Excelsior Correspondent
SRINAGAR, July 21: The High Court today while entertaining a Public Interest Litigation seeking waiver of interest on loan amounts by different banks of J&K and Ladakh on the loan terms as availed on account of outbreak of COVID-19, sought reply from the two Governments, Union Government as also from J&K Bank by next date.
Senior Advocate Jehangir Iqbal Ganaie with Sheikh Umar Farooq contended before the Division bench of Chief Justice Gita Mittal and Justice Sanjay Dhar that the instant PIL has been filed for the benefit of those belonging to UTs of J&K and Ladakh.
Advocate Ganaie submitted that people of both UTs have availed loan facilities from different banks, but on account of the prevailing lockdown announced by the Government in view of outbreak of COVID-19 pandemic, are not in a position to pay the due installments including the interest charged on loan amounts.
A direction is being sought from the court in the name of Authorities of J&K Government, Government of India and J&K Bank for waiving of interest charged by the banks on the term loans during the period of lockdown as announced by the Government.
Court after hearing the contentions of petitioner counsel sought reply from J&K Government, Government of India as also the J&K Bank in opposition to the plea by or before August 11.
The petitioners are also seeking waiver of interest during the period when moratorium was granted by the banks on account of special rehabilitation/revival package for the persons affected by natural calamity-floods in the erstwhile State of J&K. “Rehabilitation package to borrowers hit by the disturbances that occurred in the erstwhile State of J&K in 2016 and 2019”, read the petition
Court said, in essence the petitioners are seeking waiver of interest on all term loans for the period relating to natural calamity of 2014, disturbances of 2016 and 2019 and that of the present COVID-19 pandemic.
It is contended that although the decision on the party of the authorities, to grant moratorium is appreciable but by providing that the interest component shall continue to accrue on the outstanding portion of the term loan during the moratorium period would render the purpose of scheme/policy of the Government useless.
Petitioners sought that notification of March 27, 2020, Circular of January 3, 2020, Circular dated December 15, 2016 and Circular dated October 24, 2014 be declared as null and void to the extent as the same directs charging of interest of loan amounts during the period of moratorium.
On March 27, RBI had permitted to grant a moratorium of three months on payment of instalments, however, the repayment schedule for such loans as also the residual tenor, will be shifted across the board by three months after the moratorium period.
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