Allowed

Tata Capital Housing Finance Ltd. v. Rajesh Kamal Chhaleriya and Ors.

DRAT14 Dec 2022MISC APPEAL/135/2022

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal allowed an appeal against an order that directed a Financial Institution to grant a 24-month moratorium and regularize the account. The Tribunal followed the Supreme Court's ruling in Small Scale Industrial Manufacturers Association which refused extension of moratoriums as a policy matter.

What did the court decide?

The order of the learned DRT was set aside, and the matter was remanded for the DRT to decide the Special Appeal in accordance with law.

Tata Capital Housing Finance Ltd. versus Rajesh Kamal… — Banking and Recovery | DRAT (2022)

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DEBTS RECOVERY APPELLATE TRIBUNAL, DELHI

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Misc. Appeal No.135/2022 Arising out of S.A.No.164/2022 (DRT-II, Delhi)

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Tata Capital Housing Finance Ltd. Vs

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Sh.Rajesh Kamal Chhaleriya & Ors.

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14.12.2022 Hon’ble Mr. Justice Brijesh Sethi

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Present: Mr. Sanjeev Singh, Ld.. counsel for appellant

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Mr. S.S. Rajore Raghuvanshi, Ld. counsel for respondents

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This matter has been taken up by me through Video Conferencing.

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This instant appeal has been filed against the order dated 08.06.2022, which runs as under:-

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“08.06.2022 Item no.2

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Present : Shri S.S. Rajore, counsel for the applicant Shri Harsh Sinha, counsel for respondent FI

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Matter is taken through VC

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IA no.1053/2022 is filed by the applicant borrower to issue direction to respondent FI to grant moratorium period of 24 months for paying EMIs due to financial crises caused by Covid-19.

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Ld. counsel for the respondent FI opposed the application on the ground that the applicant borrower filed the present application directly before this Court without approaching before respondent FI with any such request for moratorium period. Prayer was accordingly made to dismiss the present application for moratorium.

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On the other hand, the Ld. counsel for applicant submitted that he has already paid a sum of Rs.24 lacs to respondent FI and accordingly this Tribunal was pleased to issue direction for desealing the property vide order dated 13.05.2022. On 23.052022, the applicant also requested to issue direction to respondent FI to grant moratorium to applicant for making the remaining EMIs as per policy of the Government and RBI guidelines. However, this could not be reflected in the order sheet dt.23.05.2022. He further submitted that he approached the officials of respondent FI to grant

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moratorium period, but his request was declined. Prayer was accordingly made to allow the present application.

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Respondent FI is hereby directed to grant maximum period of moratorium to applicant borrower as per Government policy and RBI guidelines on account of Covid-19 pandemic and hereby regularize the account of the applicant for timely payment of EMIs in future.

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IA no.1053/2022 is allowed accordingly.

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Matter be listed on 08.08.2022, date already fixed in the matter.

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The appellant is aggrieved by that portion of the order of the learned DRT whereby the it has been directed to grant maximum period of moratorium to applicant borrower as per Government policy and RBI guidelines on account of Covid-19 pandemic and thereby regularize the account of the applicant for timely payment of EMIs in future. The learned counsel for the appellant has drawn the attention of this Tribunal to the first para of this order wherein it has been stated that I.A. no.1053/2022 has been filed by the applicant borrower to issue direction to respondent FI to grant moratorium period of 24 months for paying EMIs due to financial crises caused by Covid-19. Mr. Sanjeev Singh, learned counsel for the appellant, submits that by virtue of this order moratorium period of 24 months has been directed to be granted, which is in the teeth of the judgment of the Hon’ble Supreme Court in the case of Small-Scale Industrial Manufacturers Association (Registered) vs. Union of India

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& Ors. , 2021 SCC OnLine SC 246 in which the Hon’ble Court has categorically refused to extend the moratorium period. In this regard, the learned counsel for the appellant has drawn the attention of this Court to the following paras of the judgment:-

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“120. Having heard learned counsel appearing on behalf of the respective petitioners and the reliefs sought in the respective petitions, the reliefs/submissions on behalf of the petitioners can be summarized as under:

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i) a complete waiver of interest or interest on I nterest during the moratorium period;

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ii) there shall be sector-wise relief packages to be offered by the Union of India and/or the RBI and /or the Lenders:

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iii) moratorium to be permitted for all accounts instead of being at the discretion of the Lenders

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iv) extension of moratorium beyond 31.08.2020 ;

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v) whatever the relief packages are offered by the Central Government and/or the RBI and/or the Lenders are not sufficient looking to the impact due to Covid-19 Pandemic and during the lockdown period due to Covid-19 Pandemic;

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vi) the last date for invocation of the resolution mechanism, namely, 31.12.2020 provided under the 6.8.2020 circular should be extended.”

