All kinds of loans cannot be put under moratorium, Sebi tells SC
“There is no restriction upon the real estate industry to receive and recover money from their customers during lockdown” SEBI IN ITS AFFIDAVIT
Almost all industries in the country have been suffering due to Covid-19 pandemic but all kinds of loan and contractual transactions cannot be put under the moratorium, the Securities and Exchange Board of India (Sebi) has told the Supreme Court.
It filed an affidavit in this regard in the apex court, which had sought its stand on a plea which sought a clarification on whether the Reserve Bank of India’s circular regarding a moratorium on loan repayment amid the pandemic applies to non-banking financial corporations (NBFCS) and if real estate firms are eligible for it.
Seeking dismissal of the plea filed by the Confederation of Real Estate Developers’ Associations of India, Sebi said it appears to be “proxy litigation” where the petitioners have raised grievances and issues relating to NBFCS and housing finance corporations, rather than issues relating to their own members. “That not only the real estate sector but almost all the industries in India have been suffering due to the Covid-19 pandemic and as a result of this, it does not imply that all kinds of loan and contractual transactions are to be put to under moratorium,” the affidavit said.
Regarding the petitioner’s contention that the real estate sector is only on the receiving end during the lockdown, the Sebi said: “There is no restriction upon the real estate Industry to receive and recover money from their customers during lockdown”.
It said on May 13, the ministry of housing and urban affairs had issued an advisory to states to extend the timelines for completion of projects, which has been delayed due to the pandemic and also for various statutory compliances under the Real Estate (Regulation and Development) Act, 2016.
“The net effect of the aforesaid announcement will benefit the real estate developers as there will be an extension of six months for the completion of the project with further option of three months extension,” it stated.