TMI Blog2021 (3) TMI 1214X X X X Extracts X X X X X X X X Extracts X X X X ..... vil rights such as freedom of speech, religion etc. It is further observed that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait-jacket formula and this particularly true in case of legislation dealing with economic matters - This Court in the case of STATE OF MP VERSUS NANDLAL JAISWAL [ 1986 (10) TMI 321 - SUPREME COURT] has observed that the Government is entitled to make pragmatic adjustments which may be called for by particular circumstances. The court cannot strike down a policy decision taken by the State Government merely because it feels that another policy decision would have been fairer or wiser or more scientific or logical. The court can interfere only if the policy decision is patently arbitrary, discriminatory or mala fide. In the case of PEERLESS GENERAL FINANCE INVESTMENT CO. LTD. VERSUS RESERVE BANK OF INDIA [ 1992 (1) TMI 337 - SUPREME COURT] , it is observed and held by this Court that the function of the Court is to see that lawful authority is not abused but not to appropriate to itself the task entrusted to that authority. It is furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... measures to redress the financial strain faced by the industrial sector, particularly MSMEs due to the Corona Virus Pandemic. It appears that the writ Petitioner is not satisfied with the steps taken by the RBI vide notification dated 27.03.2020. According to the Petitioner, the Covid-19 Regulatory Package notified by the RBI vide notification dated 27.03.2020 insofar as the terms loans, working capital facilities and restructuring of Stressed Account is inadequate, ineffective and does not offer any substantial relief, aid or assistance to the industries particularly MSMEs. According to the Petitioner, the above-mentioned Regulatory Package will not in any manner salvage the MSMEs and help them recover from financial losses that have been caused due to the unforeseen circumstances. With the above broad grievances, it is prayed as under: (a) issue writ/writs including a writ of mandamus or any other writ or direction in the nature thereof, directing the Respondents to permit the lending institutions not to recover interest component from the industries particularly MSMEs on Term Loans and Working Capital Facilities availed by them for three months from 01.03.2020 to 31.05.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the moratorium period. It is also prayed to direct the RBI to extend the period of moratorium by another six months, without any interest being levied on the loans availed by the members of the Petitioner organisation. 1d. Writ Petition (Civil) No. 1024 of 2020 has been preferred Under Article 32 of the Constitution of India by the Petitioner - Confederation of Real Estate Developers Association of India (CREDAI), for and on behalf of the private real estate developers in Chhattisgarh, also challenging notification dated 27.03.2020 issued by the RBI to the extent charging interest on the loan amount during the moratorium period. It is also prayed for an appropriate writ, direction or order directing the Respondents - Union of India to take adequate measures of reliefs to the disaster affected persons in accordance with letter and spirit of Disaster Management Act, 2005, more particularly Sections 12 and 13 of the said Act, more particularly to the reliefs with respect to waiver of loan and/or interest on all kind of loans availed by the borrowers/disaster affected persons through a well informed and formulated policy. 1e. Writ Petition (Civil) No. 1025 of 2020 Under Article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rit Petition (Civil) No. 955 of 2020 Under Article 32 of the Constitution of India has been preferred by the CREDAI - HR for and on behalf of the real estate sector for an appropriate writ directing the Respondents - Union of India, RBI and others to provide such financial relief to its members, freezing all financial liabilities of such members towards banks and financial institutions. It is also further prayed to direct the RBI to apply Circular dated 27.03.2020 to all banks, non-banking financial companies, housing finance companies and other financial institutions compulsorily and mandatorily to all loan accounts without any discrimination or classification. 1i. Writ Petition (Civil) No. 506 of 2020 Under Article 32 of the Constitution of India has been preferred by one private limited company challenging notification dated 27.03.2020 issued by the RBI to the extent charging interest on the loan amount during the moratorium period. 1j. Writ Petition (Civil) Diary No. 12389 of 2020 Under Article 32 of the Constitution of India has been preferred by the Shopping Centres Association of India (SCAI) for and on behalf of its members who are engaging in Malls and Shopping Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pandemic is eased. It is also further prayed to direct the RBI to provide a special dispensation to the lenders to allow extension of the Scheduled Commercial Operation Date of projects under construction, due to delays in completion of under-construction projects on account of Covid-19 and the lockdown, by another one year while maintaining the standard asset categorisation. It is also further prayed to direct the Respondents to include Non-Convertible Debentures as part of the relief granted by the RBI in its notification dated 27.03.2020, as well as, any other Covid-19 related relief which may be granted. 1n. Writ Petition (Civil) No. 711 of 2020 Under Article 32 of the Constitution of India has been preferred by Coimbatore Jewellery Manufacturers Association for and on behalf of its members to declare that part of notification dated 27.03.2020 issued by the RBI, as extended by notification dated 23.05.2020, as ultra vires to the extent it charges interest on the loan amount during the moratorium period. It is also prayed to direct the Union of India and the RBI to provide relief in repayment of loan by not charging interest during the moratorium period declared by notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me. 1s. Writ Petition (Civil) No. 964 of 2020 Under Article 32 of the Constitution of India has been preferred by Chhattisgarh Laghu and Sahayak Udyog Sangh for and on behalf of its members declaring the portion of notification dated 27.03.2020 issued by the RBI, as extended by notification dated 23.05.2020, charging the interest and also interest on interest (penal interest) during the moratorium period as ultra vires. 1t. Writ Petition (Civil) No. 1029 of 2020 Under Article 32 of the Constitution of India has been preferred by an individual challenging notifications dated 27.03.2020 and 23.05.2020 to the extent charging interest on the loan amount during the moratorium period. 1u. Writ Petition (Civil) No. 1157 of 2020 Under Article 32 of the Constitution of India has been preferred by the Chhattisgarh Udyog Mahasangh also challenging notifications dated 27.03.2020 and 23.05.2020 to the extent charging interest/interest on interest (penal interest) on the loan amount during the moratorium period. It is also prayed to direct the Union of India to take adequate and effective measures of reliefs to the disaster affected persons in accordance with letter and spirit of Disast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d; (3) extension of moratorium period; and (4) there shall be sector-wise economic packages/reliefs. Submissions on behalf of the respective Petitioners 3. Shri Ravindra Shrivastava, learned Senior Advocate appearing on behalf of the respective Petitioners in Writ Petition (C) Nos. 964/2020, 1024/2020, 1025/2020, 1132/2020, 1157/2020 and 1178/2020 has made the following submissions: i) that this Court ought not to limit the scope for relief and directions only qua waiver of compound interest which is limited to a highly restricted segment of the class of borrowers. It is submitted that shorn of technicalities of pleadings and specific prayers, this Court must take cognizance in public interest of the severity and the magnitude of the disaster and mould the relief accordingly to extend an effective measure of relief to an utterly distressed class of people affected by the pandemic of Covid-19; ii) that Covid-19 pandemic