Loan moratorium | Implement interest waiver as soon as possible: SC tells govt

News Network
October 14, 2020

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New Delhi, Oct 14: The Supreme Court Wednesday said the centre should implement "as soon as possible" interest waiver on loans of up to Rs 2 crore under the RBI moratorium scheme in view of the Covid-19 pandemic, saying the common man's Diwali is in the government's hands.

The apex court sought to know from the Centre as to whether the benefit of loan interest waiver for borrowers of up to Rs 2 crore during the moratorium period has “percolated” to the common man.

The court, which observed that it is concerned about how the benefit of interest waiver would be given to borrowers, said the Centre has taken a “welcome decision” by taking note of the plight of the common man but authorities have not issued any order in this regard.

“Something concrete has to be done,” a bench headed by Justice Ashok Bhushan said, adding, “Benefits of waivers to borrowers up to Rs 2 crore must be implemented as soon as possible”.

The top court, which posted the matter for hearing on November 2, told the advocates appearing for the Centre and banks that “Diwali is in your hand”.

The Centre recently told the apex court that going any further than the fiscal policy decisions already taken, such as waiver of compound interest charged on loans of up to Rs 2 crore for six months moratorium period, maybe "detrimental" to the overall economic scenario, the national economy and banks may not take "inevitable financial constraints".

The top court is hearing a batch of petitions which have raised issues concerning the six-month loan moratorium period announced due to the Covid-19 pandemic.

The bench, also comprising Justices R S Reddy and M R Shah, said when authorities have decided something then it has to be implemented.

“The government has taken a welcome decision taking note of the plight of common man. But you have not issued any order to anybody. You have simply given us the affidavit,” the bench told Solicitor General Tushar Mehta.

“We are now concerned about how waiver benefit will be given,” the bench said, adding, “We are only asking whether the loan interest waiver has percolated or not”.

During the hearing conducted through video-conferencing, Mehta told the bench that the Centre has taken an “informed decision” and has taken a “huge burden”.

“When Central Government says on an affidavit that it will be implemented then there should not be any apprehensions,” Mehta said. “There is diversity in lending and different modalities are required to be followed.”

He said banks would waive interest on interest and then will be compensated by the government and calculation will have different modalities.

“We are telling you that it is a welcome decision but they want some concrete things,” the bench observed, adding, “We welcome the decision of the Centre, only thing it should be translated practically”.

The bench said the Centre may take steps to implement its decisions referred to in the affidavits filed in the court.

Senior advocate Harish Salve, appearing for banks association, told the bench that banks would implement whatever decision has been taken by the government.

Senior lawyer Rajeev Dutta, appearing for one of the petitioners, said the banks are capitalizing by taking interest on interest on existing loans.

“We are small people with small loans (less than Rs 2 crore). They should not compound the interest in these cases," Dutta said.

To this, the bench said it has already ordered that banks cannot declare NPAs.

“We have already passed an order prohibiting classification of NPA's and without a fiscal policy, proposals cannot be altered,” it said, while asking the Centre and banks association as to when the benefits would be implemented.

“For these modalities you require one-month time,” the bench asked.

Salve said, “The complexity is such, it requires time”.

The bench, however, said that the decisions taken by the authorities should be implemented now.

The top court is hearing the petitions, including the one which has sought a direction to declare the portion of an RBI notification, issued on March 27, "ultra vires to the extent it charges interest on the loan amount during the moratorium period..."

The Reserve Bank of India (RBI) has recently filed an affidavit in the apex court recently saying that loan moratorium exceeding six months might result in “vitiating the overall credit discipline”, which will have a “debilitating impact” on the process of credit creation in the economy.

These affidavits were filed following the top court's October 5 order asking them to place on record the K V Kamath committee recommendations on debt restructuring because of the Covid-19 related stress on various sectors as well as the notifications and circulars issued so far on loan moratorium.

It has also said that the apex court’s interim order of September 4, restraining classification of accounts into non-performing accounts in terms of the directions issued by the RBI, may kindly be vacated with immediate effect.

The Kamath panel had made recommendations for 26 sectors that could be factored by lending institutions while finalising loan resolution plans and had said that banks could adopt a graded approach based on the severity of the coronavirus pandemic on a sector.

Initially, the RBI on March 27 had issued the circular which allowed lending institutions to grant a moratorium on payment of instalments of term loans falling due between March 1, 2020, and May 31, 2020, due to the pandemic.

Later, the period of the moratorium was extended till August 31 this year.

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News Network
November 13,2024

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New Delhi: The Supreme Court took a firm stance on ‘bulldozer justice’ today, affirming that the Executive cannot bypass the Judiciary and that the legal process must not prejudge the guilt of an accused. In a significant judgment, the bench led by Justices BR Gavai and KV Viswanathan set new guidelines for demolition practices, responding to petitions challenging the controversial bulldozer actions taken against individuals accused of crimes.

The rise of this practice, termed 'bulldozer justice,' has seen authorities in various states demolish what they claim to be illegal structures belonging to accused individuals. However, multiple petitions questioned the legality and fairness of this approach, bringing the matter before the court.

