Case Note & Summary
The petitioner, Gajendra Sharma, filed a writ petition under Article 32 of the Constitution challenging the Reserve Bank of India's notification dated 27.03.2020, which permitted a three-month moratorium on loan installments but stated that interest would continue to accrue during the moratorium period. The petitioner had availed a home loan of Rs.37,48,000 from ICICI Bank and contended that the imposition of interest during the moratorium defeated the purpose of the relief and violated his right to life under Article 21. The petitioner also referred to the Disaster Management Act, 2005, arguing that the government had ample power to grant relief. The Reserve Bank of India subsequently extended the moratorium by another three months via notification dated 23.05.2020. During the hearing, the petitioner's counsel expressed satisfaction with the measures taken by the Government of India, including the decision to waive interest on eight specified categories of loans up to Rs.2 Crores, as approved by the Union Cabinet on 21.10.2020 and implemented via Ministry of Finance directions dated 23.10.2020. The Solicitor General submitted that lending institutions had released ex-gratia amounts exceeding Rs.4,300 Crores in over 13.12 Crore accounts. The Supreme Court, noting that the petitioner's concerns had been addressed, disposed of the writ petition without adjudicating on the merits of the constitutional challenge.
Headnote
A) Constitutional Law - Right to Life - Article 21 - Moratorium Interest - Petitioner challenged RBI notification charging interest during COVID-19 moratorium as violative of Article 21 - Court noted that subsequent government measures including waiver of interest on specified loans up to Rs.2 Crores addressed petitioner's concerns - Held that petition became infructuous and was disposed of (Paras 1-7). B) Disaster Management - Financial Relief - COVID-19 - Sections 6, 10(2)(1) Disaster Management Act, 2005 - Petitioner argued that government had power to grant loan relief under the Act - Court did not adjudicate on merits as relief measures were already implemented (Paras 2.1-2.2).
Issue of Consideration
Whether the notification dated 27.03.2020 issued by the Reserve Bank of India, to the extent it charges interest on the loan amount during the moratorium period, is ultra vires and violates Article 21 of the Constitution.
Final Decision
The Supreme Court disposed of the writ petition as the petitioner expressed satisfaction with the government's relief measures, including waiver of interest on eight categories of loans up to Rs.2 Crores.
Law Points
- Moratorium period
- interest accrual
- right to life
- Article 21
- Disaster Management Act
- 2005
- Reserve Bank of India circulars
- COVID-19 relief measures