is a disaster in itself of an unprecedented history. It undoubtedly requires disaster management; iii) that the disaster management must be and can only be addressed under the statutory regime of law enacted by the Parliament. The quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aster Management Authority being the foremost, seemingly omnipotent and omnipresent. It is submitted that the disaster management is defined in Section 2(e) of the Act; viii) that the disaster management is a continuous and integrated process of planning, organising, coordinating implementing measures which are necessary and expedient for ...Mitigation or reduction of risk of any disaster or its severity or consequences... . That the issues which arises squarely fall within the meaning and amplitude of disaster management which is statutorily mandated Under Section 2(e) of the Act; ix) that the word mitigation has been defined in Section 2(i) and the word resources has been defined in Section 2(p) of the DMA 2005; x) that in the present case the steps for disaster management have not been undertaken by the statutory authorities under the Act, which makes out a plain and simple case of issue of mandamus to put the statutory authorities in action for performing their duties under the law; xi) that while Section 11 mandates duty to draw up a plan for disaster management for the whole country, at least this Court has not been informed of any such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant data and undertaking a study by experts; xv) that Section 13 which casts duty upon the National Authority to recommend relief in the matter of repayment of loans and/or grant of fresh loans on concessional terms does not make any differentiation among the class of 'persons affected by disaster'. The class of persons affected by disaster is one integrated class as the Covid-19 pandemic has affected every single individual person, the difference may be of degree. Section 13 intends to provide relief in the matter of repayment of loans etc. to all the persons affected by the disaster and does not admit of any classification. While this much is the minimum scheme of law, the National Authority has not made any recommendation with regard to relief in the repayment of loans and/or for grant of fresh loans to persons affected by disaster on such concessional terms as may be appropriate. There has been a complete inaction on the part of the National Authority in performing the legal duty. It is submitted that any recommendations of the National Authority Under Section 13 of the DMA 2005 have not been brought to the notice of this Court; xvi) that some of the mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. The measures formulated by the Ministry of Finance and RBI have to have the approval and sanction of the National Authority which alone has the authority to make their recommendations; xviii) that even the government in discharge of executive functions and providing administrative response have to act as parens patriae which doctrine is embedded in the preamble of the Constitution. It is submitted that the government in democracy or any other government has to act only and only for the welfare of the people. In support of his submission, reliance is placed on the decision of this Court in the case of Charan Lal Sahu v. Union of India, (1990) 1 SCC 613 (paragraph 35). It is submitted that therefore when the doctrine of parens patriae gets attracted, the lack of resources or financial considerations resulting in denial of relief to the needy persons affected by disaster is no answer and cannot be pressed into service. It is submitted that the government is simply bound to arrange its coffers in such a manner that the relief cannot be denied. Reliance is placed upon the decision of this Court in the case of Union Carbide Corporation Limited v. Union of India, (199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r management and within its contemplation extension reliefs and concessions, is misconceived as matters of bounty and/or charity described as ex-gratia. The distressed class of persons affected by the disaster are entitled to reliefs and concessions as a matter of right because that flows from the legal and statutory duty imposed by the statutory law of Parliament - DMA 2005 and the supreme law of the land, i.e., the Constitution of India. It is submitted that it is because of this approach of a gratis underlying the scheme that both the statutory authorities and Union of India have miserably failed to address the issue in right perspective and grant relief and concessions to the persons affected by the disaster in an effective, meaningful and substantial manner; xxiii) that even the Scheme dated 23.10.2020 contains the eligibility criteria as under: 4. Eligibility criteria under the scheme (1) Borrowers in the following segments/classes of loans, who have loan accounts having sanctioned limits and outstanding amount of not exceeding Rs. 2 crore [aggregate of all facilities with lending institutions] as on 29.02.2020, shall be eligible under the Sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not exceed 2 crores as on 29.02.2020; iv. That the account should be standard as on 29.02.2020 i.e. the loan should not be a non performing asset as on that date. It is submitted that the eligibility criteria enshrined in para 4 of the scheme has stark contrast with affidavit dated 02.10.2020. It is submitted that the Ministry of Finance has added more and drastic conditions reducing it to an illusion of reliefs and concessions. The arbitrary and irrational criteria is so striking that the scheme is virtually nugatory. In the first place, para 18 of the affidavit dated 02.10.2020 as well as para 4 of the scheme, both make it evident that if the total exposure of the loan at the grant of sanction is more than Rs. 2 crores, the borrower will be ineligible irrespective of the actual outstanding. For example, if the borrower has been sanctioned a loan of Rs. 5 crores and has availed of the same, even though he might have repaid substantially bringing down the principal amount to less than Rs. 2 crores as on 29.02.2020 but because of the sanction of the loan amount of more than Rs. 2 crores, he stands ineligible. It is submitted that more remarkable is the condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought to be achieved whereas the object is clear, statutory, constitutional and singular, i.e., extending reliefs to ameliorate the distress and miseries of the distress class of persons which are severely hit by the disaster of pandemic and do constitute a sizable and significant class of persons affected by the disaster requiring disaster management; xxviii) that the impugned classification is based on whims and caprice of the executive rather than an objective and real consideration. No material is available on record to show the basis of the classification. The Union of India cannot seek to clothe a decision which is so evidently discriminatory and arbitrary under the protective shield of policy decision inasmuch as any policy can neither be arbitrary nor discriminatory. In support of his submissions, Shri Ravindra Shrivastava has heavily relied upon the decisions of this Court in the cases of Rattan Arya v. State of T.N. (1986) 3 SCC 385; State of W.B. v. Anwar Ali Sarkar 1952 SCR 284 : AIR 1952 SC 75 (paras 83 84); and D.S. Nakara v. Union of India, (1983) 1 SCC 305 (paras 13 14); xxix) that even within the class of classified eligible borrowers, the arbitra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ass of people, such as employees, businessmen, farmers, workers, industrialists, professionals etc. are beyond description. To a significant class of people, the impact of the disaster has threatened their very survival and meaningful existence of life and liberty. It is submitted that therefore it is a complete misconception of the Union of India that relief of waiver of compound interest is sufficient to provide redress within the meaning of Sections 12 and 13 of the DMA 2005. It is submitted that the measures of reliefs were required to be laid down sector and group wise classified on the basis of common denominating factors, which have not been done; xxxii) Now so far as the measures proposed by RBI vide