Loan moratorium amid COVID-19 second wave: Supreme Court indicates that it cannot grant extension

The Supreme Court on Monday indicated that it would not be able to grant relief in terms of an interest-free loan moratorium for a period of six months or till the COVID-19 situation improves..A Bench of Justices Ashok Bhushan and MR Shah made an observation to this effect while waiting for the connection of Advocate Vishal Tiwari to be established. Justice Bhushan asked Justice Shah,"Have you seen the prayers brother?"To this, Justice Shah said,"Yes. We cannot grant it. A representation can be allowed to be made to the RBI.".The plea will now be taken up on June 11, since Tiwari "did not unmute" himself during the hearing..The petition drawn by Advocate Vishal Tiwari sought relief for lenders on the ground of unemployment and loss of business opportunities in the wake of the second wave of COVID-19.The petition stated that the Central government and its concerned ministries along with the Reserve Bank of India (RBI) have failed to bring in any sound relief in this present situation for stressed sectors and individuals for whom sustenance and existence have come under a cloud..[COVID-19 Second Wave] Plea in Supreme Court seeks interest-free moratorium on term loans, deferment on loan installment payments for 6 months."No such monetary relief and packages has been declared by the sovereign in this stressed time and people are under tremendous pressure to maintain the EMIs and is always under the threat of accounts being declared NPA. With no salary, revenue for individuals it has turned out to be a hopeless situation for individuals. The RBI on 6-5- 2021 has issued a circular for resolution plan 2.0, which cannot be said adequate relief to all in the present circumstances being arbitrary, unfair and just an eyewash," the petition stated..The plea pointed out how the RBI through its circular dated August 6, 2020, provided for the facility of restructuring during the first wave of COVID-19.The present situation too requires similar and immediate relief for the citizens of this country, it was submitted..It was further stated that a circular dated May 6, 2021 introducing a resolution plan for stressed Micro, Small and Medium Enterprises (MSMEs) during second wave of COVID-19 is not benefitting the real stressed borrowers.."With no salary, revenue for individuals it has turned out to be a hopeless situation for individuals. The RBI on 6-5- 2021 has issued a circular for resolution plan 2.0, which cannot be said adequate relief to all in the present circumstances being arbitrary, unfair and just a eyewash," the plea stated..Tiwari sought directions so that no bank or financial institution acts against any property of any citizen or body corporate for a period of six months for non-repayment of loans.He further sought directions so that no account shall be declared as a non-performing asset for a period of six months..(Read order)