The Delhi High Court has asked state-run Small Industries Development Bank of India to ascertain whether the Reserve Bank of India's moratorium on loan repayment in the wake of the Covid-19 outbreak would be applicable to non-banking finance corporations like Indiabulls Commercial Credit Ltd. before demanding further loan installments from it.
The direction by Justice Rekha Palli came on Indiabulls Commercial Credit's plea challenging a demand raised by SIDBI for payment of the loan installment due in April this year. However, since Indiabulls had paid the installment due in April before the matter was taken up for hearing, the court observed that nothing else survived in the company's plea and disposed it off as “infructuous”.
While disposing of the plea, the court made it clear that "respondent 1 (SIDBI) will not raise any further demand on the petitioner towards the due installments against the petitioner till it obtains a clarification from the respondent 2".
The Reserve Bank of India on March 27 had issued a circular giving liberty to all banks to allow a moratorium of three months on payment of installments in respect of all term loans outstanding as on March 1, subject to the borrower making such a request.
Indiabulls Commercial Credit, in its plea, had claimed that when it requested SIDBI to grant it a three-month moratorium, the state-run bank said it was awaiting clarification from RBI whether the circular was applicable on non-banking financial companies like Indiabulls. SIDBI also directed the Indiabulls group entity to pay the installment due in April.
Indiabulls Commercial Credit had borrowed Rs 575 crore from SIDBI and according to the petition had not defaulted on any of repayments.
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