circular dated 6.8.2020 is concerned, it is vehemently submitted that the same cannot be said to be a relief of 'disaster management' which otherwise is arbitrary and discriminatory. It is submitted that the RBI Circular dated 6.8.2020 is a sheet anchor of case of both the Union of India and the RBI. This circular seeks to provide for the resolution framework for Covid-19 based on the Prudential Framework for Resolution of Stressed Assets Directions 2019 dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y virtue of the conditions of eligibility in paragraph 2 thereof is per se discriminatory and arbitrary. MSME borrowers whose aggregate exposure to lending institutions collectively is Rs. 25 crores or less on 1.3.2020 are not eligible for resolution framework. This classification is solely arbitrary and is based on no intelligible differentia having nexus with the object. It is submitted that the resolution framework is applicable only to those borrowers who are having distress on account of Covid-19 but in what manner such factor would be determined is not provided for, leaving therefore, the benefit of the resolution framework to subjective satisfactory and arbitrariness of the banks, it has been left to the unguided, ultimate and final discretion of the banks to lay down their individual policies and framework creating gross inequality and introducing total subjectivity; xxxvii) It is further submitted by Shri Ravindra Shrivastava, learned Senior Advocate appearing on behalf of some of the Petitioners that the trigger for filing these petitions and the Court taking the cognizance thereof are conditions of exceeding distress, financial and otherwise which seriously imping ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther submitted in addition to what is submitted by Shri Ravindra Shrivastava, learned Senior Advocate that during the lock down due to Covid-19 pandemic, power sector is badly affected. It is submitted that therefore there shall be a special package of relief for the power sector. It is submitted that therefore not enabling/considering the impact of lockdown due to pandemic, vis- -vis power sector and not providing special package for the power sector, unequals are treated equally. It is submitted that therefore the NDMA/UOI/RBI must devise suitable and appropriate sector specific measures essentially for the continued operation of the power generation sector. 4.1. It is submitted that the RBI Circular relating to Covid-19 relief packages viz. impugned RBI notifications, RBI Circulars dated 6.8.2020, 7.9.2020 have left the option of providing relief to the discretion of lenders instead of making it mandatory. It is submitted that as per the aforesaid notifications, the lenders are permitted to grant a moratorium of three months on payment of all instalments for repayment of term loans and working capital facilities falling due during the moratorium period. It is submitted that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no data is collected with respect to impact on individual sectors. It is submitted that even as required under the DMA 2005, there is no national plan prepared while considering the disaster - Covid-19 pandemic. 5.2. It is further submitted that even the terms of reference of Kamath Committee are ex-facie contrary to the aim and object of policies framed by the RBI/UOI, which was primarily to mitigate and alleviate the debt burden of the borrowers. It is submitted that the Kamath Committee Report, (i) proceeds on the basis that businesses which were shut down due to Government action [i.e. National Lockdown] and defaulters. (ii) The Terms of Reference of Kamath Committee are only aligned for interest of the lending institutions and not for continuous viability of businesses as seen from the chart annexed. (iii) The stringent conditions so imposed are difficult to comply and will turn all businesses into NPA. (iv) Restructuring plan is required to be approved by December 2020 although the Real Estate sector has barely commenced functioning due to COVID - 19 restrictions i.e. the force majeure' even continues and no proposal is possible. (v) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2020 until 31st March, 2021 or complete normalcy is achieved, whichever is earlier. 8.2 All borrowers in the real estate sector must be granted the benefit of interest waiver (including interest on interest), as the case may be, till complete normalcy is achieved or till the Resolution Plan under Restructuring Policy is approved [if invoked], whichever is earlier. 8.3 Restructuring Policy dated 07.08.2020 and 07.09.2020 to be simplified, broad based and implemented across board without any classification so that the true object of bailing out the borrowers under stress [precipitated by the national disaster/pandemic/force majeure event] and supporting the revival of the Indian economy/its GDP through its focal sector i.e. real estate can be seamlessly achieved. 8.4 All accounts which have not been declared as NPA as on 01.03.2020 are to be made eligible for restructuring without any further provisioning of 10% by banks. 6. The other learned Advocates appearing for the other respective Petitioners, such as, Textile Association, Healthcare Sector, Hotelier Association, Shopping Centres and Malls, Travellers and other industries have by and large made the subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a responsible and measured response to mitigate the problems faced by the sudden outbreak of the pandemic and keeping in mind- (i) The financial stability of the economy; (ii) The additional unforeseen and unexpected financial burden imposed on the exchequer to provide relief packages to citizens at large, adversely affected due to the pandemic; (iii) The very nature of the pandemic whose duration remains uncertain; (iv) The difference in implications of the reliefs granted for various sectors; and (iv) The fact that the resources of any country would not be unlimited. It is further submitted that the Central Government has also taken a number of measures to mitigate financial suffering, which include, inter alia, the following: (i) Agriculture loans : 3% subvention on interest rate payable on prompt repayment has been made admissible despite availing moratorium. (ii) Housing loans: Subvention on interest rate under Pradhan Mantri Awas Yojna has been extended by one more year up to 31.03.2021. (iii) Small business borrowers: 2% subvention on interest rate has been introduced for small business loans under Pradhan Mantr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omplex issues that are required to be considered: (i) That there are a variety of borrows as stated above, namely corporate borrowers (including large industry and large enterprises), Micro, Small and Medium Enterprise (MSME) borrowers, and retail/personal borrowers which include, inter alia, borrowers for housing loans, education loans, vehicle loans, etc. (ii) That there are several categories of banks and other lending institutions that are required to be kept in view while taking financial and economic decisions that are very sensitive for financial stability of the country. These may include scheduled commercial banks (which include, inter alia, Regional Rural Banks, small finance banks, local area banks, nationalized banks, etc.), Urban Co-operative Banks (UCBs), State Co-operative Banks (StCBs) and District Central Co-operative Banks (DCCBs) that cater to rural credit in the country, Non-Banking Financial Companies (NBFCs), Housing Finance Companies (HFCs), all India financial institutions, etc. (iii) That the structuring of the loan in each category of bank/lending institution and each category of borrower would be different not only in terms of the rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urable long-term solution of debt restructuring. It is submitted that the revival of the stressed borrowers is contingent upon debt restructuring of their loans/dues rather than hinge on extending the moratorium. It is submitted that the RBI has come out with two circulars dated 6.8.2020, facilitating revival of real sector activities and mitigating the impact on the ultimate borrowers by enabling lenders to grant concessions to borrowers for Covid-19 related stress in personal, MSME and corporate loans. It is submitted that this would enable lenders to implement individual resolution plans in respect of the loans having stress on account of Covid-19 pandemic. It is submitted that the said approach would also enable continuance of classification of such loans as standard, i.e., without treating them as NPA. 7.8. It is submitted that the RBI Circulars dated 6.8.2020 take care of all categories of lending institutions and all categories of borrowings as aforesaid, while leaving the nature and the kind of the relief to be given to the lending institution since each category of lending institution would have its own bank/institution - specific financial scenario in terms of the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made to bring back the economic growth. Therefore, use of public resources for any category of stakeholders must be carefully calibrated. Unintended consequences can arise and financial stability itself could be imperilled, if due consideration is not given to all relevant aspects. 