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

A (vi) Stressed MSMs: Financing for stressed MSMEs has been enabled through launch of a subordinate debt scheme. (viii) Non-Banking Finance Companies (NBFCs): Partial Credit Guarantee Scheme of Rs.45,000 crore and Special Liquidity Facility of Rs.30,000 crore have been launched for liquidity to B NBFCs. 7.3 It is further submitted that the Ministry of Finance was fully alive to the problems of the borrowers which obviously cannot be a homogenous class, but by its very nature, has various categories of borrowing, namely, corporate loans, MSME loans and personal loans etc. It is submitted that these three broad categories may have several sub-categories within it, having their own peculiar problems/difficulties and, therefore, needing peculiar remedies and solutions. It is submitted that because of the very nature of the problems faced by various kinds and categories of stakeholders and the wide-ranging difference in the problems faced by several sub-sections of those categories, it was consciously considered that it would not have been possible for the Ministry to provide for a “one size fits all” approach and it would be advisable that steps be taken for grant of relief/solutions for the problems arising during the pandemic through the regulator of the banking sector, viz., the RBI. E 7.4 It is submitted that it was for this reason that the Ministry of Finance took the initiative and started interaction with RBI in this behalf, requesting the RBI to provide for various measures of relief to the borrowers. The Finance Ministry and RBI remained in touch and considering the very nature of the reliefs to be considered and provided, RBI took the decision requiring all banks to take various measures for relief. It is submitted that while taking such financial policy decisions having implications on the stability of the economy, the decisions are required to be taken keeping in mind several administrative and financial considerations/exigencies, duly keeping in mind the following complex issues that are required to be considered: (i) That there are a variety of borrows as stated above, namely corporate borrowers (including large industry and large enterprises), Micro, Small and Medium Enterprise (MSME) borrowers, and retail/personal borrowers which include, inter alia, borrowers for housing loans, education loans, vehicle loans, etc. H

SMALL SCALE INDUSTRIAL MANUFACTURES ASSOCIATION 43 (REGD.) v. UNION OF INDIA [M. R. SHAH, J.]

(ii) That there are several categories of banks and other lending A institutions that are required to be kept in view while taking financial and economic decisions that are very sensitive for financial stability of the country. These may include scheduled commercial banks (which include, inter alia, Regional Rural Banks, small finance banks, local area banks, nationalized banks, etc.), Urban Co- B operative Banks (UCBs), State Co-operative Banks (StCBs) and District Central Co-operative Banks (DCCBs) that cater to rural credit in the country, Non-Banking Financial Companies (NBFCs), Housing Finance Companies (HFCs), all India financial institutions, etc. (iii) That the structuring of the loan in each category of bank/ C lending institution and each category of borrower would be different not only in terms of the rate of interest and in terms of duration of the lending facility but also in several other distinct aspects. (iv) In any banking sector when financial assistance is rendered by way of loans, a balance has to be maintained with the interest D of crores of depositors, most of whom are merely depositors and surviving on the interest they receive on their deposits. On an approximate basis, there are over 197 crore deposit accounts in the country in commercial banks alone, in which depositors have deposited their money and are earning interest. E 7.5 It is further submitted that to mitigate the burden of debt servicing brought about by disruptions on account of Covid-19 pandemic, the circulars issued by RBI permitted lending institutions to …. (a) to grant a moratorium on payment of all instalments, including interest, of terms loans falling due between 1.3.2020 and 31.8.2020; and (b) defer F recovery of interest on working capital loans for the period from 1.3.2020 to 31.8.2020. It is submitted that under the aforesaid circulars a moratorium on payment of both, principal and interest was by its very nature a temporary standstill arrangement which gives relief to the borrowers in the two ways, namely, (i) the account does not become NPA despite non-payment of dues; and (ii) Credit Information Companies G shall ensure that the moratorium does not adversely impact the credit history of the borrowers. It is submitted that while the standstill applicable to bank loans results in the bank not getting its funds back during the period of H

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A moratorium, the bank continues to incur cost on bank’s deposits and borrowings. It is submitted that since a moratorium offers certain advantages to borrowers, there are costs associated with obtaining the benefit of a moratorium. 7.6 It is submitted that immediately upon the serious effects of B Covid-19 being felt in the country, the Ministry of Finance addressed a letter to the RBI dated 1.4.2020 which was after moratorium declared by the RBI. Vide the said letter, the Ministry of Finance requested the RBI to do something more than the moratorium. 7.7 It is submitted that any moratorium is transient by its very nature and has to end one day. It is submitted that thus, the best interest of the economic health of the country, as well as that of the respective borrowers would be best served by paving the way for a more durable long-term solution of debt restructuring. It is submitted that the revival of the stressed borrowers is contingent upon debt restructuring of their loans/dues rather than hinge on extending the moratorium. It is submitted that the RBI has come out with two circulars dated 6.8.2020, facilitating revival of real sector activities and mitigating the impact on the ultimate borrowers by enabling lenders to grant concessions to borrowers for Covid-19 related stress in personal, MSME and corporate loans. It is submitted that this would enable lenders to implement individual resolution plans in respect of the loans having stress on account of Covid-19 pandemic. It is submitted that the said approach would also enable continuance of classification of such loans as standard, i.e., without treating them as NPA. 7.8. It is submitted that the RBI Circulars dated 6.8.2020 take care of all categories of lending institutions and all categories of borrowings as aforesaid, while leaving the nature and the kind of the relief to be given to the lending institution since each category of lending institution would have its own bank/institution – specific financial scenario in terms of the nature of advance, the nature of borrowers, rate of interest etc. That Circular dated 6.8.2020 takes care of the MSME Sector, personal loans and corporate loans, keeping in mind the overall financial stability of the economy, economic stability of banking sector and interest of the depositors in mind. It is submitted that considering the fact that the time limit for continuance of the present economic issues is uncertain, H

SMALL SCALE INDUSTRIAL MANUFACTURES ASSOCIATION 45 (REGD.) v. UNION OF INDIA [M. R. SHAH, J.]

