The Supreme Court of India will on June 12 hear a plea from the Confederation of Real Estate Developers' Associations of India (CREDAI) seeking to know if the Reserve Bank of India’s three-month moratorium extends to non-banking finance companies (NBFCs) and housing finance companies (HFCs) as well.
The bench of Justices L Nageswara Rao, SK Kaul and BR Gavai will hear the case today.
Here is a timeline of the case so far:
> After the lockdown, the RBI on March 27 allowed a three-month moratorium on payment of all term loans due between March 1 and May 31, on account of the coronavirus pandemic.
> Post the order, real estate builders’ body CREDAI's Haryana chapter moved the SC and sought a moratorium of six months on loan repayments by developers. It said that the three-month waiver should not be ‘discretionary’ but ‘mandatory’ for NBFCs and HFCs.
> It had said that a major part of funding took place via debentures, bonds, commercial paper are regulated by SEBI which has been totally silent on the matter. It had also pleaded that there should be a waiver of interest during the period of moratorium.
> A bench comprising Justices L Nageswara Rao, SK Kaul and BR Gavai heard the case first on May 15.
> Senior advocate Harish Salve, appearing for the association, said that the main issue was as to what happened with the RBI circular and its applicability on real estate developers.
> Solicitor General Tushar Mehta, appearing for the Centre and others, said he would seek instructions from the ministry concerned and other authorities and get back to the court.
> The SC on May 15 issued notices to the Centre and the RBI seeking their response to CREDAI’s plea. The apex court had given them two weeks to respond.
> The Securities and Exchange Board of India (SEBI) in an affidavit filed in SC has alleged that the plea filed by CREDAI appears to be a “proxy litigation" and claims it to be abusing the process of the apex court.
> The RBI has since on May 22 extended moratorium on term loans till August 31, amid the countrywide lockdown due to COVID-19.
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