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TMI Blog2021 (3) TMI 1214X X X X Extracts X X X X X X X X Extracts X X X X ..... mely, 31.12.2020 provided under the 6.8.2020 circular. HELD THAT:- In RK. GARG VERSUS UNION OF INDIA AND OTHERS [ 1981 (11) TMI 57 - SUPREME COURT] , it has been observed and held that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. It is further observed that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait-jacket formula and this particularly true in case of legislation dealing with economic matters - This Court in the case of STATE OF MP VERSUS NANDLAL JAISWAL [ 1986 (10) TMI 321 - SUPREME COURT] has observed that the Government is entitled to make pragmatic adjustments which may be called for by particular circumstances. The court cannot strike down a policy decision taken by the State Government merely because it feels that another policy decision would have been fairer or wiser or more scientific or logical. The court can interfere only if the policy decision is patently arbitrary, discriminatory or mala fide. In the case of PEERLESS GENERAL FINANCE INVESTMEN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ures to redress the financial strain faced by the industrial sector, particularly MSMEs due to the Corona Virus Pandemic. It appears that the writ Petitioner is not satisfied with the steps taken by the RBI vide notification dated 27.03.2020. According to the Petitioner, the Covid-19 Regulatory Package notified by the RBI vide notification dated 27.03.2020 insofar as the terms loans, working capital facilities and restructuring of Stressed Account is inadequate, ineffective and does not offer any substantial relief, aid or assistance to the industries particularly MSMEs. According to the Petitioner, the above-mentioned Regulatory Package will not in any manner salvage the MSMEs and help them recover from financial losses that have been caused due to the unforeseen circumstances. With the above broad grievances, it is prayed as under: (a) issue writ/writs including a writ of mandamus or any other writ or direction in the nature thereof, directing the Respondents to permit the lending institutions not to recover interest component from the industries particularly MSMEs on Term Loans and Working Capital Facilities availed by them for three months from 01.03.2020 to 31.05.2020; (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prayed to direct the RBI to extend the period of moratorium by another six months, without any interest being levied on the loans availed by the members of the Petitioner organisation. 1d. Writ Petition (Civil) No. 1024 of 2020 has been preferred Under Article 32 of the Constitution of India by the Petitioner - Confederation of Real Estate Developers Association of India (CREDAI), for and on behalf of the private real estate developers in Chhattisgarh, also challenging notification dated 27.03.2020 issued by the RBI to the extent charging interest on the loan amount during the moratorium period. It is also prayed for an appropriate writ, direction or order directing the Respondents - Union of India to take adequate measures of reliefs to the disaster affected persons in accordance with letter and spirit of Disaster Management Act, 2005, more particularly Sections 12 and 13 of the said Act, more particularly to the reliefs with respect to waiver of loan and/or interest on all kind of loans availed by the borrowers/disaster affected persons through a well informed and formulated policy. 1e. Writ Petition (Civil) No. 1025 of 2020 Under Article 32 of the Constitution of India has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icle 32 of the Constitution of India has been preferred by the CREDAI - HR for and on behalf of the real estate sector for an appropriate writ directing the Respondents - Union of India, RBI and others to provide such financial relief to its members, freezing all financial liabilities of such members towards banks and financial institutions. It is also further prayed to direct the RBI to apply Circular dated 27.03.2020 to all banks, non-banking financial companies, housing finance companies and other financial institutions compulsorily and mandatorily to all loan accounts without any discrimination or classification. 1i. Writ Petition (Civil) No. 506 of 2020 Under Article 32 of the Constitution of India has been preferred by one private limited company challenging notification dated 27.03.2020 issued by the RBI to the extent charging interest on the loan amount during the moratorium period. 1j. Writ Petition (Civil) Diary No. 12389 of 2020 Under Article 32 of the Constitution of India has been preferred by the Shopping Centres Association of India (SCAI) for and on behalf of its members who are engaging in Malls and Shopping Centres challenging notification dated 27.03.2020 issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he RBI to provide a special dispensation to the lenders to allow extension of the Scheduled Commercial Operation Date of projects under construction, due to delays in completion of under-construction projects on account of Covid-19 and the lockdown, by another one year while maintaining the "standard" asset categorisation. It is also further prayed to direct the Respondents to include Non-Convertible Debentures as part of the relief granted by the RBI in its notification dated 27.03.2020, as well as, any other Covid-19 related relief which may be granted. 1n. Writ Petition (Civil) No. 711 of 2020 Under Article 32 of the Constitution of India has been preferred by Coimbatore Jewellery Manufacturers Association for and on behalf of its members to declare that part of notification dated 27.03.2020 issued by the RBI, as extended by notification dated 23.05.2020, as ultra vires to the extent it charges interest on the loan amount during the moratorium period. It is also prayed to direct the Union of India and the RBI to provide relief in repayment of loan by not charging interest during the moratorium period declared by notification dated 27.03.2020, further extended by notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icle 32 of the Constitution of India has been preferred by Chhattisgarh Laghu and Sahayak Udyog Sangh for and on behalf of its members declaring the portion of notification dated 27.03.2020 issued by the RBI, as extended by notification dated 23.05.2020, charging the interest and also interest on interest (penal interest) during the moratorium period as ultra vires. 1t. Writ Petition (Civil) No. 1029 of 2020 Under Article 32 of the Constitution of India has been preferred by an individual challenging notifications dated 27.03.2020 and 23.05.2020 to the extent charging interest on the loan amount during the moratorium period. 1u. Writ Petition (Civil) No. 1157 of 2020 Under Article 32 of the Constitution of India has been preferred by the Chhattisgarh Udyog Mahasangh also challenging notifications dated 27.03.2020 and 23.05.2020 to the extent charging interest/interest on interest (penal interest) on the loan amount during the moratorium period. It is also prayed to direct the Union of India to take adequate and effective measures of reliefs to the disaster affected persons in accordance with letter and spirit of Disaster Management Act, 2005, more particularly in terms of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -wise economic packages/reliefs. Submissions on behalf of the respective Petitioners 3. Shri Ravindra Shrivastava, learned Senior Advocate appearing on behalf of the respective Petitioners in Writ Petition (C) Nos. 964/2020, 1024/2020, 1025/2020, 1132/2020, 1157/2020 and 1178/2020 has made the following submissions: i) that this Court ought not to limit the scope for relief and directions only qua waiver of compound interest which is limited to a highly restricted segment of the class of borrowers. It is submitted that shorn of technicalities of pleadings and specific prayers, this Court must take cognizance in public interest of the severity and the magnitude of the disaster and mould the relief accordingly to extend an effective measure of relief to an utterly distressed class of people affected by the pandemic of Covid-19; ii) that Covid-19 pandemic is a disaster in itself of an unprecedented history. It undoubtedly requires