as a policy it is undesirable to either give any “one size fit all” solutions, A nor would it be desirable to provide for a static relief formula. Such reliefs are given depending upon the availability of resources and without compromising the financial stability of the banking sector, and are always subject to changes keeping in mind the evolving dynamic situation at various stages. B 7.9 It is submitted that with the framework under the RBI Circulars dated 6.8.2020, banks are fully empowered to resolve Covid-19 related stress and customise relief to individual borrowers through grant of various concessions in terms of:- i) alteration in the rate of interest and haircut on amount payable C as interest; (ii) extension of the residual tenor of the loan, with or without moratorium, by up to two years; (iii) waiving penal interest and charges; D (iv) rescheduling repayment; (v) converting accumulated interest into a fresh loan with a deferred payment schedule; and (vi) sanction of additional loan. E 7.10 It is submitted that so far as the question of waiver of compound interest/interest on interest is concerned, the said issues are required to be examined in the context of the larger financial constraints faced by the country in particular and the world in general. It is submitted that as a part of effective fiscal planning, which is being done at a stage where nobody is aware as to the time till when the present situation may continue, with either more or less gravity, a delicate balancing act is required by Government in dealing with the financial impacts of the pandemic. It has to conserve financial resources for a long and uncertain battle on the public health front, which has its own huge financial implications. Businesses need to survive. Lending institutions too must survive and promises made to depositors have to be honoured. Jobs and livelihoods need to be safeguarded and every attempt is to be made to bring back the economic growth. Therefore, use of public resources for any category of stakeholders must be carefully calibrated. Unintended consequences can arise and financial stability itself could be imperilled, if due consideration is not given to all relevant aspects. H

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A 7.11 It is submitted that right from the initial entry of the pandemic in our country, which started facing its effects [including the financial impact], the Central Government has proactively taken steps either itself or through RBI, which already had their financial impact, which was/is required to be kept into consideration while taking further decisions either while granting moratorium which, in fact, is deferment [and not waiver] B as well as while taking the present decision regarding relief in compounding of interest. The following steps taken by the Central Government have their own financial impacts which would require the Central Government to rationalise any kind of waiver at this stage as going any further than what is stipulated hereunder may be detrimental to the overall economic scenario, and the economy and the nation or the banking sector may not be able to take the financial constraints resulting therefrom. 7.12 It is submitted that as such the Central Government has already given various reliefs and by providing various reliefs there already exists substantial financial burden. It is submitted that having realised that the pandemic has caused stress to large and small businesses and to individual borrowers who have lost jobs and livelihoods and they need relief which will help them get back on their feet, it has necessitated multi-pronged relief. It is submitted that the Central Government has announced the following reliefs, (1) Garib Kalyan Package; and (2) Aatma E Nirbhar Package. It is submitted that the Garib Kalyan Package was for Rs.1.70 lakh crore involving free food grains, pulses and gas cylinders and cash payment to women, poor senior citizens and farmers. More than 42 crore poor people received financial assistance of Rs. 65,454 crores F under the package. It is submitted that the Aatma Nirbhar Package was for Rs. 20 lakh crores, involving support to MSMEs, Non-Banking Finance Companies, agriculture, sectors allied to agriculture, contractors, street vendors, State Governments, relief in provident fund contribution, extension of subsidy on home loans etc. G 7.13 It is submitted that so far as the question of interest on interest is concerned, what is “moratorium” is required to be considered. It is submitted that the word “moratorium” is categorically defined by the RBI, while issuing various circulars. The relevant circulars of RBI show that “moratorium” was never intended to be “waiver of interest”, but H “deferment of interest”. In other words, if a borrower takes benefit of

SMALL SCALE INDUSTRIAL MANUFACTURES ASSOCIATION 47 (REGD.) v. UNION OF INDIA [M. R. SHAH, J.]

the moratorium, his liability to make payment of contractual interest (both normal interest and interest on interest) gets deferred for a period of three months and subsequently three months thereafter. It is submitted that this decision was taken keeping the larger economic scenario in mind, more particularly the burden which would otherwise fall upon the banks which will have to perforce pass it on the depositors and/or upon the Government which will have its own detrimental impact on other welfare measures. It is submitted that after a very careful and major consideration of several fiscal and financial criteria, its inevitable effects and keeping the uncertainty of the existing situation in mind, the payment of interest and interest on interest was merely deferred and was never waived. C It is submitted that even the borrowers have understood the difference between the waiver in the interest on loan and the deferment of payment of instalments for that loan and, therefore, a majority of the borrowers have, in fact, not taken the benefit of the moratorium, which is nothing but deferment of payment of instalments. D 7.14 Now so far as the waiver of interest is concerned, it is submitted that if the Government were to consider waiver of interest on all the loans and advances to all classes and categories of borrowers corresponding to the six-month period for which the moratorium was made available under the relevant RBI circulars, the estimated amount is more than Rs. 6 lakh crores. It is submitted that if the banks were to bear this burden, it would necessarily wipe out a substantial and a major part of their net worth, rendering most of the banks unviable and raising a very serious question mark over their very survival. It is submitted that this was one of the main reasons why waiver of interest was not even contemplated and only payment of instalments was deferred. 7.15 It is submitted that even otherwise the lending activity of any bank is always enabled by the deposits that depositors/customers hold in the lending banks. Such depositors are much more in number than the number of borrowers. It is submitted that it is estimated that in the Indian G Banking system for every ‘loan account’ there are about 8.5 ‘deposit accounts’. The banks can pay interest to depositors only because borrowers pay interest to the bank. This transaction of depositors/banks/ borrowers is inevitably a part of a chain that can never be permitted to be broken. It is submitted that therefore the contractual interest on all H