Justice Gavai highlighted that owning a home is a cherished goal for many families, and an essential question was whether the Executive should have the authority to strip individuals of their shelter. “In a democracy, the rule of law protects citizens from arbitrary actions by the state. The criminal justice system must not assume guilt,” stated the bench, underscoring that due process is a fundamental right under the Constitution.

On the principle of separation of powers, the bench reinforced that the Judiciary alone holds adjudicatory powers and that the Executive cannot overstep these boundaries. Justice Gavai remarked, “When the state demolishes a home purely because its resident is accused of a crime, it violates the doctrine of separation of powers.”

The court issued a strong warning about accountability, stating that public officials who misuse their power or act arbitrarily must face consequences. Justice Gavai observed that selectively demolishing one property while ignoring similar cases suggests that the aim might be to penalize rather than enforce legality. “For most citizens, a house is the product of years of labor and dreams. Taking it away must be an action of last resort, thoroughly justified,” he said.

In its directives under Article 142 of the Constitution, the Supreme Court established new demolition guidelines. These include:

Mandatory Show-Cause Notice: No demolition should occur without first issuing a show-cause notice. The person served has a minimum of 15 days or the duration stated in local laws to respond.

Transparency of Notice Content: The notice must include specifics about the alleged unauthorized construction, the nature of the violation, and the rationale for demolition.

Hearing and Final Order: Authorities are required to hear the response of the affected individual before issuing a final order. The homeowner will have 15 days to address the issue, with demolition proceeding only if no stay order is obtained from an appellate authority.

Contempt Proceedings: Any breach of these guidelines would lead to contempt proceedings. Officials who disregard these norms will be personally accountable for restitution, with costs deducted from their salaries.

Additionally, the court mandated that all municipal bodies establish digital portals within three months, displaying show-cause notices and final orders on unauthorized structures to ensure public transparency and accountability.

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News Network
November 25,2024

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Bengaluru: Karnataka Chief Minister Siddaramaiah has instructed the Hindu Religious Endowment Department to submit a proposal for constructing a gold chariot for the presiding deity of the state, Chamundeshwari, official sources said on Monday.

The directive follows a request from Member of Legislative Council (MLC) Dinesh Gooligowda, who highlighted the historical and cultural significance of the Chamundeshwari Temple on Chamundi Hill in Mysuru, which dates back to the 12th century AD.

Gooligowda noted that the existing wooden chariot, donated by devotees from Coimbatore, Tamil Nadu, has deteriorated over time.

“Devotees have expressed their desire to organise a ‘rathotsava’ using a gold chariot for Goddess Chamundeshwari. This proposal has been under consideration for some time, with an estimated cost of Rs 100 crore,” the MLC said.

He emphasised that the government’s financial involvement would not be required, as devotees are willing to contribute towards making the chariot a reality.

Gooligowda proposed a deadline for the 2025 Dasara festival for the completion of the chariot, ensuring it is ready for the grand procession featuring the idol of Chamundeshwari.

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News Network
November 19,2024

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In the wake of the tragic drowning of three students at a resort near Ullal on the outskirts of Mangaluru city, the tourism department in Dakshina Kannada is set to implement comprehensive safety guidelines for properties with swimming pools or beach access. This initiative aims to ensure guest safety and prevent similar incidents in the future.

New Safety Mandates for Resorts and Homestays

Rashmi S.R., deputy director (in-charge) of the tourism department, announced, “We will instruct all homestays and resorts to enforce precautionary measures, especially those with pools or direct beach access. Properties must ensure 24/7 supervision, particularly during guest hours. This tragedy highlights the importance of having trained personnel on-site.”

Key Safety Guidelines

The district, home to around 150 homestays and 130 resorts, will see the following measures enforced:

  • Clearly displaying pool depths.
  • Installing adequate safety equipment, such as life buoys.
  • Employing trained lifeguards at all times.
  • Establishing clear pool operating hours.
  • Reviewing and implementing standard operating procedures (SOPs) for pool and beach usage.

Booming Beach Tourism Calls for Vigilance

Manohar Shetty, president of the Association for Coastal Tourism (ACT), Udupi, highlighted the growing popularity of beachside resorts, particularly during peak seasons. Properties in Udupi, often fully booked with tourists from Bengaluru, Mysuru, Kodagu, and Shivamogga, face increasing pressure to maintain safety standards.

Udupi district boasts 22 beachside commercial properties catering to this rising demand.

Shetty emphasized, “Authorities must scrutinize safety measures and carefully evaluate guidelines before issuing new resort licenses. Panchayats should rely on the Karnataka Town and Country Planning Act when handling such cases.”

Long-Term Solutions for Water Safety

Recognizing the need for a cultural shift in water safety, Shetty proposed integrating swimming lessons into school curricula. This move would not only equip students with essential skills but also encourage safe participation in water-based activities.

A Safer Tomorrow for Coastal Tourism

As the tourism sector thrives, Mangaluru’s proactive approach underscores its commitment to visitor safety. The tragic incident serves as a wake-up call, propelling the industry towards stricter regulations and better preparedness, ensuring that coastal vacations remain both enjoyable and safe.

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