The High Court of Delhi stayed the action of the Punjab and Sind Bank declaring the account as Non-Performing Assets (NPA) in the light of the circular of Moratorium Period issued by Reserve Bank of India (RBI).
The petitioner, Shakuntla Educational & Welfare Fund is a charitable society and is engaged in the business of technical and higher education. In order to set up the institutions, the petitioner had availed six-term loans from the respondent/Bank out of which four-term loans stand fully repaid in accordance with the restructured repayment plan as conveyed by the respondent.
The petitioner contended that in view of this circular issued by the RBI, whereunder a 90 days moratorium qua the instalments, which became payable after March 1, 2020, has been granted, the respondent cannot declare the petitioner’s accounts as NPA only on account of its failure to pay the instalments, which were payable on or before March 31, 2020.
Consequently, the petitioner sought the direction that the respondent bank not to declare its pending loan accounts as Non-Performing Assets (NPA). The petitioner also seeks a direction to the respondent for grant of a moratorium of three months to it in terms of circular issued by the Reserve Bank of India (RBI).
The single-judge bench consisting of Justice Rekha Palli issued an interim order restraining the Punjab and Sind Bank from declaring the account as Non-Performing Assets (NPA) in the light of the circular of Moratorium Period issued by Reserve Bank of India (RBI).
“Any classification of the petitioner’s accounts as NPA would certainly amount to altering the position as existing on 01.03.2020 and, therefore, grave and irreparable loss will be caused to the petitioner, in case, its accounts are declared as NPA, only on account of its failure to pay the instalments, which were admittedly payable on or before 31.03.2020,” the bench observed.Subscribe Taxscan AdFree to view the Judgment