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A outstanding advances will have to be charged even during the period of deferment and if this compounding interest is not received from the borrowers for any particular period, a commensurate denial of interest to customers holding deposits is inevitable and unimaginable and would obviously be unacceptable considering the categories of depositors. B 7.16 It is submitted that waiving compound interest/waiving interest would result in very substantial and significant financial burden. There are several categories of banks, like Private Sector Banks, Small Finance Banks, Regional Rural Banks, Cooperative Banks, NBFCs etc. The classes and categories of borrowers also varies throughout the nation, and these can be broadly classified as big borrowers and small borrowers. C It is submitted that it is impossible for banks to bear the burden resulting from waiver of compound interest/interest without passing on the financial impact to the depositors or affecting their net worth adversely, which would not be in the larger national economic interest. It is submitted that the Government bearing this burden would have an impact on several other pressing commitments being faced by the nation, including meeting direct costs associated with pandemic management, addressing basic needs of the common man and mitigating the common man’s problems arising out of loss of livelihood. 7.17 It is submitted that in view of the aforesaid cumulative circumstances, after careful consideration and weighing all possible options, the Central Government has decided to continue the tradition of handholding the small borrowers and, therefore, now the Government has granted the relief of waiver of compound interest during the moratorium period, limited to the most vulnerable categories of borrowers. F It is submitted that this category of borrowers, in whose case, the compounding of interest will be waived, would be MSME loans and personal loans up to Rs. 2 crores of the following categories: (i) MSME loans up to Rs.2 crore (ii) Education loans up to Rs.2 crore G (iii) Housing loans up to Rs.2 crore (iv) Consumer durable loans up to Rs.2 crore (v) Credit card dues up to Rs.2 crore (vi) Auto loans up to Rs.2 crore H

SMALL SCALE INDUSTRIAL MANUFACTURES ASSOCIATION 49 (REGD.) v. UNION OF INDIA [M. R. SHAH, J.]

(vii) Personal loans to professionals up to Rs. 2 crore A (viii) Consumption loans up to Rs.2 crore It is submitted that the aforesaid decision has been taken, after examining the possible fiscal scenario in case of a complete/partial waiver and after gathering the material details for reaching the decision-making process, and while keeping in mind the interest of particular class of borrowers during the unprecedented period the country is facing. 7.18 It is further submitted that the resolution framework announced by the RBI provides that loan accounts which slip into NPA between invocation and implementation may be upgraded as standard on the date of implementation itself. It is further submitted that so far as the apprehension that credit rating agencies may record a downgrade to NPA for defaults during the moratorium, it is submitted that Securities and Exchange Board of India (SEBI) has already issued a Circular on 30.03.2020 providing for relaxation from recognition of default due to the moratorium. On 31.08.2020, it has further specified that in cases of restructuring, the same may not be considered a default by rating agencies. 7.19 It is further submitted that to give further relief, Government has already suspended the operation from 25.03.2020 of Sections 7, 9 and 10 of the Insolvency and Bankruptcy Code, 2016 to protect corporate borrowers impacted by the Covid-19 crises. It is submitted that even the E Kamath Committee set up by the RBI has recommended financial parameters for debt restructuring of 26 sectors affected by Covid-19. It is submitted therefore that whatever best could be done by the Government of India, the same has been done. 7.20 Now so far as the issues raised by a number of petitioners and interveners seeking Sector-specific Reliefs, it is submitted that the various measures taken by the Government and the RBI, referred to hereinabove, include not only reliefs applicable across the board but also reliefs for the specific sectors. The petitioners/interveners cannot pray for sector-specific relief by either waiver or restructuring by way of present proceedings under Article 32 of the Constitution of India as the question of such financial stress management measures require examination and consideration of several financial parameters and its impact and are not suited for being judicially decided or be subjected to judicial review. H

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A It is submitted that even otherwise, the Aatma Nirbhar Package offers sector-specific reliefs for the power sector, real estate sector, MSME sector. It is submitted that more than Rs.90,800 crore liquidity injection for power distribution companies has been sanctioned, substantially enabling power distribution companies to pay their outstanding dues to power producers and transmission companies. It is submitted that the Government advisory has been issued for extension of registration and completion dates of real estate projects under RERA by treating Covid-19 as an event of force majeure. It is submitted that Credit- linked Subsidy Scheme for Housing (Pradhan Mantri Awas Yojana) has been extended by one year, providing subsidy for purchase of residential real estate. It is submitted that so far as relief to MSME Sector is concerned, an Emergency Credit line up to Rs. 3 lakh crores, backed by 100% Government Guarantee, has been launched to enable MSMEs to get back to regular operations. It is submitted that Rs.1.87 lakh crore has already been sanctioned with Credit Guarantee Scheme for Subordinate Debt has been launched to help stressed and NPA MSME D units. It is submitted that 2% subvention on interest rate is being given for small business loans. 7.21 It is further submitted that with regard to reliefs sought by various petitioners/applicants in terms of extension of moratorium, applicability of the resolution framework, fixation of interest rate, transmission of rate cuts, delinking of interest rate from credit rating of the borrower and moratorium on repayment of non-credit instruments that the setting of interest rates and other norms for restructuring which includes moratorium involves evaluating projections of cash flows and viability. This, in turn, requires expertise, technical knowledge of financing, and experience in dealing with the subject. Therefore, eligibility of proposals, benchmarks for viability, assessment of reasonableness of assumptions and finally acceptance and monitoring of resolution plans are matters best dealt with between the borrowers and the lending institutions concerned. G 7.22 It is submitted that the Central Government and all stake holders have discharged their responsibility in the best possible manner under the circumstances which, by themselves, are unprecedented circumstances. It is submitted that all the decisions taken by the Central Government, the RBI as a regulator and the lending institutions are taken keeping in mind the severe financial stress globally as well as nationally H

SMALL SCALE INDUSTRIAL MANUFACTURES ASSOCIATION 51 (REGD.) v. UNION OF INDIA [M. R. SHAH, J.]