disaster management; iii) that the "disaster management" must be and can only be addressed under the statutory regime of law enacted by the Parliament. The question of executive response will come into play only after the special law on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remost, seemingly omnipotent and omnipresent. It is submitted that the "disaster management" is defined in Section 2(e) of the Act; viii) that the "disaster management" is a continuous and integrated process of planning, organising, coordinating implementing measures which are necessary and expedient for "...Mitigation or reduction of risk of any disaster or its severity or consequences...". That the issues which arises squarely fall within the meaning and amplitude of "disaster management" which is statutorily mandated Under Section 2(e) of the Act; ix) that the word "mitigation" has been defined in Section 2(i) and the word "resources" has been defined in Section 2(p) of the DMA 2005; x) that in the present case the steps for disaster management have not been undertaken by the statutory authorities under the Act, which makes out a plain and simple case of issue of mandamus to put the statutory authorities in action for performing their duties under the law; xi) that while Section 11 mandates duty to draw up a plan for disaster management for the whole country, at least this Court has not been informed of any such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t data and undertaking a study by experts; xv) that Section 13 which casts duty upon the National Authority to recommend relief in the matter of repayment of loans and/or grant of fresh loans on concessional terms does not make any differentiation among the class of 'persons affected by disaster'. The class of persons affected by disaster is one integrated class as the Covid-19 pandemic has affected every single individual person, the difference may be of degree. Section 13 intends to provide relief in the matter of repayment of loans etc. to all the persons affected by the disaster and does not admit of any classification. While this much is the minimum scheme of law, the National Authority has not made any recommendation with regard to relief in the repayment of loans and/or for grant of fresh loans to persons affected by disaster on such concessional terms as may be appropriate. There has been a complete inaction on the part of the National Authority in performing the legal duty. It is submitted that any recommendations of the National Authority Under Section 13 of the DMA 2005 have not been brought to the notice of this Court; xvi) that some of the measures which ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated by the Ministry of Finance and RBI have to have the approval and sanction of the National Authority which alone has the authority to make their recommendations; xviii) that even the government in discharge of executive functions and providing administrative response have to act as "parens patriae" which doctrine is embedded in the preamble of the Constitution. It is submitted that the government in democracy or any other government has to act only and only for the welfare of the people. In support of his submission, reliance is placed on the decision of this Court in the case of Charan Lal Sahu v. Union of India, (1990) 1 SCC 613 (paragraph 35). It is submitted that therefore when the doctrine of parens patriae gets attracted, the lack of resources or financial considerations resulting in denial of relief to the needy persons affected by disaster is no answer and cannot be pressed into service. It is submitted that the government is simply bound to arrange its coffers in such a manner that the relief cannot be denied. Reliance is placed upon the decision of this Court in the case of Union Carbide Corporation Limited v. Union of India, (1991) 4 SCC 584; xix) tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plation extension reliefs and concessions, is misconceived as matters of bounty and/or charity described as ex-gratia. The distressed class of persons affected by the disaster are entitled to reliefs and concessions as a matter of right because that flows from the legal and statutory duty imposed by the statutory law of Parliament - DMA 2005 and the supreme law of the land, i.e., the Constitution of India. It is submitted that it is because of this approach of a gratis underlying the scheme that both the statutory authorities and Union of India have miserably failed to address the issue in right perspective and grant relief and concessions to the persons affected by the disaster in an effective, meaningful and substantial manner; xxiii) that even the Scheme dated 23.10.2020 contains the eligibility criteria as under: 4. Eligibility criteria under the scheme (1) Borrowers in the following segments/classes of loans, who have loan accounts having sanctioned limits and outstanding amount of not exceeding Rs. 2 crore [aggregate of all facilities with lending institutions] as on 29.02.2020, shall be eligible under the Scheme: (i) MSME loans (ii) Education loans (iii) Housing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k contrast with affidavit dated 02.10.2020. It is submitted that the Ministry of Finance has added more and drastic conditions reducing it to an illusion of reliefs and concessions. The arbitrary and irrational criteria is so striking that the scheme is virtually nugatory. In the first place, para 18 of the affidavit dated 02.10.2020 as well as para 4 of the scheme, both make it evident that if the total exposure of the loan at the grant of sanction is more than Rs. 2 crores, the borrower will be ineligible irrespective of the actual outstanding. For example, if the borrower has been sanctioned a loan of Rs. 5 crores and has availed of the same, even though he might have repaid substantially bringing down the principal amount to less than Rs. 2 crores as on 29.02.2020 but because of the sanction of the loan amount of more than Rs. 2 crores, he stands ineligible. It is submitted that more remarkable is the condition that the outstanding amount should not exceed Rs. 2 crores and for which purpose the aggregate of all facilities with the lending institutions will be reckoned. It means that hypothetically a borrower, for example MSME category, has availed and has outstanding of busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons affected by the disaster requiring disaster management; xxviii) that the impugned classification is based on whims and caprice of the executive rather than an objective and real consideration. No material is available on record to show the basis of the classification. The Union of India cannot seek to clothe a decision which is so evidently discriminatory and arbitrary under the protective shield of policy decision inasmuch as any policy can neither be arbitrary nor discriminatory. In support of his submissions, Shri Ravindra Shrivastava has heavily relied upon the decisions of this Court in the cases of Rattan Arya v. State of T.N. (1986) 3 SCC 385; State of W.B. v. Anwar Ali Sarkar 1952 SCR 284 : AIR 1952 SC 75 (paras 83 & 84); and D.S. Nakara v. Union of India, (1983) 1 SCC 305 (paras 13 & 14); xxix) that even within the class of classified eligible borrowers, the arbitrariness is writ large because categories and the borrowers of each categories are inherently dissimilar but are sought to be painted with one brush. They are made to wear the shoes of one size to fit in all. The borrowers in 8 categories compared with each other unequal. For example, a business loan t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te misconception of the Union of India that relief of waiver of compound interest is sufficient to provide redress within the meaning of Sections 12 and 13 of the DMA 2005. It is submitted that the measures of reliefs were required to be laid down sector and group wise classified on the basis of common denominating factors, which have not been done; xxxii) Now so far as the measures proposed by RBI vide circular dated 6.8.2020 is concerned, it is vehemently submitted that the same cannot be said to be a relief of 'disaster management' which otherwise is arbitrary and discriminatory. It is submitted that the RBI Circular dated 6.8.2020 is a sheet anchor of