SMALL SCALE INDUSTRIAL MANUFACTURES ASSOCIATION (REGD.) versus UNION OF INDIA AND OTHERS

SMALL SCALE INDUSTRIAL MANUFACTURES ASSOCIATION (REGD.) versus UNION OF INDIA AND OTHERS

Economic and fiscal regulatory measures and relief-package formulation are primarily policy matters for the Government and RBI and are amenable to judicial review only on narrow grounds (illegality, arbitrariness, mala fide). The NDMA had a National Plan and acted within its role; s.13 of the Disaster Management Act, 2005 uses 'may' and is discretionary. Petitions seeking total waiver of interest, blanket extension of moratorium, sector-wise mandatory packages, or mandamus directing specific economic reliefs are dismissed as policy matters. However, charging interest on interest/compound/penal interest for the moratorium period is unjustified where payments were deferred by government/RBI...

Parties
Petitioner: Small Scale Industrial Manufactures Association (Regd.); Respondent: Union of India; Respondent: Reserve Bank of India
Jurisdiction
India
Judgment Date
23 March 2021
Procedural Posture
Writ Petition (civil) Under Article 32 / Judgment (final Disposition)
Outcome
Writ petitions partly allowed in part and otherwise dismissed
Legal Topics
Moratorium, Interest Waiver, Resolution Framework, NDMA Duties Under DMA 2005, Sector Specific Reliefs, Statutory Interpretation of 'may'
Disaster Management Banking Regulation Economic Policy Constitutional Law Judicial Review Moratorium Interest Waiver Resolution Framework +3 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 4 Authorities cited 14 Party arguments 2 Amounts and remedies 5
Sign in to unlock

Parties

Small Scale Industrial Manufactures Association (Regd.)

Petitioner

Union of India

Respondent

Reserve Bank of India

Respondent

Procedural Posture

Writ Petition (civil) Under Article 32 / Judgment (final Disposition)

Legal Issues

  1. 1 Scope of judicial review of economic and fiscal policy measures taken by Government/RBI
  2. 2 Whether NDMA failed in duties under Sections 11-13 of the Disaster Management Act, 2005
  3. 3 Whether waiver of interest or compound interest (interest on interest) during moratorium was legally required

Ratio Decidendi

Economic and fiscal regulatory measures and relief-package formulation are primarily policy matters for the Government and RBI and are amenable to judicial review only on narrow grounds (illegality, arbitrariness, mala fide). The NDMA had a National Plan and acted within its role; s.13 of the Disaster Management Act, 2005 uses 'may' and is discretionary. Petitions seeking total waiver of interest, blanket extension of moratorium, sector-wise mandatory packages, or mandamus directing specific economic reliefs are dismissed as policy matters. However, charging interest on interest/compound/penal interest for the moratorium period is unjustified where payments were deferred by government/RBI...

Court Disposition

Writ petitions partly allowed in part and otherwise dismissed

Orders

  • There shall be no charge of interest on interest/compound interest/penal interest for the period of the moratorium (March-August 2020)
  • Any amount already recovered as interest on interest/compound interest/penal interest for the moratorium period shall be refunded to concerned borrowers and given credit/adjusted in the next instalment of the loan account