and while ensuring that the sources are utilized so that the national A economy and the economy of the banking sector can withstand the present financial situation, the duration of which is unknown. 7.23 Now so far as the submission that the National Plan, as required to be prepared under Section 11 of the DMA 2005 has not been prepared and that the NDMA has failed to perform its duty cast under B Sections 12 & 13 of the DMA 2005 is concerned, Shri Mehta, learned Solicitor General has submitted as under: (i) that the DMA 2005 contemplates a “National Plan” under section 2(l) of the Act. Such plan is to be prepared under Section 11 of the DMA 2005. That the NDMA has, in fact, prepared an exhaustive and comprehensive “National Disaster Management Plan” which takes care of several disaster known to humanity, like cyclone and wind, floods, urban flood, earthquake, tsunami, landslides, snow avalanche, draught, cold waves, thunderstorm, lightening etc. cloud burst and hailstorm, glacier lake outbreak flood, heat wave, chemical (industrial) disaster, nuclear and radiological emergencies, biological and public health emergencies, fire hazard and forest fire hazard; (ii) that the present disaster can fall under “biological and public health emergencies” under clause 7.15 of the National Disaster Management Plan. That there are certain disasters which are and have been globally known to be unknown to the humanity as a race. It is submitted that what the entire world is facing in the Covid-19 is, one such unforeseen disaster termed as “global catastrophe”. It is submitted that the National Plan which is made in November, 2019, envisages such rarest of the rare “global catastrophe risk events”. It is submitted that by its very nature, such a global catastrophe cannot be either predicted or prevented nor can any straightjacket procedure for its management be laid down. Each country will have to respond to such global catastrophe in the best possible manner under the circumstances in the spheres of public health, finance etc. The present situation falls in the category of “global catastrophe risk” as stipulated in clause 2.8 of the National Disaster Management Plan. 7.23.1 It is submitted that in light of the aforesaid, the responses and the reliefs measures taken by the nodal Ministries are required to be considered. It is submitted that it was not possible to lay down any straight- jacket methodology of dealing with such disaster and each country in H

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A the world is responding to the challenges in the best possible manner with rationalised utilization of resources. 7.23.2 It is submitted that in the context of the unprecedented position, the scheme of DMA 2005 is required to be examined. After referring to the Statement of Objects and Reasons of the DMA 2005, it is submitted by Shri Mehta, learned Solicitor General that the Statement of Objects and Reasons as well as the scheme of the Act, the Act envisages a statutory mechanism to deal with the disaster. It is submitted that so far as the National Disaster Management Authority (NDMA) is concerned, it is established under Section 3 of the Act with the Hon’ble Prime Minister of India as its Chairperson with other members to be nominated by the Hon’ble Prime Minister and discharges the powers and functions enumerated under Section 6 of the Act. It is submitted that the NDMA is an administrative body having limited function stipulated in Section 6 of the Act. It is not envisaged to be a “Super Government” which becomes repository of all functions and powers of the Ministries D and Departments of the Government. It is submitted that it is not that once a disaster as defined under Section 2(d) of the Act takes place, the functions of all Central Government Ministries stand vested in the NDMA and each and every measure shall be taken either only by the NDMA and not by the respective Ministries/Departments or at least vetted or ratified by NDMA. E 7.23.3 After referring to Sections 2 (a), (b), (c), (d), (e), (i), (m), (n), (o) and (p) and Section 6 of the Act, it is submitted by Shri Mehta that the disaster management under the Act by NDMA is restricted to Section 6 of the Act, while the nodal ministries under the National Plan take the steps. It is submitted that the NDMA itself would not start taking mitigating or relief measures unless and so long as the Central Government (acting through various Ministries/Departments) fails to do so. Referring to Sections 35 and 36 of DMA 2005, it is submitted that it is for the respective ministries or departments of the Government of India which take steps for giving relief measures as a part of disaster management. 7.23.4 It is submitted that the NDMA is alert and is functioning much prior to the outbreak of pandemic in our country through Advisory Committee under Section 7, National Executive Committee under Section 8 and sub-Committees under Section 9 of the Act. It is submitted that under the National Plan which is a statutory plan prepared under the H Act, an institutional framework is provided which is as under:

SMALL SCALE INDUSTRIAL MANUFACTURES ASSOCIATION 53 (REGD.) v. UNION OF INDIA [M. R. SHAH, J.]

1.14.1 National Level A

Figure 1-3: National-level disaster management – basic institutional framework E It is submitted that therefore the National Disaster Management Plan also envisages nodal ministries for management of different disasters. It is submitted that National Plan prepared by the NDMA itself envisages that each category of disaster will be dealt with by a nodal ministry. F 7.23.5 It is submitted that Covid-19 was a disaster of such a nature that it could not be confined to one nodal ministry. Whatever measures/ reliefs were required to be taken/given were provided by every ministry in each and every way needed. It is submitted that the Ministry of Railways provided free rails for transport of migrants, Ministry of Health and Family Welfare dealt with the substantial part of disaster management G namely taking care of public health and hospital infrastructure, Ministry of Agriculture & Farmer Welfare provided for various reliefs in the agriculture sector, Ministry of Housing and Urban Affairs issued separate relief measures for real estate sector etc. H