case of both the Union of India and the RBI. This circular seeks to provide for the resolution framework for Covid-19 based on the "Prudential Framework for Resolution of Stressed Assets Directions 2019" dated 7.6.2019. It is submitted that on the face of it the resolution framework only adopts and incorporates the circular dated 2.6.2019, which is prior to onset of pandemic disaster; xxxiii) that the RBI is not the authority though it may have supportive role to play to take a decision in regard to the measu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intelligible differentia having nexus with the object. It is submitted that the resolution framework is applicable only to those borrowers who are having distress on account of Covid-19 but in what manner such factor would be determined is not provided for, leaving therefore, the benefit of the resolution framework to subjective satisfactory and arbitrariness of the banks, it has been left to the unguided, ultimate and final discretion of the banks to lay down their individual policies and framework creating gross inequality and introducing total subjectivity; xxxvii) It is further submitted by Shri Ravindra Shrivastava, learned Senior Advocate appearing on behalf of some of the Petitioners that the trigger for filing these petitions and the Court taking the cognizance thereof are conditions of exceeding distress, financial and otherwise which seriously impinge upon the fundamental rights of Article 14, 19 and 21 of the Constitution in their full ramifications. It is submitted that the occasion for this Court is an extraordinary human tragedy of unparallel origin and precedence and therefore requiring extraordinary statutory legal and constitutional response by the statutory auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng/considering the impact of lockdown due to pandemic, vis-à-vis power sector and not providing special package for the power sector, unequals are treated equally. It is submitted that therefore the NDMA/UOI/RBI must devise suitable and appropriate sector specific measures essentially for the continued operation of the power generation sector. 4.1. It is submitted that the RBI Circular relating to Covid-19 relief packages viz. impugned RBI notifications, RBI Circulars dated 6.8.2020, 7.9.2020 have left the option of providing relief to the discretion of lenders instead of making it mandatory. It is submitted that as per the aforesaid notifications, the lenders are permitted to grant a moratorium of three months on payment of all instalments for repayment of term loans and working capital facilities falling due during the moratorium period. It is submitted that as per paragraphs 14 and 15 of Part B of circular dated 6.8.2020, the decision to provide relief has been left to the discretion of the lenders; as per paragraph 18 of circular dated 06.08.2020, the resolution process has to be invoked by not less than 75% of lenders by value and not less than 60% of lenders by number ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the aim and object of policies framed by the RBI/UOI, which was primarily to mitigate and alleviate the debt burden of the borrowers. It is submitted that the Kamath Committee Report, (i) proceeds on the basis that businesses which were shut down due to Government action [i.e. National Lockdown] and defaulters. (ii) The Terms of Reference of Kamath Committee are only aligned for interest of the lending institutions and not for continuous viability of businesses as seen from the chart annexed. (iii) The stringent conditions so imposed are difficult to comply and will turn all businesses into NPA. (iv) Restructuring plan is required to be approved by December 2020 although the Real Estate sector has barely commenced functioning due to COVID - 19 restrictions i.e. the "force majeure' even continues and no proposal is possible. (v) The ratios of borrowing limits/net asset value which were never there in the original loan agreements are imposed under the Restructuring Policy. (vi) Moratorium Policy expired on 31.08.2020 and due to the inability of the businesses in the real estate sector to make payments during the months of September, October and November 2020, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ], whichever is earlier. 8.3 Restructuring Policy dated 07.08.2020 and 07.09.2020 to be simplified, broad based and implemented across board without any classification so that the true object of bailing out the borrowers under stress [precipitated by the national disaster/pandemic/force majeure event] and supporting the revival of the Indian economy/its GDP through its focal sector i.e. real estate can be seamlessly achieved. 8.4 All accounts which have not been declared as NPA as on 01.03.2020 are to be made eligible for restructuring without any further provisioning of 10% by banks. 6. The other learned Advocates appearing for the other respective Petitioners, such as, Textile Association, Healthcare Sector, Hotelier Association, Shopping Centres and Malls, Travellers and other industries have by and large made the submissions which are narrated hereinabove and therefore they are not repeated again here. Reply on behalf of the Union of India 7. All these petitions are opposed by Shri Tushar Mehta, learned Solicitor General of India, appearing for the Union of India, Shri Harish Salve, learned Senior Advocate appearing on behalf of the Indian Bank Association, Shri V. Giri, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the pandemic whose duration remains uncertain; (iv) The difference in implications of the reliefs granted for various sectors; and (iv) The fact that the resources of any country would not be unlimited. It is further submitted that the Central Government has also taken a number of measures to mitigate financial suffering, which include, inter alia, the following: (i) Agriculture loans: 3% subvention on interest rate payable on prompt repayment has been made admissible despite availing moratorium. (ii) Housing loans: Subvention on interest rate under Pradhan Mantri Awas Yojna has been extended by one more year up to 31.03.2021. (iii) Small business borrowers: 2% subvention on interest rate has been introduced for small business loans under Pradhan Mantri Mudra Yojana. (iv) Micro Food Processing Units: Credit-linked subsidy of Rs. 10,000 crore has been introduced for 2 lakh food-processing micro-enterprises. (v) Micro, Small and Medium Enterprises (MSMEs): Emergency credit line of up to Rs. 3 lakh crore, backed by 100% guarantee from the Government, at capped rate of interest has been launched. (vi) Stressed MSMs: Financing for stressed MSMEs has been enabled throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re required to be kept in view while taking financial and economic decisions that are very sensitive for financial stability of the country. These may include scheduled commercial banks (which include, inter alia, Regional Rural Banks, small finance banks, local area banks, nationalized banks, etc.), Urban Co-operative Banks (UCBs), State Co-operative Banks (StCBs) and District Central Co-operative Banks (DCCBs) that cater to rural credit in the country, Non-Banking Financial Companies (NBFCs), Housing Finance Companies (HFCs), all India financial institutions, etc. (iii) That the structuring of the loan in each category of bank/lending institution and each category of borrower would be different not only in terms of the rate of interest and in terms of duration of the lending facility but also in several other distinct aspects. (iv) In any banking sector when financial assistance is rendered by way of loans, a balance has to be maintained with the interest of crores of depositors, most of whom are merely depositors and surviving on the interest they receive on their deposits. On an approximate basis, there are over 197 crore deposit accounts in the country in commercial banks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsonal, MSME and corporate loans. It is submitted that this would enable lenders to implement individual resolution plans in respect of the loans having stress on account of Covid-19 pandemic. It is submitted that the said approach would also enable continuance of classification of such loans as standard, i.e., without treating