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“122. In catena of decisions and time and again this Court has considered the limited scope of judicial review in economic policy matters. From various decisions of this Court, this Court has consistently observed and held as under:

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i) The Court will not debate academic matters or concern itself with intricacies of trade and commerce;

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ii) It is neither within the domain of the courts nor he scope of judicial review to embark

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upon an enquiry as to whether a particular public policy is wise or whether better public policy can be evolved. Nor are the courts inclined to strike down a policy at the behest of a petitioner merely because it has been urged that a different policy would have been fairer or wiser or more scientific or more logical. Wisdom and advisability of economic policy are ordinarily not amendable to judicial review.

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iii) Economic and fiscal regulatory measures are a field where Judges should encroach upon very warily as Judges are not experts in these matters. ”

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“148. Similarly, the relief sought that the moratorium period should be extended and/or the last date for invocation of the resolution mechanism namely 31.12.2020 provided under the 06.08.202 circular should be extended are all in the realm of policy decisions. Even otherwise, almost five months were available to eligible borrowers when circular dated 6.8.2020 was notified providing for a separate resolution mechanism for Covid-19 related stressed

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assets. Therefore, sufficient time was given to invoke the resolution mechanism.”

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“149. Therefore, the petitioners shall not be entitled to any reliefs, namely,

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(i) total waiver of interest during the moratorium period;

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(ii) to extend the period of moratorium;

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(iii) to extend the period of invocation of the resolution mechanism, namely, 31.12.2020 provided under the 6.8.2020 circular;

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(iv) that there shall be sector-wise reliefs provided by the RBI; and

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(v) that the Central Government/RBI must provide for some further reliefs over and above the relief packages already offered which, as observed hereinabove, can be said to be in the realm of the economic policy decisions and for the reasons stated hereinabove and as observed hereinabove granting of any such reliefs would have a far-reaching financial implication on the economy of the country. It appears, whatever best can be offered has been offered for the different fields and to the common people as well as those persons who are affected due to Covid-10 pandemic. However, the relief/prayer not to charge the penal interest/interest on interest/compound interest during the moratorium period is concerned, it stands on different footing which shall be dealt with herein below.”

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“165. In view of the above and for the reasons stated hereinabove, the present petitions seeking relief, namely, (i) total waiver of interest during the moratorium period; (ii) to extend the period of moratorium; (iii) to extend the period for invocation of the resolution mechanism, namely 31.12.2020 provided under the 6.8.2020 circular; (iv) that there shall be sector-wise reliefs provided by the RBI; and (v) that the Central Government/RBI must provide for some further reliefs over and above the relief packages already offered stand dismissed. Connected IAs stand disposed of.”

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(Emphasis supplied)

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Perusal of the above paras of the judgment of the Hon’ble Supreme Court reveals that the moratorium could not have been extended beyond 31.08.2020 and it has, thus, refused to grant relief on that ground, and has clearly observed that economic and fiscal regulatory measures are a field where Judges should encroach upon very warily as Judges are not

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experts on these matters and thereafter in para 149 it has been categorically held that the petitioners therein would not be entitled to any relief of extension of the period of moratorium. In the end, in para 165, the prayer seeking to extend the period of moratorium has been dismissed.

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In view of the above judgment of the Hon’ble Supreme Court, the order passed by the learned DRT cannot be sustained in the eyes of law and the same is accordingly set aside.

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Let the counsel for the parties appear before the learned DRT on the next date and let the DRT decide the S.A. in accordance with law.

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Appeal stands disposed of.

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File be consigned to record.

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(CHAIRPERSON)

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-pk

Tata Capital Housing Finance Ltd. v. Rajesh Kamal Chhaleriya and Ors.

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Tata Capital Housing Finance Ltd. v. Rajesh Kamal Chhaleriya and Ors.

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