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A Similarly, Ministry of Finance, whose role otherwise was to finance the measures undertaken by other Ministries also undertook several reliefs in terms of financial package and either directly or through RBI relief ensures for stressed accounts. 7.23.6 It is submitted that considering the very nature of the B pandemic which was not confined to any specific geographic location but at PAN-India impact having adversely affecting the various fields of human life, the disaster management authority consisted “Empowered Groups” under Section 10(2)(h) and (i) for comprehensive action and integrated response. The same was published by the Chairperson of National Executive Committee constituted under Section 8 of the Act. C One of the empowered groups was “economic and welfare measure”. It is submitted that the said empowered group functions as a limb of NDMA as the same is constituted under the Act by the Chairman of the National Executive Committee. 7.23.7 It is submitted that the petitioners are under some misconception that the functions of all ministries are to be discharged by the NDMA and the NDMA should take a decision for the area in each ministry. It is submitted that so far as the economic impact of the present disaster is concerned, it is essentially the function of the Ministry of Finance and RBI to take measures under Section 36 of the Act and the question of NDMA stepping into will not arise. 7.24 Now so far as the reliance placed by the petitioners upon Section 13 of the Act is concerned, it is submitted that in Section 13 the word used is “may”. It is submitted that the word “may” used in Section 13 shall have to be read as an enabling discretionary provision and not mandatory. The legislature has in its wisdom and foresight refrained from using the word “shall”. It is submitted that the interpretation of the word “may” as “shall” will lead to consequences which are never intended by the legislature. It will also lead to disastrous consequences. 7.24.1 It is submitted that the provision of Section 13 is an enabling provision in which in any given set of facts the NDMA can “recommend” relief in repayment of loans or grant of fresh loans. If the word “may” be used as “shall”, the only consequence it may have is a mandate of law to grant relief in repayment of loan or grant of fresh loan despite [and without looking into an over financial and economic impact on the national economy] en bloc. The meaning of the word H “shall” would mean NDMA giving financial relief only in one sector

SMALL SCALE INDUSTRIAL MANUFACTURES ASSOCIATION 55 (REGD.) v. UNION OF INDIA [M. R. SHAH, J.]

namely banking sector [as the contingencies mentioned in Section 13 A are relatable to Banking Sector] even at the cost of destroying the economy of the nation, destroying the stability of the banking sector and even at the cost of “disaster management” in other areas [like public health, medical infrastructure etc.] other than banking sectors. 7.24.2 Section 13 may perhaps be used in case of localized disasters like Bhopal Gas tragedy or earthquake in Gujarat. However, when a national disaster takes place, the disaster is to be managed through several ministries. Food Ministry will distribute food which would involve expenditure, agricultural ministry will give boost to the agricultural sector by various relief measures, Health Ministry will take charge of treatment and public health issues, Home Ministry will implement measures for prevention of spread and other ministries will have to do same in their respective spheres. 7.24.3 Use of the word “may” and “shall” would mean the entire economy of the country shall have to be divested and used in and through banking sector leaving all other areas untouched and even at the cost of national economy and the stability of the banking sector. It is submitted that this could never have been the intention of the legislature. In support of above, Shri Mehta, learned Solicitor General has relied upon the decisions of this Court in the cases of Pradip Kumar Maity v. Chinmoy Kumar Bhunia (2013) 11 SCC 122 (para 6); E Chinnamarkathian v. Ayyavoo (1982) 1 SCC 159 (paras 24 to 26); Official Liquidator v. Dharti Dhan (P) Ltd. (1977) 2 SCC 166 (paras 7 to 10); Bachahan Devi v. Nagar Nigam, Gorakhpur (2008) 12 SCC 372 (para 18); Delhi Administration v. Umrao Singh (2012) 1 SCC 194 (para 13); and Union of India v. Kumho Petrochemicals F Co. Ltd. (2017) 8 SCC 307 (paras 34 &35). 7.24.4 It is further submitted that the NDMA has not done anything is otherwise also factually incorrect. It is submitted that it is uncharitable and unfair to the unprecedented effort made by the NDMA and various ministries including the Ministry of Finance. It is submitted that in view G of the hearing which took place before this Court earlier, the NDMA also took cognizance of the issues being dealt with by the RBI and sent its “views and recommendations” vide OM dated 28.08.2020 and opined that in view of the same the RBI may consider granting further reliefs as deemed appropriate after considering and taking into account the financial relief packages issued by the Ministry of Finance, as well as, H

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A other relief measures that have already been issued and declared by RBI itself. It is submitted that “views and recommendations” of NDMA were communicated to RBI vide letter dated 31.08.2020. 7.24.5 It is submitted that the “views and recommendations” of the NDMA deal with broad financial policy decisions having economic implications and other implications in the banking sector. Therefore, the Ministry of Finance, vide letter dated 31.08.2020, forwarded the “views and recommendations” of the NDMA to RBI requesting it to consider the “views and recommendations” of NDMA regarding relief in repayment of loans by borrowers affected by Covid-19, so that RBI may consider the same while charting further course of action depending upon, inter alia, the aforesaid parameters. 7.24.6 It is submitted that therefore in light of the RBI Circulars dated 27.3.2020, 23.5.2020 and 6.8.2020, read with the “views and recommendations” of the NDMA regarding relief in repayment of loans by borrowers affected by Covid-19 expressed vide OM dated 29.08.2020 D and also in light of the various measures taken by the Central Government, appropriate reliefs and concessions for repayment of loans by the borrowers affected by Covid-19 have already been granted. The RBI framework under the circulars dated 6.8.2020 also adequately addresses the various concerns expressed by the respective petitioners. E 7.25 It is submitted by Shri Mehta, learned Solicitor General that the packages/reliefs offered by the Central Government/RBI/Lenders are in the realm of policy decisions. It is submitted that a conscious decision has been taken after considering every pros and cons and considering various factors and the priorities in the larger public interest and the economy of the country. It is submitted that as observed and held by this Court in the case of Arun Kumar Agrawal v. Union of India (2013) 7 SCC 1 that the matters relating to economic issues, have always an element of trial and error and so long as a trial and error is bona fide and with best intentions, such decisions cannot be questioned as arbitrary, capricious or illegal. It is submitted that in the aforesaid decision in paragraph 43, this Court has considered the decision of the Supreme Court of the United States in the case of Metropolis Theatre Co. v. Chicago, which took the view that the problems of Government are practical ones and may justify, if they do not require, rough accommodation, illogical, if may be, and unscientific. Mere errors of H Government are not subject to our judicial review. It is only its palpably