them as NPA. 7.8. It is submitted that the RBI Circulars dated 6.8.2020 take care of all categories of lending institutions and all categories of borrowings as aforesaid, while leaving the nature and the kind of the relief to be given to the lending institution since each category of lending institution would have its own bank/institution - specific financial scenario in terms of the nature of advance, the nature of borrowers, rate of interest etc. That Circular dated 6.8.2020 takes care of the MSME Sector, personal loans and corporate loans, keeping in mind the overall financial stability of the economy, economic stability of banking sector and interest of the depositors in mind. It is submitted that considering the fact that the time limit for continuance of the present economic issues is uncertain, as a policy it is undesirable to either give any " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r through RBI, which already had their financial impact, which was/is required to be kept into consideration while taking further decisions either while granting moratorium which, in fact, is deferment [and not waiver] as well as while taking the present decision regarding relief in compounding of interest. The following steps taken by the Central Government have their own financial impacts which would require the Central Government to rationalise any kind of waiver at this stage as going any further than what is stipulated hereunder may be detrimental to the overall economic scenario, and the economy and the nation or the banking sector may not be able to take the financial constraints resulting therefrom. 7.12. It is submitted that as such the Central Government has already given various reliefs and by providing various reliefs there already exists substantial financial burden. It is submitted that having realised that the pandemic has caused stress to large and small businesses and to individual borrowers who have lost jobs and livelihoods and they need relief which will help them get back on their feet, it has necessitated multi-pronged relief. It is submitted that the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vernment were to consider waiver of interest on all the loans and advances to all classes and categories of borrowers corresponding to the six-month period for which the moratorium was made available under the relevant RBI circulars, the estimated amount is more than Rs. 6 lakh crores. It is submitted that if the banks were to bear this burden, it would necessarily wipe out a substantial and a major part of their net worth, rendering most of the banks unviable and raising a very serious question mark over their very survival. It is submitted that this was one of the main reasons why waiver of interest was not even contemplated and only payment of instalments was deferred. 7.15. It is submitted that even otherwise the lending activity of any bank is always enabled by the deposits that depositors/customers hold in the lending banks. Such depositors are much more in number than the number of borrowers. It is submitted that it is estimated that in the Indian Banking system for every 'loan account' there are about 8.5 'deposit accounts'. The banks can pay interest to depositors only because borrowers pay interest to the bank. This transaction of depositors/banks/borrowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... professionals up to Rs. 2 crore (viii) Consumption loans up to Rs. 2 crore It is submitted that the aforesaid decision has been taken, after examining the possible fiscal scenario in case of a complete/partial waiver and after gathering the material details for reaching the decision-making process, and while keeping in mind the interest of particular class of borrowers during the unprecedented period the country is facing. 7.18. It is further submitted that the resolution framework announced by the RBI provides that loan accounts which slip into NPA between invocation and implementation may be upgraded as standard on the date of implementation itself. It is further submitted that so far as the apprehension that credit rating agencies may record a downgrade to NPA for defaults during the moratorium, it is submitted that Securities and Exchange Board of India (SEBI) has already issued a Circular on 30.03.2020 providing for relaxation from recognition of default due to the moratorium. On 31.08.2020, it has further specified that in cases of restructuring, the same may not be considered a default by rating agencies. 7.19. It is further submitted that to give further relief, Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest rate is being given for small business loans. 7.21. It is further submitted that with regard to reliefs sought by various Petitioners/applicants in terms of extension of moratorium, applicability of the resolution framework, fixation of interest rate, transmission of rate cuts, delinking of interest rate from credit rating of the borrower and moratorium on repayment of non-credit instruments that the setting of interest rates and other norms for restructuring which includes moratorium involves evaluating projections of cash flows and viability. This, in turn, requires expertise, technical knowledge of financing, and experience in dealing with the subject. Therefore, eligibility of proposals, benchmarks for viability, assessment of reasonableness of assumptions and finally acceptance and monitoring of resolution plans are matters best dealt with between the borrowers and the lending institutions concerned. 7.22. It is submitted that the Central Government and all stake holders have discharged their responsibility in the best possible manner under the circumstances which, by themselves, are unprecedented circumstances. It is submitted that all the decisions taken by the Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Plan. 7.23.1. It is submitted that in light of the aforesaid, the responses and the reliefs measures taken by the nodal Ministries are required to be considered. It is submitted that it was not possible to lay down any straight-jacket methodology of dealing with such disaster and each country in the world is responding to the challenges in the best possible manner with rationalised utilization of resources. 7.23.2. It is submitted that in the context of the unprecedented position, the scheme of DMA 2005 is required to be examined. After referring to the Statement of Objects and Reasons of the DMA 2005, it is submitted by Shri Mehta, learned Solicitor General that the Statement of Objects and Reasons as well as the scheme of the Act, the Act envisages a statutory mechanism to deal with the disaster. It is submitted that so far as the National Disaster Management Authority (NDMA) is concerned, it is established Under Section 3 of the Act with the Hon'ble Prime Minister of India as its Chairperson with other members to be nominated by the Hon'ble Prime Minister and discharges the powers and functions enumerated Under Section 6 of the Act. It is submitted that the NDMA is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bstantial part of disaster management namely taking care of public health and hospital infrastructure, Ministry of Agriculture & Farmer Welfare provided for various reliefs in the agriculture sector, Ministry of Housing and Urban Affairs issued separate relief measures for real estate sector etc. Similarly, Ministry of Finance, whose role otherwise was to finance the measures undertaken by other Ministries also undertook several reliefs in terms of financial package and either directly or through RBI relief ensures for stressed accounts. 7.23.6. It is submitted that considering the very nature of the pandemic which was not confined to any specific geographic location but at PAN-India impact having adversely affecting the various fields of human life, the disaster management authority consisted "Empowered Groups" Under Section 10(2)(h) and (i) for comprehensive action and integrated response. The same was published by the Chairperson of National Executive Committee constituted Under Section 8 of the Act. One of the empowered groups was "economic and welfare measure". It is submitted that the said empowered group functions as a limb of NDMA as the same is consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural ministry will give boost to the agricultural sector by various relief measures, Health Ministry will take charge of treatment and public health issues, Home Ministry will implement measures for prevention of spread and other ministries will have to do same in their respective spheres. 