/Government opposes further loan moratorium

Government opposes further loan moratorium

NEW DELHI: The government on Friday cited constraints imposed by the country’s economic situation and the uncertainty over the Covid-19 pandemic to oppose any further Supreme Court relief by way of extending the loan moratorium scheme to other affected sectors.

The government, through Solicitor General Tushar Mehta, told a bench led by Justice Ashok Bhushan that it had already extended the loan moratorium scheme for small borrowers and waived interest on interest. “Any such relief sector-wise would be a problem under Article 32,” he said.

“There is already a mechanism (restructuring). Let them work out things under the mechanism,” the SG said. “Given the economic position of the country and the pandemic… no one knows when this situation will end,” he said.

Further relief would be difficult to extend to all affected sectors, including big borrowers, he argued.

Justice M R Shah wondered if the government was saying that there was a line that must not be crossed. Justice Bhushan insisted that the bench would take a call on this once it had heard out all the other petitioners in the court, including Credai, the power producers, mall owners and jewellery shop owners.

The bench has already disposed of a petition seeking relief for small borrowers. The government had waived off interest on interest for them at the court’s insistence.

Appearing for Credai, senior advocate Kapil Sibal said that 97% of the loans would become NPAs in this sector unless some relief was extended. Others sought extension of the moratorium period till March 31, 2021, instead of December 31, 2020.

The hearing was further put off to December 2 for lack of time.

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