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arbitrary exercises which can be declared void. Shri Mehta has heavily relied upon paragraphs 41 to 49 of the aforesaid decision, in which this Court considered various earlier decisions. 7.25.1 Relying upon the decision of this Court in the case of Peerless General Finance and Investment Co. Ltd. v. RBI, (1992) 2 SCC 343, it is submitted that as observed by this Court the function of the Court is to see that lawful authority is not abused but not to appropriate to itself the task entrusted to that authority. It is further observed that the Courts are not to interfere with economic policy which is the function of experts. It is not the function of the courts to sit in judgment over matters of economic policy and it must necessarily be left to the expert bodies. It is submitted that it is further observed that the functions of the C Court are not to advise in matters relating to financial and economic policies for which bodies like RBI are fully competent. It is further observed that the Court can only strike down some or entire directions issued by the RBI in case the Court is satisfied that the directions were wholly unreasonable or violative of any provisions of the Constitution or any statute. He has relied upon paragraphs 31, 37 and 38 of the aforesaid decision. 7.25.2 It is further submitted that in the case of Federation of Railway Officers Association v. Union of India (2003) 4 SCC 289, it is observed that on matters affecting policy and requiring technical expertise the court would leave the matter for decision of those who are qualified to address the issues. 7.25.3 It is further submitted that in the case of Dhampur Sugar (Kashipur) Ltd. v. State of Uttaranchal, (2007) 8 SCC 418, it is observed by this Court that it is well established that courts are ill-equipped to deal with the policy matters. It is further observed that in complex social, economic and commercial matters, decisions have to be taken by governmental authorities keeping in view several factors and it is not possible for courts to consider competing claims and conflicting interests and to conclude which way the balance tilts. It is submitted that it is further observed that the court cannot strike down a policy decision taken by the Government merely because it feels that another policy decision would have been fairer or wiser or more scientific or logical. The court can interfere only if the policy decision is patently arbitrary, discriminatory or mala fide. H

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A 7.25.4 On exercise of judicial review, Shri Mehta, learned Solicitor General has relied upon the following decisions of this Court, Arun Kumar Agrawal (supra); State of M.P. v. Nandlal Jaiswal, (1986) 4 SCC 566; BALCO Employees’ Union (Regd.) v. Union of India, (2002) 2 SCC 333; Peerless General Finance and Investment Co. Ltd. (supra); Dalmia Cement (Bharat) Ltd. v. Union of India (1996) 10 SCC 104; B Villianur Iyarkkai Padukappu Maiyam v., Union of India (2009) 7 SCC 561; Narmada Bachao Andolan v. Union of India, (2000) 10 SCC 664; and R.K. Garg v. Union of India (1981) 4 SCC 675. Reply on behalf of the Reserve Bank of India

8Copy pinpoint8. Shri V. Giri, learned Senior Advocate appearing on behalf of the Reserve Bank of India has made the following submissions: i) that the RBI has been constituted by the provisions of Section 3 of the Reserve Bank of India Act, 1934 (for short, ‘RBI Act’). It has been vested with the responsibility of superintendence and control of the banking business in the country under the provisions of the Banking Regulation Act, 1949 (for short, ‘BR Act’). That in view of the various provisions of the BR Act and the RBI Act, the RBI is obliged to see that the banking business is carried on by banks, prudently and adhering to sound principles of banking. That the BR Act has conferred upon the RBI the powers to issue directions under Section 35A to the banking companies generally or to any banking company in particular, in public interest or in the interest of the Banking Policy or to prevent the affairs of the banking company being conducted in a manner detrimental to the interest of its depositors or in a manner prejudicial to the banking company. Furthermore, under Section 21 of the BR Act, the RBI is conferred with specific powers to determine the policy in relation to advances to be followed by the banking companies; ii) that the Legislature has conferred various powers on RBI empowering it to determine the banking policies to be followed by the banking companies. That the RBI being the regulator of the banking sector, took cognizance of the probable stress caused in the financial situation and conditions of the citizens of this country – the consequent stress upon the economy due to outbreak of Covid-19 pandemic and issued a statement on Development and Regulatory Policies dated 27.03.2020 with the following objective and purpose:

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i) Expanding liquidity in the system sizeably to ensure that financial markets and institutions are able to function normally on the face of COVID-19 related dislocations; ii) Reinforcing monetary transmission so that bank credit flows on easier terms are sustained to those who have been affected by the pandemic; iii) Easing financial stress caused by COVID-19 disruptions by relaxing repayment pressures and improving access to working capital; and iv) Improving the functioning of markets in view of the high volatility experienced with the onset and spread of the pandemic. iii) that with a view to ease the financial stress by relaxing “repayment pressures”, the said Statement on Development and Regulatory Policy provided for moratorium on term loans. That following the aforesaid Statement on Development and Regulatory Policies, a circular was issued titled ‘Covid-19 – Regulatory Package dated 27.03.2020’, thereby providing detailed instructions qua the regulatory measures issued by way of the said Statement. That it provided for rescheduling of payments – term loans and working capital facilities. That the circular dated 27.03.2020 came to be further modified by the E RBI vide Circulars dated 17.4.2020 titled ‘Covid-19 Regulatory Package – Asset Classification and Provisioning’ and 23.5.2020 titled ‘Covid-19 Regulatory Package’ whereby the moratorium period came to be extended by another three months, i.e., from 1.6.2020 to 31.8.2020 on payment of all instalments in respect of term loans; iv) that the aforesaid policies/circulars were issued with the objective of mitigating the burden of debt servicing brought about by disruptions on account of Covid-19 pandemic and to ensure the continuity of viable business. It is submitted that therefore, the regulatory package is, in its essence, in the nature of a moratorium/deferment and cannot be construed to be a waiver. It is submitted that, however, in order to ameliorate the difficulties faced by borrowers in repaying the accumulated interest for the moratorium/deferment period, it was further provided in the circular dated 23.5.2020 that in respect of working capital facilities, lending institutions may, at their discretion, convert the accumulated H