7.24.3. Use of the word "may" and "shall" would mean the entire economy of the country shall have to be divested and used in and through banking sector leaving all other areas untouched and even at the cost of national economy and the stability of the banking sector. It is submitted that this could never have been the intention of the legislature. In support of above, Shri Mehta, learned Solicitor General has relied upon the decisions of this Court in the cases of Pradip Kumar Maity v. Chinmoy Kumar Bhunia: (2013) 11 SCC 122 (para 6); Chinnamarkathian v. Ayyavoo (1982) 1 SCC 159 (paras 24 to 26); Official Liquidator v. Dharti Dhan (P) Ltd. (1977) 2 SCC 166 (paras 7 to 10); Bachahan Devi v. Nagar Nigam, Gorakhpur (2008) 12 SCC 372 (para 18); Delhi Administration v. Umrao Singh (2012) 1 SCC 194 (para 13); and Union of India v. Kumho Petrochemicals Co. Ltd. (2017) 8 SCC 307 (pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken after considering every pros and cons and considering various factors and the priorities in the larger public interest and the economy of the country. It is submitted that as observed and held by this Court in the case of Arun Kumar Agrawal v. Union of India (2013) 7 SCC 1 that the matters relating to economic issues, have always an element of trial and error and so long as a trial and error is bona fide and with best intentions, such decisions cannot be questioned as arbitrary, capricious or illegal. It is submitted that in the aforesaid decision in paragraph 43, this Court has considered the decision of the Supreme Court of the United States in the case of Metropolis Theatre Co. v. Chicago, which took the view that the problems of Government are practical ones and may justify, if they do not require, rough accommodation, illogical, if may be, and unscientific. Mere errors of Government are not subject to our judicial review. It is only its palpably arbitrary exercises which can be declared void. Shri Mehta has heavily relied upon paragraphs 41 to 49 of the aforesaid decision, in which this Court considered various earlier decisions. 7.25.1. Relying upon the decision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agrawal (supra); State of M.P. v. Nandlal Jaiswal, (1986) 4 SCC 566; BALCO Employees' Union (Regd.) v. Union of India, (2002) 2 SCC 333; Peerless General Finance and Investment Co. Ltd. (supra); Dalmia Cement (Bharat) Ltd. v. Union of India (1996) 10 SCC 104; Villianur Iyarkkai Padukappu Maiyam v. Union of India (2009) 7 SCC 561; Narmada Bachao Andolan v. Union of India, (2000) 10 SCC 664; and R.K. Garg v. Union of India (1981) 4 SCC 675. Reply on behalf of the Reserve Bank of India 8. Shri V. Giri, learned Senior Advocate appearing on behalf of the Reserve Bank of India has made the following submissions: i) that the RBI has been constituted by the provisions of Section 3 of the Reserve Bank of India Act, 1934 (for short, 'RBI Act'). It has been vested with the responsibility of superintendence and control of the banking business in the country under the provisions of the Banking Regulation Act, 1949 (for short, 'BR Act'). That in view of the various provisions of the BR Act and the RBI Act, the RBI is obliged to see that the banking business is carried on by banks, prudently and adhering to sound principles of banking. That the BR Act has conferred upon th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2020 titled 'Covid-19 Regulatory Package' whereby the moratorium period came to be extended by another three months, i.e., from 1.6.2020 to 31.8.2020 on payment of all instalments in respect of term loans; iv) that the aforesaid policies/circulars were issued with the objective of mitigating the burden of debt servicing brought about by disruptions on account of Covid-19 pandemic and to ensure the continuity of viable business. It is submitted that therefore, the regulatory package is, in its essence, in the nature of a moratorium/deferment and cannot be construed to be a waiver. It is submitted that, however, in order to ameliorate the difficulties faced by borrowers in repaying the accumulated interest for the moratorium/deferment period, it was further provided in the circular dated 23.5.2020 that in respect of working capital facilities, lending institutions may, at their discretion, convert the accumulated interest for the deferment period up to 31.08.2020, into a funded interest term loan which shall be repayable not later than 31.03.2021. Further, in respect of term loans, it has been provided that the repayment Schedule for such loans, including interest as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate was reduced by 25 basis points to 3.75 per cent. May 22, 2020 • The policy repo rate was reduced by 40 bps to 4.0 per cent and reverse repo was reduced to 3.35 per cent. II. Liquidity Operations February 6, 2020 • Announcement of long-term repo operations (LTROs) to provide durable liquidity at policy repo rate for 1-3 years to augment credit flows to productive sectors. The first such LTRO was conducted on February 17, 2020. March 12, 2020 • It was decided to undertake 6-month US Dollar sell-buy swap auctions to provide US Dollar liquidity to the foreign exchange market[2]. The first such auction was conducted on March 16, 2020. March 27, 2020 • Introduced targeted long-term repo operations (TLTROs) under which liquidity availed by banks was to be deployed in investment grade corporate bonds, commercial paper, and non-convertible debentures over and above the outstanding level of their investments in these bonds. The first such TLTRO auction was conducted on March 27, 2020. April 17, 2020 • CRR reduced[3] by 100 bps to 3.0 per cent of NDTL effective March 28, 2020 for a period of one year ending on March 26, 2021. April 27, 2020 • I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... May 31, 2020. • Recognising the challenges to resolution of stressed assets in the current volatile environment, the period for resolution plan under the 'Prudential Framework' was extended by 90 days. May 23, 2020 • Taking forward the COVID-19 regulatory package released in March and April 2020, the moratorium/deferment was extended by another three months till August 31, 2020. August 6, 2020 • Additional measures were announced to improve access to working capital by permitting lending institutions to recalculate the 'drawing power' by reducing the margins till August 31, 2020; and to review the sanctioned limits up to March 31, 2021. • The period for resolution plan under the 'Prudential Framework' was extended by another 90 days, i.e. a total of 180 days. • A window was provided under the Prudential Framework for Resolution of Stressed Assets dated June 7, 2019 to enable the lenders to implement a resolution plan in respect of eligible corporate exposure without change in ownership, and personal loans, while classifying such exposures as Standard, subject to specified conditions. Only those accounts which were classified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir capacity to support the economy and absorb losses in an environment of heightened uncertainty, it was decided that, banks shall not make any further dividend payouts from profits pertaining to the financial year ended March 31, 2020 until further instructions. This restriction shall be reviewed on the basis of the financial position of banks for the quarter ending September 30, 2020. • In order to ease the liquidity position at the level of individual institutions, the LCR requirement for SCBs was brought down from 100 per cent to 80 per cent with immediate effect. The requirement shall be gradually restored back in two phases-90 per cent by October 1, 2020 and 100 per cent by April, 2021. May 22, 2020 • Special refinance facilities for a total amount of Rs. 50,000/- crore were provided to NABARD, SIDBI and NHB to enable them to meet sectoral credit needs[4]. May 23, 2020 • A line of credit of Rs. 15,000/- crore was extended to EXIM bank for a period of 90 days from the date of