7.11. It is submitted that right from the initial entry of the pandemic in our country, which started facing its effects [including the financial impact], the Central Government has proactively taken steps either itself or through RBI, which already had their financial impact, which was/is required to be kept into consideration while taking further decisions either while granting moratorium which, in fact, is deferment [and not waiver] as well as while taking the present decision regarding relief in compounding of interest. The following steps taken by the Central Government have their own financial impacts which would require the Central Government to rationalise any kind of waiver at this stage as going any further than what is stipulated hereunder may be detrimental to the overall economic scenario, and the economy and the nation or the banking sector may not be able to take the financial constra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est was merely deferred and was never waived. It is submitted that even the borrowers have understood the difference between the waiver in the interest on loan and the deferment of payment of instalments for that loan and, therefore, a majority of the borrowers have, in fact, not taken the benefit of the moratorium, which is nothing but deferment of payment of instalments. 7.14. Now so far as the waiver of interest is concerned, it is submitted that if the Government were to consider waiver of interest on all the loans and advances to all classes and categories of borrowers corresponding to the six-month period for which the moratorium was made available under the relevant RBI circulars, the estimated amount is more than Rs. 6 lakh crores. It is submitted that if the banks were to bear this burden, it would necessarily wipe out a substantial and a major part of their net worth, rendering most of the banks unviable and raising a very serious question mark over their very survival. It is submitted that this was one of the main reasons why waiver of interest was not even contemplated and only payment of instalments was deferred. 7.15. It is submitted that even otherwise the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of borrowers. It is submitted that this category of borrowers, in whose case, the compounding of interest will be waived, would be MSME loans and personal loans up to Rs. 2 crores of the following categories: (i) MSME loans up to Rs. 2 crore (ii) Education loans up to Rs. 2 crore (iii) Housing loans up to Rs. 2 crore (iv) Consumer durable loans up to Rs. 2 crore (v) Credit card dues up to Rs. 2 crore (vi) Auto loans up to Rs. 2 crore (vii) Personal loans to professionals up to Rs. 2 crore (viii) Consumption loans up to Rs. 2 crore It is submitted that the aforesaid decision has been taken, after examining the possible fiscal scenario in case of a complete/partial waiver and after gathering the material details for reaching the decision-making process, and while keeping in mind the interest of particular class of borrowers during the unprecedented period the country is facing. 7.18. It is further submitted that the resolution framework announced by the RBI provides that loan accounts which slip into NPA between invocation and implementation may be upgraded as standard on the date of implementation itself. It is further s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been extended by one year, providing subsidy for purchase of residential real estate. It is submitted that so far as relief to MSME Sector is concerned, an Emergency Credit line up to Rs. 3 lakh crores, backed by 100% Government Guarantee, has been launched to enable MSMEs to get back to regular operations. It is submitted that Rs. 1.87 lakh crore has already been sanctioned with Credit Guarantee Scheme for Subordinate Debt has been launched to help stressed and NPA MSME units. It is submitted that 2% subvention on interest rate is being given for small business loans. 7.21. It is further submitted that with regard to reliefs sought by various Petitioners/applicants in terms of extension of moratorium, applicability of the resolution framework, fixation of interest rate, transmission of rate cuts, delinking of interest rate from credit rating of the borrower and moratorium on repayment of non-credit instruments that the setting of interest rates and other norms for restructuring which includes moratorium involves evaluating projections of cash flows and viability. This, in turn, requires expertise, technical knowledge of financing, and experience in dealing with the subject. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... events . It is submitted that by its very nature, such a global catastrophe cannot be either predicted or prevented nor can any straightjacket procedure for its management be laid down. Each country will have to respond to such global catastrophe in the best possible manner under the circumstances in the spheres of public health, finance etc. The present situation falls in the category of global catastrophe risk as stipulated in Clause 2.8 of the National Disaster Management Plan. 7.23.1. It is submitted that in light of the aforesaid, the responses and the reliefs measures taken by the nodal Ministries are required to be considered. It is submitted that it was not possible to lay down any straight-jacket methodology of dealing with such disaster and each country in the world is responding to the challenges in the best possible manner with rationalised utilization of resources. 7.23.2. It is submitted that in the context of the unprecedented position, the scheme of DMA 2005 is required to be examined. After referring to the Statement of Objects and Reasons of the DMA 2005, it is submitted by Shri Mehta, learned Solicitor General that the Statement of Objects and Reasons as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NDMA itself envisages that each category of disaster will be dealt with by a nodal ministry. 7.23.5. It is submitted that Covid-19 was a disaster of such a nature that it could not be confined to one nodal ministry. Whatever measures/reliefs were required to be taken/given were provided by every ministry in each and every way needed. It is submitted that the Ministry of Railways provided free rails for transport of migrants, Ministry of Health and Family Welfare dealt with the substantial part of disaster management namely taking care of public health and hospital infrastructure, Ministry of Agriculture Farmer Welfare provided for various reliefs in the agriculture sector, Ministry of Housing and Urban Affairs issued separate relief measures for real estate sector etc. Similarly, Ministry of Finance, whose role otherwise was to finance the measures undertaken by other Ministries also undertook several reliefs in terms of financial package and either directly or through RBI relief ensures for stressed accounts. 7.23.6. It is submitted that considering the very nature of the pandemic which was not confined to any specific geographic location but at PAN-India impact having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reas [like public health, medical infrastructure etc.] other than banking sectors. 