Supreme Court Seeks Reply From Centre, RBI On CREDAI’s Plea For Clarification On RBI Circular On Moratorium.

The Supreme Court issued a notice to the central government and the Reserve Bank on Friday on CREDAI’s plea. CREDAI is an organization of real estate businessmen. On behalf of CREDAI, the petition asked whether real estate companies are entitled to take advantage of the Reserve Bank’s loan repayment moratorium policy.

The Bench of Justice L Nageswara Rao, Justice Sanjay Kishan Kaul and Justice B R Gavai were hearing the case in the Supreme Court. Hearing through video conferencing, the bench sought a response from the Reserve Bank and others on CREDAI’s plea. In fact, CREDAI alleges that it is not clear whether real estate companies are eligible to avail the benefit of this policy or not.

On behalf of CREDAI, senior lawyer Harish Salve, argued before the bench that the situation is not clear about the implementation of the Reserve Bank’s circular and real estate traders. Salve said that the Reserve Bank’s circular is binding on banks, but some banks are not giving the benefit of the policy of avoiding loans to real estate traders. Salve told the bench that the Reserve Bank should clear the position.

On behalf of the Centre and others on the issue, Solicitor General,Tushar Mehta said that he will inform the Court of the matter with necessary instructions from the concerned Ministry in this regard. The bench then issued a notice on CREDAI ‘s plea and adjourned the hearing for two weeks. Earlier, the Apex court had asked the Reserve Bank to ensure that its circular on the policy of avoidance of loans during March to 31 st may should be faithfully implemented.

Another prayer made by CREDAI is for a direction to lenders to not charge an interest on the loan for the period of moratorium.

Solicitor General, Tushar Mehta was asked by the Court to take instructions on the plea which has now been posted for after two weeks. The petition was filed by Advocate EC Agrawala and the Association was represented by Senior Counsel Harish Salve.

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