availment with rollover up to a maximum period of one year to enable it to avail a US dollar swap facility to meet its foreign exchange requirements. June 21, 2020 • Wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cremental qualifying exposures. • It has been decided to rationalize the risk weights for all new housing loans sanctioned up to March 31, 2022. Such loans shall attract a risk weight of 35 per cent where LTV is less than or equal to 80 per cent, and a risk weight of 50 per cent where LTV is more than 80 per cent but less than or equal to 90 per cent. This measure is expected to give a fillip to bank lending to the real estate sector. V. Crop Loans March 31, 2020 • Circular on short-term crop loans eligible for interest subvention scheme (ISS) and prompt repayment incentive (PRI) extending the timeline till June 20, 2020, for converting all short-term crop loans into KCC loans. June 4, 2020 • Circular on ISS and PRI for short-term crop loans during the years 2018-19 and 2019-20 extending moratorium period till August 31, 2020. VI. External Trade April 1, 2020 • The period of realization and repatriation to India of the amount representing the full export value of goods or software or services exported was increased from nine months to fifteen months from the date of export, for the exports made up to or on July 31, 2020. May 22, 2020 • ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts. It may result in vitiating the overall credit discipline which will have a debilitating impact on the process of credit creation in the economy. It will be the small borrowers which may end up bearing the brunt of the impact as their access to formal lending channels is critically dependent on the credit culture. It is submitted that mere continuation of temporary moratorium would not even be in the interest of borrowers. It may not be sufficient in addressing deeper cash flow problems of the borrowers and in fact exacerbate the repayment pressures for the borrowers. Therefore, a more durable solution was needed to rebalance the debt burden of viable borrowers, both businesses as well as individuals, relative to their cash flow generation abilities. It is submitted that with this consideration in mind the Reserve Bank has announced the Resolution Framework for Covid 19-related Stress ("Resolution Framework") on August 6, 2020, which enabled the lenders to implement a resolution plan in respect of personal loans as well as other exposures affected due to Covid 19, subject to the prescribed conditions, without asset classification downgrade. The framework, inter alia, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditions prescribed in the Resolution, without interfering with the commercial judgment exercised by the lenders. It is submitted that the Committee has undertaken an exhaustive task and has given its report dated 4.9.2020. The recommendations of the Kamath Committee have been broadly accepted by RBI vide circular dated 7.9.2020. It is submitted that the Kamath Committee found variable impact of the pandemic across several sectors, with varying degrees of severity and varying nature of problems. It is submitted that the Committee found that it is neither possible nor desirable to arrive at any one particular formula, whether sector-specific or otherwise, to deal with the stress situation arising from the unprecedented pandemic. It is submitted that the resolution of such stressed accounts shall have to be made only by and between the borrowers and the lending institutions. It is submitted that the Kamath Committee while identifying 26 sectors, laid down parameters that are to be guidance for the lending institutions while undertaking the process of restructuring/resolution. 8.5.1. It is submitted that Kamath Committee based resolution plans are applicable only to big borrowers ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of interest on working capital facilities; facility for resolution of Covid-19 related stressed assets are all measures taken with the objective of enabling sustainable recovery and facilitating credit flow to the economy, while ensuring financial stability. 9.2. It is further submitted that as the circulars issued by the RBI are under Covid-19 package and the resolution framework issued by the RBI on 6.8.2020 are the policy decisions, the judicial interference by this Court is not warranted. It is submitted that every regulatory forbearance has its trade-offs in terms of adverse incentives and unintended consequences. It is submitted that the RBI has exercised its expert wisdom in issuing binding guidelines to lending institutions on how to differentiate the risks arising from borrowers with pre-existing financial difficulties from those which were performing well but had been impacted by the pandemic. RBI has taken a balanced view, taking into account the interest of the depositors, borrowers, real sector entities and banks. Financial stability and economic growth of the country were also kept in mind while arriving at its policy decisions by the RBI. 9.3. It is submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrow grounds. It is submitted that the government packages cannot be set aside on the ground of violation of Article 14 of the Constitution of India. It is true that it is the duty of the government to bring back the economy on track. It is submitted that however therefore when a conscious decision has been taken by the NDMA/UOI through various ministries, RBI and the lenders, there may be various options/reliefs which may be available, however ultimately, it is for the policy maker to take appropriate decisions/frame appropriate policies after having the expert opinion. It is submitted that once a conscious decision of various reliefs has been taken, unless it is arbitrary and merely because some sectors are not agreeable, it cannot be set aside. It is submitted that while announcing various packages/reliefs, each and every aspect has been considered from all angle. 10.1. It is submitted that the resolution regarding restructuring of debts is to be considered by the lenders and not by the borrowers. He has also relied upon catena of decisions of this Court on judicial review of the policy decisions, relied upon by Shri Tushar Mehta, learned Solicitor General, referred to hereina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been implemented by the banks and have duly granted relief to all the eligible borrowers in terms of the said schemes/packages. 10.5. Now so far as the reliance placed upon Section 13 of the DMA 2005 is concerned, it is vehemently submitted by Shri Salve, learned Senior Advocate that in Section 13 the word used is "may". It is submitted that the Government has to balance each sector and Section 13 of the Act uses the words "persons affected". It is submitted that different persons/sectors have impact differently and therefore keeping in mind the different impact on different persons/sectors, the Central Government through its various ministries, RBI and the banks have provided different packages/reliefs. 10.6. It is submitted that, as such, as pointed out by Shri Mehta, learned Solicitor General, a conscious decision has been taken by the NDMA. It is submitted that under the DMA, prevention and mitigation shall be within the statutory framework. It is submitted that the architecture of the DMA 2005 is clearly a structure of enabling powers to be exercised concurrently with the executive powers of the Government and other statutory powers available to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... take care of the interest of the different sectors for restructuring of loans and the same are in the larger interest of the economy of the country. It is therefore prayed to dismiss all these petitions. 11. Shri Mukul Rohatgi, learned Senior Advocate appearing on behalf of the State Bank of India has pointed out the resolution/policy dated 1.9.2020 approved by the Board of Directors of the State Bank of India has been framed after considering the recommendations of the Kamath Committee. He has also reiterated on judicial review of the economic policy decisions; adverse effect on the banking system if the prayer of waiver of interest/penal interest is accepted and on interpretation of various provisions of DMA 2005. 