7.24.2. Section 13 may perhaps be used in case of localized disasters like Bhopal Gas tragedy or earthquake in Gujarat. However, when a national disaster takes place, the disaster is to be managed through several ministries. Food Ministry will distribute food which would involve expenditure, agricultural ministry will give boost to the agricultural sector by various relief measures, Health Ministry will take charge of treatment and public health issues, Home Ministry will implement measures for prevention of spread and other ministries will have to do same in their respective spheres. 7.24.3. Use of the word may and shall would mean the entire economy of the country shall have to be divested and used in and through banking sector leaving all other areas untouched and even at the cost of national economy and the stability of the banking sector. It is submitted that this could never have been the intention of the legislature. In support of above, Shri Mehta, learned Solicitor General has relied upon the decisions of this Court in the cases of Pradip Kumar Maity v. Chinmoy Kumar Bhunia: (20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2020 also adequately addresses the various concerns expressed by the respective Petitioners. 7.25. It is submitted by Shri Mehta, learned Solicitor General that the packages/reliefs offered by the Central Government/RBI/Lenders are in the realm of policy decisions. It is submitted that a conscious decision has been taken after considering every pros and cons and considering various factors and the priorities in the larger public interest and the economy of the country. It is submitted that as observed and held by this Court in the case of Arun Kumar Agrawal v. Union of India (2013) 7 SCC 1 that the matters relating to economic issues, have always an element of trial and error and so long as a trial and error is bona fide and with best intentions, such decisions cannot be questioned as arbitrary, capricious or illegal. It is submitted that in the aforesaid decision in paragraph 43, this Court has considered the decision of the Supreme Court of the United States in the case of Metropolis Theatre Co. v. Chicago, which took the view that the problems of Government are practical ones and may justify, if they do not require, rough accommodation, illogical, if may be, and unscientific. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icy decision would have been fairer or wiser or more scientific or logical. The court can interfere only if the policy decision is patently arbitrary, discriminatory or mala fide. 7.25.4. On exercise of judicial review, Shri Mehta, learned Solicitor General has relied upon the following decisions of this Court, Arun Kumar Agrawal (supra); State of M.P. v. Nandlal Jaiswal, (1986) 4 SCC 566; BALCO Employees' Union (Regd.) v. Union of India, (2002) 2 SCC 333; Peerless General Finance and Investment Co. Ltd. (supra); Dalmia Cement (Bharat) Ltd. v. Union of India (1996) 10 SCC 104; Villianur Iyarkkai Padukappu Maiyam v. Union of India (2009) 7 SCC 561; Narmada Bachao Andolan v. Union of India, (2000) 10 SCC 664; and R.K. Garg v. Union of India (1981) 4 SCC 675. Reply on behalf of the Reserve Bank of India 8. Shri V. Giri, learned Senior Advocate appearing on behalf of the Reserve Bank of India has made the following submissions: i) that the RBI has been constituted by the provisions of Section 3 of the Reserve Bank of India Act, 1934 (for short, 'RBI Act'). It has been vested with the responsibility of superintendence and control of the banking business in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g detailed instructions qua the regulatory measures issued by way of the said Statement. That it provided for rescheduling of payments-term loans and working capital facilities. That the circular dated 27.03.2020 came to be further modified by the RBI vide Circulars dated 17.4.2020 titled 'Covid-19 Regulatory Package-Asset Classification and Provisioning' and 23.5.2020 titled 'Covid-19 Regulatory Package' whereby the moratorium period came to be extended by another three months, i.e., from 1.6.2020 to 31.8.2020 on payment of all instalments in respect of term loans; iv) that the aforesaid policies/circulars were issued with the objective of mitigating the burden of debt servicing brought about by disruptions on account of Covid-19 pandemic and to ensure the continuity of viable business. It is submitted that therefore, the regulatory package is, in its essence, in the nature of a moratorium/deferment and cannot be construed to be a waiver. It is submitted that, however, in order to ameliorate the difficulties faced by borrowers in repaying the accumulated interest for the moratorium/deferment period, it was further provided in the circular dated 23.5.2020 tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een announced by the RBI to mitigate the impact of Covid-19, which are as under: Major Policy Announcements to Mitigate the Impact of COVID-19 I. Reduction in Policy Rates March 27, 2020 Policy repo rate was reduced by 75 bps to 4.4 per cent. The reverse repo rate was reduced by 90 bps to 4.0 per cent creating an asymmetrical corridor [1] . April 17, 2020 The reverse repo rate was reduced by 25 basis points to 3.75 per cent. May 22, 2020 The policy repo rate was reduced by 40 bps to 4.0 per cent and reverse repo was reduced to 3.35 per cent. II. Liquidity Operations February 6, 2020 Announcement of long-term repo operations (LTROs) to provide durable liquidity at policy repo rate for 1-3 years to augment credit flows to productive sectors. The first such LTRO was conducted on February 17, 2020. March 12, 2020 It was decided to unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk loans to these sectors. III. Easing Financial Stress for the borrowers March 27, 2020 Announcement of regulatory measures to mitigate the burden of debt servicing and to ensure the continuity of viable businesses. The salient features included moratorium on payment of instalments for term loans and deferment of interest on working capital facilities, easing of working capital financing and exemption from classification of special mention account (SMA) and NPA on account of implementation of the above measures. April, 17, 2020 It was decided that in respect of all accounts for which lending institutions decide to grant moratorium or deferment, and which were standard as on March 1, 2020, the 90-day NPA norm shall exclude the moratorium period, i.e. there would be an asset classification standstill for all such account from March 1, 2020 to May 31, 2020. Recognising the challenges to resolution of stressed assets in the current volatile environment, the period for resolution plan under the 'Prudential Framework' was extended by 90 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or each while preparing the financial assumptions in respect of resolution plans. IV. Facilitating and incentivising bank credit flows February 6, 2019 Cash reserve ratio (CRR) exemption to scheduled commercial banks (SCBs) for a period of 5 years (from the date of origination of the loan or the tenure of the loan, whichever is earlier) for the amount equivalent to the incremental credit extended as retail loans for automobiles, residential housing and loans to micro, small and medium enterprises (MSMEs) during January 31, 2020 and July 31, 2020. March 27, 2020 The implementation of net stable funding ratio (NSFR) for banks was deferred by six months from April 1, 2020 to October 1, 2020. The implementation of the last tranche of 0.625 per cent of capital conservation buffer (CCB) for banks was deferred from March 31, 2020 to September 30, 2020. April 1, 2020 Based on the review and empirical analysis of counter cyclical capital buffer (CCyB) indicators, it was decided not to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted to assign zero per cent risk weight on the credit facilities extended under the scheme to the extent of guarantee coverage. August 6, 2020 Banks were permitted to reckon the funds infused by the promoters in their MSME units through loans availed under the Credit Guarantee Scheme for Subordinate Debt for stressed MSMEs issued by the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) as equity/quasi equity from the promoters for debt-equity computation. September 29, 2020 The permissible loan to value ratio (LTV) for loans against pledge of gold ornaments and jewellery for non-agricultural purposes was increased from 75 per cent to 90 per cent with a view to further mitigate the economic impact of the Covid 19 pandemic on households, entrepreneurs and small businesses. This enhanced LTV ratio will be applicable up to March 31, 2021 to enable the borrowers to tide over their temporary liquidity mismatches on account of COVID-19. October 9, 2020 The implementation of net stable funding ratio (NSFR) for banks was deferred by a further six ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t credit was extended by GoI for one more year, i.e., up to March 31, 2021, effective from April 1, 2020 and all extant operational instructions issued by the Reserve Bank under the captioned scheme shall continue to remain in force up to March 31, 2021. May 23, 2020 To alleviate genuine difficulties being faced by exporters in their production and realization cycles, the maximum permissible period of pre-shipment and post-shipment export credit sanctioned by banks was increased from one year to 15 months, for disbursements made up to July 31, 2020. 