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A interest for the deferment period up to 31.08.2020, into a funded interest term loan which shall be repayable not later than 31.03.2021. Further, in respect of term loans, it has been provided that the repayment schedule for such loans, including interest as well as principal, as also the residual tenor, will be shifted across the board; B v) that the lending institutions are required to frame Board approved policies for providing the reliefs pursuant to circulars issued by the RBI from time to time to all eligible borrowers and disclosed in public domain. Since the customer profile, organizational structure and spread of each lending institution is widely different from others, each lending institution is best placed to assess the requirements of its customers. Therefore, the discretion was left to the lending institutions concerned;

vi) that the banks are commercial entities that intermediate between the depositors and the borrowers and are expected to run on viable commercial considerations. That the banks being custodians of depositors’ money, their actions need to be guided primarily by the protection of depositors’ interests. Any borrowing arrangement is a commercial contract between the lender and the borrower and the interest rates reflect the same. That the interest on advances forms an important source of income for banks and after meeting the cost of funds, the banks also need to sustain reasonable interest margins for viable operations;

vii) that otherwise the RBI being cognizant of the enormity of the challenges faced in the wake of Covid-19 has already announced several measures to mitigate the immediate impact on the real sector as well as financial sector, namely, Circulars dated 27.3.2020, 17.4.2020 and 23.5.2020. It is submitted that the aforesaid circulars/policies were announced with the primary objective of enabling all key constituents in the economy, most importantly the borrowers, to cope with the economic fallout. The overriding objective was to prevent financial markets from freezing up; ensure normal functioning of financial intermediaries; ease the stress faced by households and businesses; and keep the life blood of finance flowing. It is submitted that many measures/policy decisions have been announced by the RBI to mitigate the impact of Covid-19, which are as under:

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1 The purpose of this measure relating to reverse repo rate is to make it relatively unattractive for banks to passively deposit funds with the Reserve Bank and instead, G to use these funds for on-lending to productive sectors of the economy. 2 This measure was announced as financial markets worldwide were facing intense selling pressures on extreme risk aversion due to the spread of COVID-19 infections. 3 This reduction in the CRR released primary liquidity of about Rs,1,37,000 crore uniformly across the banking system in proportion to liabilities of constituents rather than in relation to holdings of excess SLR. H

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4 This comprised Rs.25,000/- crore to NABARD for refinancing regional rural banks (RRBs), cooperative banks and micro finance institutions (MFIs); Rs.15,000/- crore to SIDBI for on-lending/refinancing; and Rs.10,000/- crore to NHB for supporting housing finance companies (HFCs). Advances under this facility were provided at the RBI’s H policy repo rate.

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8.1 Now so far as the prayers for waiver of interest/interest on interest during the moratorium period is concerned, it is submitted that any waiver of interest on interest/compound interest will entail significant economic costs which cannot be absorbed by the banks without serious debt of their financials, which in turn will have huge implications for the depositors and the broader financial stability. It is submitted that, in fact, the government has come out with the “ex-gratia scheme” and the government has to bear the cost of the ‘interest on interest’ for MSME loans and personal loans up to Rs. 2 crores. It is submitted that therefore waiver of interest and/or interest on interest/compound interest shall not be in the larger country’s economy and the bankers.

F 8.2 Now so far as the prayer for extension of moratorium beyond 31.08.2020 is concerned, it is submitted that the moratorium was permitted as a part of immediate regulatory response, aimed at providing temporary reprieve to borrowers affected by the pandemic, while attempting to preserve the resilience of the financial system. It entails significant costs to the lenders and a balance needs to be maintained in the overall G consideration. A long moratorium exceeding six months can also impact credit behaviour of borrowers and increase the risks of delinquencies post resumption of scheduled payments. It may result in vitiating the overall credit discipline which will have a debilitating impact on the process of credit creation in the economy. It will be the small borrowers which may end up bearing the brunt of the impact as their access to formal H

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lending channels is critically dependent on the credit culture. It is submitted that mere continuation of temporary moratorium would not even be in the interest of borrowers. It may not be sufficient in addressing deeper cash flow problems of the borrowers and in fact exacerbate the repayment pressures for the borrowers. Therefore, a more durable solution was needed to rebalance the debt burden of viable borrowers, both businesses as well as individuals, relative to their cash flow generation abilities. It is submitted that with this consideration in mind the Reserve Bank has announced the Resolution Framework for Covid19-related Stress (“Resolution Framework”) on August 6, 2020, which enabled the lenders to implement a resolution plan in respect of personal loans as well as other exposures affected due to Covid19, subject to the prescribed conditions, without asset classification downgrade. The framework, inter alia, permits extension of the moratorium by a maximum of two years. 8.3 It is submitted that the Resolution Framework issued by the Reserve Bank on August 6, 2020 is aimed at facilitating revival of real sector activities and mitigating the impact on the ultimate borrowers, which are under financial stress caused by economic fallout on account of Covid-19 pandemic. It is submitted that in terms of the Resolution Framework, only those borrower accounts shall be eligible for resolution which were classified as standard, but not in default for more than 30 days with any lending institution as on March 1, 2020. E 8.4 It is submitted that the resolution plans implemented under framework may inter alia rescheduling of payments, conversion of any interest accrued, or to be accrued, into another credit facility, or, granting of moratorium, based on an assessment of income streams of the borrower for two years. The reliefs for each borrower can be tailored by banks to meet the specific problem being faced by each borrower depending on need rather than have a broad-brush approach in dealing with the issue. 8.5 It is submitted that in terms of resolution framework, the RBI had constituted an Expert Committee under Shri K.V. Kamath to recommend to the RBI the required financial parameters, along with the sector specific benchmark ranges for such parameters, to be factored into each resolution plan. That terms of the reference of the Kamath Committee read as under:

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A “(a) To identify suitable financial parameters that should be factored into the assumptions underlying RP finalized by the lending institutions under the Resolution Framework. The parameters shall cover aspects related to leverage, liquidity, debt serviceability, etc. B (b) To recommend sector-specific ranges for such financial parameters that will serve as boundary conditions for the RP [Resolution Plan]. (c) To make any other recommendations relating to financial or non-financial conditions to be considered for the RP, C within the contours of the framework announced by the Reserve Bank of India. (d) To undertake the process validations of RP submitted in respect of borrowers where the aggregate exposure of the lending institutions at the time of invocation of the resolution process is Rs.1500 crore and above. The process validation shall entail verification of the RP in terms of their adherence to the conditions prescribed in the Resolution, without interfering with the commercial judgement exercised by the lenders.” It is submitted that the Committee has undertaken an exhaustive task and has given its report dated 4.9.2020. The recommendations of the Kamath Committee have been broadly accepted by RBI vide circular dated 7.9.2020. It is submitted that the Kamath Committee found variable impact of the pandemic across several sectors, with varying degrees of severity and varying nature of problems. It is submitted that the Committee F found that it is neither possible nor desirable to arrive at any one particular formula, whether sector-specific or otherwise, to deal with the stress situation arising from the unprecedented pandemic. It is submitted that the resolution of such stressed accounts shall have to be made only by and between the borrowers and the lending institutions. It is submitted that the Kamath Committee while identifying 26 sectors, laid down parameters that are to be guidance for the lending institutions while undertaking the process of restructuring/resolution. 8.5.1 It is submitted that Kamath Committee based resolution plans are applicable only to big borrowers having big and specific problems requiring resolution/restructuring, and such resolution can be done only after evaluating projections of cash flows and viability, which requires

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banking expertise and knowledge of the finance sector and which can be done only by the lending institutions on a case-by-case basis. 8.5.2 It is submitted that so far as the borrowers which are not big borrowers, their accounts are eligible to be restructured by the respective lending institutions as per RBI circular dated 6.8.2020. It is submitted that the banks are fully empowered to resolve Covid-19 related stress and customize reliefs to individual borrowers through grant of various concessions/reliefs, inter alia, in terms of i) alteration in the rate of interest and haircut on amount payable as interest; (ii) extension of the residual tenor of the loan, with or without moratorium, by up to two years; (iii) waiving penal interest and charges; (iv) rescheduling repayment; (v) converting accumulated interest into a fresh loan with a deferred payment schedule; and (vi) sanction of additional loan. 8.5.3 It is submitted that those accounts which are not covered by Kamath Committee recommendations were not supposed to wait for their restructuring for Kamath Committee Report to come out as the said restructuring is not linked to the parameters to be fixed by the said report. It is submitted that, as such, the RBI resolution framework offers significant and appropriate higher relief to borrowers in the 26 sectors identified as Covid-19 impacted.

9Copy pinpoint9. It is further submitted that the circulars issued by the RBI are policy decisions taken by the RBI in exercise of the statutory powers conferred on the bank under the provisions of the BR Act and RBI Act. It is submitted that the policy decisions taken by the RBI and as expressed in various circulars issued by the RBI in the wake of Covid-19 pandemic, being economic policy matters, are not amenable to judicial review except when a constitutional infraction or violation of fundamental rights are made out. 9.1 It is submitted that the concessions that have been offered across the board by the RBI are offered with the objective to offset the pervasive impact that the Covid-19 pandemic has had on the country. H

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A The circulars granting moratorium for a period of six months on repayment of instalments on all term loans and deferment of interest on working capital facilities; facility for resolution of Covid-19 related stressed assets are all measures taken with the objective of enabling sustainable recovery and facilitating credit flow to the economy, while ensuring financial stability. B 9.2 It is further submitted that as the circulars issued by the RBI are under Covid-19 package and the resolution framework issued by the RBI on 6.8.2020 are the policy decisions, the judicial interference by this Court is not warranted. It is submitted that every regulatory forbearance has its trade-offs in terms of adverse incentives and unintended consequences. It is submitted that the RBI has exercised its expert C wisdom in issuing binding guidelines to lending institutions on how to differentiate the risks arising from borrowers with pre-existing financial difficulties from those which were performing well but had been impacted by the pandemic. RBI has taken a balanced view, taking into account the interest of the depositors, borrowers, real sector entities and banks. D Financial stability and economic growth of the country were also kept in mind while arriving at its policy decisions by the RBI. 9.3 It is submitted that this Court in a number of decisions have held that the courts are not to interfere with the economic policy which is the function of experts. It is not the function of the courts to sit in E judgment over matters of economic policy and it must necessarily be left to the expert bodies. It is submitted that even in such matters even experts can seriously and doubtlessly differ. Courts cannot be expected to decide them without even the aid of experts. In support of his submission, Shri V. Giri, learned Senior Advocate has relied upon the following decisions, Peerless General Finance and Investment Co. Ltd. (supra); Shri F Sitaram Sugar Co. Ltd. V. Union of India (1990) 3 SCC 223; Prag Ice & Oil Mills v. Union of India AIR 1978 SC 1296; and P.T.R. Exports (Madras) P. Ltd. V. Union of India (1996) 5 SCC 268. 9.4 Making the above submissions and relying upon the above decisions, it is vehemently submitted by Shri V. Giri, learned Senior G Advocate appearing on behalf of the RBI that the reliefs sought by the respective petitioners, namely, waiver of interest on interest/compound interest and waiver of interest during the moratorium period; moratorium to be permitted for all accounts instead of being at the discretion of the lenders; extension of moratorium beyond 31.08.2020; packages/reliefs shall be sector-wise’ discretion to come under the resolution framework

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of 6.8.2020 circulars should lie with the borrowers and not with the lenders, the respective petitioners are not entitled to the said reliefs. 9.5 Now so far as the prayer in one of the petitions sought in Writ Petition (Civil) No. 955 of 2020 directing the RBI to apply circular dated 27.3.2020 to all banks, non-banking financial companies, housing finance companies and other financial institutions compulsorily and mandatorily, it is submitted that the circular dated 27.3.2020 shall be applicable to all loan accounts of all banks, non-banking financial companies, housing finance companies and other financial institutions, subject to fulfilling the eligibility criteria. