Central Govt. Tells SC: Moratorium Period Capable Of Being Extended By 2 Years

The Supreme Court observed that a contract is void if prohibited by a statute under a penalty, even without express declaration that the contract is void

On 01st September 2020, the Central Government stated that the moratorium period is extendable by two years.

Last week, the court had directed the Centre to file an affidavit clarifying its stance on interest payments. In light of this, Solicitor General Tushar Mehta told a bench of Justice Ashok Bhushan, Justice Subhash Reddy and Justice M.R. Shah that an affidavit come on record. The Court stated it has not received on record the affidavit filed on behalf of the Union and was reluctant to adjourn the case further. But after the Solicitor General prayed for the Bench to pursue the affidavit at length, it has been adjourned to be heard tomorrow at 10:30 AM.

Highlights of the Plea:

On 4th June, the Apex Court had sought the direction of the Ministry of Finance regarding the two aspects: no interest payment on loans during the moratorium period and no interest to be charged on interest, as these are challenging times before the nation and the world at large.

The RBI said the March 27th Circular announcing the moratorium was later modified on April 17th and May 23rd by which the moratorium period was extended by another three months that is from June 1st to August 31st, 2020 on payment of all instalments in respect of term loans.    

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“Creative approach coupled with patience, makes understanding intricate issues simpler.” I am Ms. Ria Nair and my aim is to help you perceive a complex idea in a better way and seek your answer/s. I am currently pursuing my Bachelor’s in Business Administration and Law [B.B.A. LL. B (Hons.)] from Amity University, Mumbai. Understanding laws that govern human relations in all fields, gaining knowledge about aspects that govern the Universe and keeping an open mind are of primary importance to me as a law student and a human being. I hope to learn with every new opportunity and contribute to make others’ lives simpler.