8.1. Now so far as the prayers for waiver of interest/interest on interest during the moratorium period is concerned, it is submitted that any waiver of interest on interest/compound interest will entail significant economic costs which cannot be absorbed by the banks without serious debt of their financials, which in turn will have huge implications for the depositors and the broader financial stability. It is submitted that, in fact, the government has come out with the ex-gratia scheme and the government has to bear the cost of the 'interest on interest' for MS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Resolution Framework, only those borrower accounts shall be eligible for resolution which were classified as standard, but not in default for more than 30 days with any lending institution as on March 1, 2020. 8.4. It is submitted that the resolution plans implemented under framework may inter alia rescheduling of payments, conversion of any interest accrued, or to be accrued, into another credit facility, or, granting of moratorium, based on an assessment of income streams of the borrower for two years. The reliefs for each borrower can be tailored by banks to meet the specific problem being faced by each borrower depending on need rather than have a broad-brush approach in dealing with the issue. 8.5. It is submitted that in terms of resolution framework, the RBI had constituted an Expert Committee under Shri K.V. Kamath to recommend to the RBI the required financial parameters, along with the sector specific benchmark ranges for such parameters, to be factored into each resolution plan. That terms of the reference of the Kamath Committee read as under: (a) To identify suitable financial parameters that should be factored into the assumptions underlying RP fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich are not big borrowers, their accounts are eligible to be restructured by the respective lending institutions as per RBI circular dated 6.8.2020. It is submitted that the banks are fully empowered to resolve Covid-19 related stress and customize reliefs to individual borrowers through grant of various concessions/reliefs, inter alia, in terms of i) alteration in the rate of interest and haircut on amount payable as interest; (ii) extension of the residual tenor of the loan, with or without moratorium, by up to two years; (iii) waiving penal interest and charges; (iv) rescheduling repayment; (v) converting accumulated interest into a fresh loan with a deferred payment schedule; and (vi) sanction of additional loan. 8.5.3. It is submitted that those accounts which are not covered by Kamath Committee recommendations were not supposed to wait for their restructuring for Kamath Committee Report to come out as the said restructuring is not linked to the parameters to be fixed by the said report. It is submitted that, as such, the RBI resolution framework offers significant and appropriate higher relief to borrowers in the 26 sectors identi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs even experts can seriously and doubtlessly differ. Courts cannot be expected to decide them without even the aid of experts. In support of his submission, Shri V. Giri, learned Senior Advocate has relied upon the following decisions, Peerless General Finance and Investment Co. Ltd. (supra); Shri Sitaram Sugar Co. Ltd. v. Union of India (1990) 3 SCC 223; Prag Ice Oil Mills v. Union of India AIR 1978 SC 1296; and P.T.R. Exports (Madras) P. Ltd. v. Union of India (1996) 5 SCC 268. 9.4. Making the above submissions and relying upon the above decisions, it is vehemently submitted by Shri V. Giri, learned Senior Advocate appearing on behalf of the RBI that the reliefs sought by the respective Petitioners, namely, waiver of interest on interest/compound interest and waiver of interest during the moratorium period; moratorium to be permitted for all accounts instead of being at the discretion of the lenders; extension of moratorium beyond 31.08.2020; packages/reliefs shall be sector-wise' discretion to come under the resolution framework of 6.8.2020 circulars should lie with the borrowers and not with the lenders, the respective Petitioners are not entitled to the said reliefs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g such a moratorium was to ease the financial stress that was being faced by borrowers by relaxing repayment pressures and improving access to working capital . Such measures would benefit those whose business was otherwise sound but became victims of the economic meltdown caused by the pandemic. In the case of individual borrowers having personal accounts, an entirely different approach was called for and this was finally addressed by the government in the package announced by it. It is submitted that on 6.8.2020 the RBI announced Resolution Framework for Covid-19 related stress thereby permitting banks to restructure loans of eligible borrowers. This was meticulously complied with by the banks by putting in place Board approved policies to grant relief to the borrowers. 10.3. It is submitted that the RBI constituted a Committee, known as Kamath Committee and Kamath Committee made its recommendations. It is submitted that Kamath Committee recommendations were the next step on addressing the economic problems being faced by businesses in India. It is submitted that in a number of cases the accounts had become irregular although not declared as NPA during this period and there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere may be a pandemic or a natural disaster which may not have that degree of economic fallout. It is submitted that to suggest that the moment there is a disaster, there is a duty cast upon the NDMA to afford relief from payment of interest would lead to absurd consequences. It is submitted that there is no power conferred under the Act by which the amount due by a private entity to another private entity can be written off or restructured. The relief Under Section 13 can be granted where interest is payable to the Government or by reimbursing the interest payable to a private entity. 10.7. Now so far as the relief sought of waiver of interest, it is submitted that IBA has 203 member banks including public sector banks, private sector banks, foreign banks and other banks including co-operative banks and regional rural banks. It is submitted that even on the occurrence of other calamities like cyclone, earthquake, drought or flood, banks do not waive interest but provide necessary relief packages to the borrowers. A waiver can only be granted by the Government out of the exchequer. It cannot come out of a system from banks, where credit created out of the depositor's fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn period due to Covid-19 Pandemic; vi) the last date for invocation of the resolution mechanism, namely, 31.12.2020 provided under the 6.8.2020 circular should be extended. 13. While considering the aforesaid submissions/reliefs sought, the scope of judicial review on the policy decisions in the field of economy and/or economic policy decisions and/or the policy decisions having financial implications which affects the economy of the country are required to be considered. 14. In catena of decisions and time and again this Court has considered the limited scope of judicial review in economic policy matters. From various decisions of this Court, this Court has consistently observed and held as under: i) The Court will not debate academic matters or concern itself with intricacies of trade and commerce; ii) It is neither within the domain of the courts nor the scope of judicial review to embark upon an enquiry as to whether a particular public policy is wise or whether better public policy can be evolved. Nor are the courts inclined to strike down a policy at the behest of a Petitioner merely because it has been urged that a different policy would have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its of different economic policies and consider whether a wiser or better one can be evolved. It is further observed that in the case of a policy decision on economic matters, the courts should be very circumspect in conducting an enquiry or investigation and must be more reluctant to impugn the judgment of the experts who may have arrived at a conclusion unless the court is satisfied that there is illegality in the decision itself. 14.5. In the case of Peerless General Finance and Investment Co. Ltd. (supra), it is observed and held by this Court that the function of the Court is to see that lawful authority is not abused but not to appropriate to itself the task entrusted to that authority. It is further observed that a public body invested with statutory powers must take care not to exceed or abuse its power. It must keep within the limits of the authority committed to it. It must act in good faith and it must act reasonably. Courts are not to interfere with economic policy which is the function of experts. It is not the function of the courts to sit in judgment over matters of economic policy and it must necessarily be left to the expert bodies. In such matters even exper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nner the court ought not to, without striking down the law, give any direction which is not in accordance with law. In other words, the court itself is not above the law. 14.7. In Prag Ice Oil Mills (supra), this Court observed as under: We do not think that it is the function of the Court to set in judgment over such matters of economic policy as must necessarily be left to the government of the day to decide. Many of them are matters of prediction of ultimate results on which even experts can seriously err and doubtlessly differ. Courts can certainly not be expected to decide them without even the aid of experts. 14.8. In P.T.R. Exports (Madras) P. Ltd. (supra), this Court observed as under: In matters of economic policy, it is settled law that the Court gives a large leeway to the executive and the legislature-Government would take diverse factors for formulating the policy in the overall larger interest of the economy of the country-The Court therefore would prefer to allow free play to the Government to evolve fiscal policy in the public interest and to act upon the same. 15. What is best in the national economy and in what manner and to what extent th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious financial packages/reliefs. Even the government also suffered due to lockdown, due to unprecedented covid-19 pandemic and also even lost the revenue in the form of GST. Still, the Government seems to have come out with various reliefs/packages. Government has its own financial constraints. Therefore, as such, no writ of mandamus can be issued directing the Government/RBI to announce/declare particular relief packages and/or to declare a particular policy, more particularly when many complex issues will arise in the field of economy and what will be the overall effect on the economy of the country for which the courts do not have any expertise and which shall be left to the Government and the RBI to announce the relief packages/economic policy in the form of reliefs on the basis of the advice of the experts. Therefore, no writ of mandamus can be issued. 20. No State or country can have unlimited resources to spend on any of its projects. That is why it only announces the financial reliefs/packages to the extent it is feasible. The court would not interfere with any opinion formed by the Government if it is based on the relevant facts and circumstances or based on expert advi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lm of the policy decisions. Not only that, if such reliefs are granted, it would seriously affect the banking sectors and it would have far reaching financial implications on the economy of the country. 23. Now so far as the relief sought of waiver of interest during the moratorium period is concerned, it is required to be noted that the bankers/lenders have to pay the interest to the depositors and their liability to pay the interest on the deposits continue even during the moratorium period. There shall be administrative expenses also required to be borne by the bankers/lenders. Continue payment of interest to depositors is not only one of the most essential banking activities but it shall be a huge responsibility owed by the banks to crores and crores of small depositors, pensioners etc. surviving on the interest from their deposits. There may be several welfare funds schemes, category specific and sector specific which might be surviving and are implemented on the strength of the interest generated from their deposits. All such welfare funds would depend on the income generated from their deposits for the survival of their members. Therefore, to grant such a relief of total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Any borrowing arrangement is a commercial contract between the lender and the borrower. RBI and/or the Union of India can provide for broad guidelines while recommending to give the reliefs. 26. Now so far as the submission on behalf of the Petitioners that the relief packages which are offered by the UOI/RBI/Bankers/Lenders are not sufficient and some better and/or more reliefs should be offered is concerned, it is not within the judicial scope of the courts to issue such directions. No mandamus can be issued to grant some more reliefs/packages. As observed hereinabove, the court cannot interfere with the economic policy decisions on the ground that either they are not sufficient or efficacious and/or some more reliefs should have been granted. The Government might have their own priorities and the Government has to spend in various fields and in the present case like health, medicine, providing food etc. Even as per the case of the Union of India and so stated in the counter filed on behalf of the Union of India and the RBI, so many policies have been announced to mitigate the impact of Covid-19 pandemic, which are referred to hereinabove. As can be seen that as such the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and/or violative of Article 14 of the Constitution of India. It cannot be said that any of the fundamental rights guaranteed under the Constitution are infringed and/or violated. Economic decisions are required to be taken keeping the larger economic scenario in mind. 27. Similarly, the relief sought that the moratorium period should be extended and/or the last date for invocation of the resolution mechanism namely 31.12.2020 provided under the 06.08.2020 circular should be extended are all in the realm of policy decisions. Even otherwise, almost five months were available to eligible borrowers when circular dated 6.8.2020 was notified providing for a separate resolution mechanism for Covid-19 related stressed assets. Therefore, sufficient time was given to invoke the resolution mechanism. Therefore, the Petitioners shall not be entitled to any reliefs, namely, (i) total waiver of interest during the moratorium period; (ii) to extend the period of moratorium; (iii) to extend the period for invocation of the resolution mechanism, namely 31.12.2020 provided under the 6.8.2020 circular; (iv) that there shall be sector-wise reliefs provided by the RB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents of the Government of India for the purpose of integrating the measures for prevention of disaster or the mitigation of its effects in their development plans and projects; (f) coordinate the