The Delhi High Court has asked state-run SIDBI to ascertain whether RBI's moratorium on loan repayment in the wake of COVID-19 outbreak would be applicable to NBCFs like Indiabulls Commercial Credit Ltd (ICCL) before demanding further loan instalments from it.
The direction by Justice Rekha Palli came on ICCL's plea challenging a demand raised by Small industrial Development Bank of India (SIDBI) for payment of the loan instalment due in April this year.
However, since Indiabulls had paid the instalment 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 of 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 (ICCL) towards the due instalments against the petitioner till it obtains a clarification from respondent 2 (RBI).
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 instalments in respect of all term loans outstanding as on March 1, subject to the borrower making such a request.
ICCL, 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 a clarification from RBI whether the circular was applicable on Non-Banking Financial Companies (NBFCs) like Indiabulls.
SIDBI also directed ICCL to pay the instalment due in April.
ICCL had borrowed Rs 575 crore from SIDBI and according to the petition had not defaulted on any of repayments.