Gajendra Sharma v. Union of India and Anr.
Writ Petition (Civil) No.825 of 2020 decided on 27th November,2020
Bench: ASHOK BHUSHAN, R. SUBASH REDDY, M.R. SHAH JJ.
The present writ petition was filed by the petitioner under Article 32 of the Constitution. The petitioner availed a home loan of Rs.37,48,000/- from ICICI Bank. However, after the outbreak of COVID-19, The Government of India announced a nationwide lockdown. The Reserve Bank of India (RBI) on 27 March, 2020 vide its notification issued certain measured to mitigate the burden of debt servicing brought about by disruptions on account of COVID-19. The petitioner, however, claimed that due to lockdown, all means of livelihood have been curtailed by the Government. Furthermore, the petitioner asserted that RBI’s notification mandated that interest must be charged even during the moratorium period. Aggrieved by this, the petitioner contended that imposition of such interest is ultra vires and hence filed the present writ in the Supreme Court.
The Supreme Court considered the following issue:
1. Whether the notification issued by the RBI is ultra vires and violate “Right to Life” of the petitioner as guaranteed by Article 21 of the Constitution?
Shri Rajiv Dutta, learned senior counsel submitted that:
1. Reserve Bank of India has by the notification made it clear that interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period. Furthermore, the above action of imposition of interest during the moratorium period is completely devastating and causes hindrance and obstruction in right to life guaranteed by Article 21 of the Constitution. 2. The additional interest burden for three months’ moratorium period is also equally divided in all future EMIs, which is to increase the monthly bill of the customer. The notification qua payment of interest violates the principle of natural justice as the Government on one hand ceased the working of the individuals and on other hand asking to pay the loan interest during moratorium.
Shri Tushar Mehta, learned Solicitor General submitted that:
1. the Central Government is fully conscious of the difficulties faced by the various sectors and the stakeholders of various sectors and the Finance Ministry, after the outbreak of COVID-19, has taken several measures of reliefs dealing with the potential problems faced by several sectors and in several spheres of all financial worlds.
2. In pursuance of circular dated 23.10.2020, as a follow-up towards the implementation of the aforesaid decision, the State Bank of India has informed that as on 13.11.2020, as per provisional, unaudited information received so far from various lending institutions, such lending institutions have released ex-gratia amount of an aggregate exceeding Rs. 4,300 Crores in over 13.12 Crore accounts of borrowers covered under the Scheme.
The Supreme Court after analysing the arguments submitted by both the parties and taking in considerations the affidavits filed, observed that the pandemic has not only caused a serious threat to the health of the people but has also cast its shadow on the economic growth of the country as well as other countries in the entire world. The Supreme Court observed that the Central Government was fully conscious of the difficulties faced by the various sectors and the stakeholders of various sectors. The counsel for petitioner expressed its satisfaction with the measures taken by the Government of India redressing grievances of the petitioner. The 3 judge bench issued directions to the respondents to ensure that all steps be taken to implement the decision dated 23.10.2020 of the Government of India, Ministry of Finance so that benefit as contemplated by the Government of India percolates to those for whom the financial benefits have been envisaged and extended. Thus, the Supreme Court disposed the writ petition.