enforcement and implementation of the policy and plan for disaster management; (g) recommend provision of funds for the purpose of mitigation; (h) provide such support to other countries affected by major disasters as may be determined by the Central Government; (i) take such other measures for the prevention of disaster, or the mitigation, or preparedness and capacity building for dealing with the threatening disaster situation or disaster as it may consider necessary; (j) lay down broad policies and guidelines for the functioning of the National Institute of Disaster Management. (3) The Chairperson of the National Authority shall, in the case of emergency, have power to exercise all or any of the powers of the National Authority but exercise of such powers shall be subject to ex post facto ratification by the National Authority. Section 7 provides for constitution of Advisory Committee by National Authority, which shall consist of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be taken for the prevention of disasters, or the mitigation of their effects; (b) measures to be taken for the integration of mitigation measures in the development plans; (c) measures to be taken for preparedness and capacity building to effectively respond to any threatening disaster situations or disaster; (d) roles and responsibilities of different Ministries or Departments of the Government of India in respect of measures specified in Clauses (a), (b) and (c). Section 12 of the Act provides for issuance of guidelines by the National Authority for minimum standards of relief. Section 13 of the Act provides for relief in repayment of loan etc., which shall be dealt with hereinbelow at an appropriate stage. Section 14 of the Act provides for establishment of State Disaster Management Authority. Similar provisions like National Disaster Management Authority are made with respect to State Disaster Management Authority. Section 33 provides for State Disaster Management Plan. Similar provisions are made with respect to District Disaster Management Authority and the District Plan. Section 35 of the Act provides for measures to be taken by the Central Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Ministries or Departments of Government of India.--It shall be the responsibility of every Ministry or Department of the Government of India to-- (a) take measures necessary for prevention of disasters, mitigation, preparedness and capacity-building in accordance with the guidelines laid down by the National Authority; (b) integrate into its development plans and projects, the measures for prevention or mitigation of disasters in accordance with the guidelines laid down by the National Authority; (c) respond effectively and promptly to any threatening disaster situation or disaster in accordance with the guidelines of the National Authority or the directions of the National Executive Committee in this behalf; (d) review the enactments administered by it, its policies, Rules and Regulations, with a view to incorporate therein the provisions necessary for prevention of disasters, mitigation or preparedness; (e) allocate funds for measures for prevention of disaster, mitigation, capacity-building and preparedness; (f) provide assistance to the National Authority and State Governments for-- (i) drawin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of disaster management. Various Ministries under the Central Government have to take various relief measures within their respective spheres for remedying the effects of the disaster. From the pleadings, it is borne out that in fact there is already a National Disaster Management Plan prepared even prior to the Covid-19 pandemic. Under the National Plan, there is a National Disaster Management Institutional Mechanism, which is reproduced hereinabove. The said plan also envisages nodal ministries for management of different disasters. For example, if the disaster is due to drought, Ministry of Agriculture and Farmers Welfare would be the nodal agency; if the disaster is due to floods, Ministry of Housing and Urban Affairs would be the nodal agency and if the disaster is due to biological emergencies , the Ministry of Health and Welfare would be the nodal agency. The disaster due to Covid-19 pandemic would fall under disaster due to biological emergencies . However, it appears that Covid-19 pandemic disaster is of such a nature that it could not be confined to one nodal ministry and whatever measures/reliefs are required to be taken/given are provided by every Ministry in each a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctors like power sector, real estate sector, MSME sector. The Central Government also promulgated Emergency Credit-Linked Guarantee Scheme of Rs. 3 lakh crores providing additional credit at lower rate of interest, with 100% Government Guarantee and no fresh collateral. The scheme has been extended with higher financial limits to 27 Covid-19 impacted sectors including restaurant and hotel sectors. The Central Government has also granted Rs. 20,000 crores Subordinate Debt with partial credit guarantee for over two lakhs stressed MSME units including from hospitality sector. The Central Government has also granted Rs. 50,000 crores Fund of Funds for providing growth equity to MSMEs. The Central Government has also come out with a new definition of MSMEs for improving turnover caps for better access of schemes/benefits. There are other reliefs also announced by the Central Government. The Central Government has also declared the moratorium from March to August, 2020. The proceedings under the IBC are also suspended during the moratorium period. 30.2. As per the provisions of the DMA 2005, the responsibilities and functions of the discharge of functions by the NDMA would be confined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interest on interest on the loans up to Rs. 2 crores. However, such relief is restricted to the following categories: (i) MSME loans up to Rs. 2 crore (ii) Education loans up to Rs. 2 crore (iii) Housing loans up to Rs. 2 crore (iv) Consumer durable loans up to Rs. 2 crore (v) Credit card dues up to Rs. 2 crore (vi) Auto loans up to Rs. 2 crore (vii) Personal loans to professionals up to Rs. 2 crore (viii) Consumption loans up to Rs. 2 crore There is no justification shown to restrict the relief of not charging interest on interest with respect to the loans up to Rs. 2 crores only and that too restricted to the aforesaid categories. What are the basis to restrict it to Rs. 2 crores are not forthcoming. Therefore, as such, there is no rational to restrict such relief with respect to loans up to Rs. 2 crores only. Even otherwise, it is required to be noted that the scheme dated 23.10.2020 granting relief/benefit of waiver of compound interest/interest on interest contains eligibility criteria and it provides that any borrower whose aggregate of all facilities with lending institution is more than Rs. 2 crores (sanctioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ratorium period; (ii) to extend the period of moratorium; (iii) to extend the period for invocation of the resolution mechanism, namely 31.12.2020 provided under the 6.8.2020 circular; (iv) that there shall be sector-wise reliefs provided by the RBI; and (v) that the Central Government/RBI must provide for some further reliefs over and above the relief packages already offered stand dismissed. Connected IAs stand disposed of. However, it is directed that there shall not be any charge of interest on interest/compound interest/penal interest for the period during the moratorium and any amount already recovered under the same head, namely, interest on interest/penal interest/compound interest shall be refunded to the concerned borrowers and to be given credit/adjusted in the next instalment of the loan account. All these petitions are partly allowed to the aforesaid extent only and as observed for the reliefs, the petitions are dismissed. Interim relief granted earlier not to declare the accounts of respective borrowers as NPA stands vacated. However, there shall be no order as to costs. Writ Petition (Civil) No. 955 of 2020 Writ Petition (Civil) No. 955 of 2020 stands disp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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