12. Having heard learned Counsel appearing on behalf of the respective Petitioners and the reliefs sought in the respective petitions, the reliefs/submissions on behalf of the Petitioners can be summarized as under: i) a complete waiver of interest or interest on interest during the moratorium period; ii) there shall be sector-wise relief packages to be offered by the Union of India and/or the RBI and/or the Lenders; iii) moratorium to be permitted for all acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Supreme Court of the United States in the case of Metropolis Theatre Co. v. Chicago, 228 US 61 (1913): ...The problems of Government are practical ones and may justify, if they do not require, rough accommodation, illogical, if may be, and unscientific. But even such criticism should not be hastily expressed. What is the best is not always discernible; the wisdom of any choice may be disputed or condemned. Mere errors of Government are not subject to our judicial review. It is only its palpably arbitrary exercises which can be declared void... 14.3. This Court in the case of Nandlal Jaiswal (supra) has observed that the Government, as laid down in Permian Basin Area Rate Cases, 20 L Ed (2d) 312, is entitled to make pragmatic adjustments which may be called for by particular circumstances. The court cannot strike down a policy decision taken by the State Government merely because it feels that another policy decision would have been fairer or wiser or more scientific or logical. The court can interfere only if the policy decision is patently arbitrary, discriminatory or mala fide. 14.4. In the case of BALCO Employees' Union (Regd.) (supra), this Court has observed that Wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttled that the courts, in the exercise of their jurisdiction, will not transgress into the field of policy decision. Whether to have an infrastructural project or not and what is the type of project to be undertaken and how it has to be executed, are part of policy-making process and the courts are ill-equipped to adjudicate on a policy decision so undertaken. The court, no doubt, has a duty to see that in the undertaking of a decision, no law is violated and people's fundamental rights are not transgressed upon except to the extent permissible under the Constitution. 233. At the same time, in exercise of its enormous power the court should not be called upon to or undertake governmental duties or functions. The courts cannot run the Government nor can the administration indulge in abuse or non-use of power and get away with it. The essence of judicial review is a constitutional fundamental. The role of the higher judiciary under the Constitution casts on it a great obligation as the sentinel to defend the values of the Constitution and the rights of Indians. The courts must, therefore, act within their judicial permissible limitations to uphold the Rule of law and harness th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons which prompted the government in decision taking one course of action instead of another is not a matter of concern in judicial review and the court is not the appropriate forum for such investigation. The policy decision must be left to the government as it alone can adopt which policy should be adopted after considering of the points from different angles. In assessing the propriety of the decision of the Government the court cannot interfere even if a second view is possible from that of the government. 18. Legality of the policy, and not the wisdom or soundness of the policy, is the subject of judicial review. The scope of judicial review of the governmental policy is now well defined. The courts do not and cannot act as an appellate authority examining the correctness, stability and appropriateness of a policy, nor are the courts advisers to the executives on matters of policy which the executives are entitled to formulate. 19. Government has to decide its own priorities and relief to the different sectors. It cannot be disputed that pandemic affected the entire country and barring few of the sectors. However, at the same time, the Government is required to take vari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot every fundamental right under Part III of the Constitution is absolute and it is to be within permissible reasonable restriction. This principal equally applies when there is any constraint on the health budget on account of financial stringencies. It is the cardinal principle that it is not within the legitimate domain of the court to determine whether a particular policy decision can be served better by adopting any policy different from what has been laid down and to strike down as unreasonable merely on the ground that the policy enunciated does not meet with the approval of the court in regard to its efficaciousness for implementation of the object and purpose of such policy decision. 22. With the limited scope of judicial review on the policy decisions affecting the economy and/or it might have financial implications on the economy of the country, the reliefs and submissions stated hereinabove are required to be considered. Whether there shall be a waiver of interest during the moratorium period or whether there shall be sector-wise relief packages and/or RBI should have issued directions which are sector specific and addressing such sector specific issues and/or whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been substantially accepted by the RBI in its circular dated 7.9.2020 which provides for separate threshold for 26 sectors including power, real estate and construction. Even otherwise, it is required to be noted that every sector might have suffered differently and therefore it will not be possible to provide sector specific/sector-wise reliefs. The Petitioners cannot pray for sector specific relief by either waiver of interest or restructuring by way of present proceedings Under Article 32 of the Constitution of India and the question of such financial stress management measures requires examination and consideration of several financial parameters and its impact. 25. Now so far as the submission on behalf of the Petitioners that as per the notifications/circulars/reliefs offered by the RBI and/or Finance Department of the Union of India ultimately it is left to the bankers and it should not have been left to the bankers and the Government/RBI must intervene and provide further reliefs is concerned, at the outset, it is required to be noted that as such the bankers are commercial entities and since the customer profile, organizational structure and spread of each lending i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 20 lakh crores, involving support to MSMEs, Non-Banking Finance Companies, agriculture, sectors allied to agriculture, contractors, street vendors, State Governments, relief in provident fund contribution, extension of subsidy on home loans etc. Therefore, it cannot be said that the Central Government and/or the RBI have not done anything and/or have not offered any reliefs whatsoever. While offering the financial relief packages, the financial constraint and/or financial burden on the government is also required to be considered and borne in mind, which can be considered by the experts and the government and the courts have not expertise to assess the financial burden. From the various steps/measures/policy decisions/packages declared by the Union of India/RBI and the bankers, it cannot be said that the UOI and/or the RBI have not at all addressed the issues related to the impact of Covid-19 on the borrowers. As such, none of the Petitioners have specifically challenged the various circulars/policy decisions taken by the UOI/RBI. From the submissions made by the learned Counsel appearing for the respective parties, it appears that the borrowers want something more than the reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A 2005 is concerned, to appreciate the above, the relevant provisions of DMA 2005 are required to be referred to and considered. Section 3 of the Act provides for establishment of National Disaster Management Authority which shall consist of the Prime Minister of India, who shall be the Chairperson of the National Disaster Management Authority and other members not exceeding nine, to be nominated by the Chairperson of the National Authority. Powers and functions of the National Authority are provided Under Section 6, which reads as under: 6. Powers and functions of National Authority.