The Supreme Court on Friday refused to hear a petition seeking a clarification and modification of its earlier judgement that mandated the declaration of loan accounts as non-performing assets, Live Law reported.
The petitioner, advocate Vishal Tiwari, had sought a modification of the Supreme Court’s March 23 order, in which it lifted the stay on declaring loan accounts as non-performing assets.
In September 2020, the court had said that accounts that were not declared non-performing assets as on August 31 should not be declared so until it finished hearing pleas related to waiving the interest on installments during the period of the loan moratorium plan. The scheme was brought in to provide relief to borrowers amid the coronavirus crisis.
Tiwari’s petition said that after the court’s March 23 order, banks could impose non-performing asset norms on standard accounts in case of a default, according to ANI. However, the law mandated that the standard account of a borrower could be declared a non-performing asset only if no repayment was done for 90 days or more, the petitioner added.
The petitioner sought an order stating that the 90-day period for declaring any account as a non-performing asset would be calculated from March 23, the day of the Supreme Court ruling.
However, a bench comprising Justices DY Chandrachud and MR Shah on Friday refused to entertain the plea, and said this would have to be a policy decision taken by the central government.
Also read: SC stops banks from charging penal interest on any borrower during loan moratorium period
Considering the economic impact of the lockdown imposed to fight the coronavirus crisis in 2020, the Reserve Bank of India had on March 27 said that banks would be allowed to grant a moratorium of three months on payment of all installments due between March 1 and May 31.
On May 23, the Reserve Bank of India said that banks could extend the moratorium until August 31. However, the RBI had said it would not be prudent to go for a forced waiver of interest, risking the financial viability of the banks it was mandated to regulate and putting the interests of the depositors in jeopardy.
In March, the Supreme Court ruled that there should be no penal interest on any borrower during loan moratorium period from March 1 to August 31 last year, irrespective of the loan amount.
However in June, it refused to provide any relief to borrowers amid the second wave of the pandemic. The court had also said that it could not “anticipate financial implications”, adding that this was a decision related to the central government’s policies.
Limited-time offer: Big stories, small price. Keep independent media alive. Become a Scroll member today!
Our journalism is for everyone. But you can get special privileges by buying an annual Scroll Membership. Sign up today!