1 and SMA-2. 23. If a b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 31.05.2020 and status quo qua the classification as SMA-2 shall have to be maintained. 28. The effect of the same would be that for a period of three months there will be a moratorium from payment of that instalment. However, stipulated interest and penal charges shall continue to accrue on the outstanding payment even during the moratorium period. If post the moratorium period borrower fails to pay the said instalment, classification would then automatically change as per the IRAC guidelines. 29. Prima facie, I am of the view that the classification of the account of the petitioner as an NPA on 31.03.2020could not have been done by the respondent. Accordingly, status quo ante is restored qua the classification of the account of petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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