In Brief
Small Scale Industrial Manufactures Association and 23 other petitioners challenged RBI's moratorium notification of 27 March 2020, which deferred loan repayments during the pandemic but allowed interest to accrue. Petitioners sought waiver of all interest during moratorium, sector-wise relief packages, and extension of moratorium. The Court dismissed most prayers, holding that economic policy decisions lie within the exclusive domain of the Government and RBI, and courts cannot interfere with such decisions unless patently arbitrary. However, the Court held that charging compound interest/penal interest during the moratorium period is unjustified because deferment cannot constitute willful default, and directed all such amounts already recovered be refunded and credited against future instalments. The petition was partly allowed only to this limited extent."
The lawyer headnote and full judgment text are available to registered users.