--(1) Subject to the provisions of this Act, the National Authority shall have the responsibility for laying down the policies, plans and guidelines for disaster management for ensuring timely and effective response to disaster. (2) Without prejudice to generality of the provisions contained in Sub-section (1), the National Authority may-- (a) lay down policies on disaster management; (b) approve the National Plan; (c) approve plans prepared by the Ministries or Departments of the Government of India in accordance with the National Plan; (d) lay down guidelines to be followed by the State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) to act as the coordinating and monitoring body for disaster management.... (b) coordinate and monitor the implementation of the National policy; (c) monitor the implementation of the National Plan and the plans prepared by the Ministries or Departments of the Government of India; (d) monitor the implementation of the guidelines laid down by the National Authority for integrating of measures for prevention of disasters and mitigation by the Ministries or Departments in their development plans and projects; (e) monitor, coordinate and give directions regarding the mitigation and preparedness measures to be taken by different Ministries or Departments and agencies of the Government; (f) lay down guidelines for, or give directions to, the concerned Ministries or Departments of the Government of India, the State Governments and the State Authorities regarding measures to be taken by them in response to any threatening disaster situation or disaster; (g) advise, assist and coordinate the activities of the Ministries or Departments....engaged in disaster management. Section 11 of the Act provides for preparation/drawing up a Plan called the "National Plan" for disaster manage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ministries or Departments of the Government of India take necessary measures for preparedness to promptly and effectively respond to any threatening disaster situation or disaster; (e) cooperation and assistance to State Governments, as requested by them or otherwise deemed appropriate by it; (f) deployment of naval, military and air forces, other armed forces of the Union or any other civilian personnel as may be required for the purposes of this Act; (g) coordination with the United Nations agencies, international organizations and governments of foreign countries for the purposes of this Act; (h) establish institutions for research, training, and developmental programmes in the field of disaster management; (i) such other matters as it deems necessary or expedient for the purpose of securing effective implementation of the provisions of this Act. (3) The Central Government may extend such support to other countries affected by major disaster as it may deem appropriate. Section 36 of the Act provides for responsibilities of the Ministries or Departments of the Government of India, which reads as under: 36. Responsibilities of Ministries or Departments of Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the DMA 2005 is a complete code in itself and different functions and responsibilities by different authorities to be performed at different levels are provided. As per Sections 35 and 36 of the Act, it shall be the responsibility of the Ministry or the Department of the Government of India to take measures necessary for prevention of disaster, mitigation, preparedness and capacity-building which shall include to allocate funds for measures for preparation of disaster, mitigation, capacity-building and preparedness. Therefore, on conjoint reading of the relevant provisions of the DMA 2005, which are referred to hereinabove, it cannot be said that the functions of all the Ministries are to be discharged by the NDMA which should take decision qua the area in each Ministry. It also cannot be said that the functions of the Ministries will stand transferred to the NDMA and will have to be discharged by the NDMA either directly or indirectly for the purpose of disaster management. Various Ministries under the Central Government have to take various relief measures within their respective spheres for remedying the effects of the disaster. From the pleadings, it is borne out that in fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad as it is. On a fair reading of Section 13, it appears that the legislature has deliberately used the word "may". This "may" is used after considering the object and purpose of the Act as a whole as well as the role to be placed by the Central Government through different ministries, role to be placed by the State Government, role to be played by the District Authority at the district level. In the present case, the Ministry of Finance and the RBI have already come out with different packages/reliefs in repayment of loans or grant of fresh loans to the persons affected by disaster. 30.1. Even the Central Government through Ministry of Finance and the RBI has taken various steps for granting reliefs to the disaster affected borrowers. The Central Government has announced the 'Garib Kalyan Package' for Rs. 2.00 lakh crores, involving free food grains, pulses, gas cylinders and cash payment to women, poor senior citizens and farmers; 'Aatma Nirbhar Package' for various sectors like power sector, real estate sector, MSME sector. The Central Government also promulgated Emergency Credit-Linked Guarantee Scheme of Rs. 3 lakh crores providing addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. It is to be noted that even as per Section 13 of the Act, the National Authority "may" and "recommend" relief in repayment of loans or grant of fresh loans to the persons affected by disaster on such concessional terms as may be appropriate. Thereafter, as per the "views and recommendations" of the NDMA, RBI has come out with Resolution framework and on the basis of the same the lenders/bankers after getting the approval of their Board of Directors have come out with the policies. Thus, from the above, it cannot be said that NDMA has failed to perform its duty cast Under Section 13 of the Act. From the above, it also cannot be said that there is no National Plan in existence at all. 31. Now so far as the charging of penal interest/interest on interest/compound interest during the moratorium period is concerned, it stands absolutely on a different footing. At this stage, it is required to be noted that in fact the Central Government has come out with a policy decision subsequently by which it is decided not to charge the interest on interest on the loans up to Rs. 2 crores. However, such relief is restricted to the following categories: (i) MSME l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 27.03.2020, the Government has provided the deferment of the installments due and payable during the moratorium period. Once the payment of installment is deferred as per circular dated 27.03.2020, non-payment of the installment during the moratorium period cannot be said to be willful and therefore there is no justification to charge the interest on interest/compound interest/penal interest for the period during the moratorium. Therefore, we are of the opinion that there shall not be any charge of interest on interest/compound interest/penal interest for the period during the moratorium from any of the borrowers and whatever the amount is recovered by way of interest on interest/compound interest/penal interest for the period during the moratorium, the same shall be refunded and to be adjusted/given credit in the next instalment of the loan account. 32. In view of the above and for the reasons stated hereinabove, the present petitions seeking reliefs, namely, (i) total waiver of interest during the moratorium period; (ii) to extend the period of moratorium; (iii) to extend the period for invocation of the resolution mechanism, namely 31.12.2020 provided under the 6.8.2020 circu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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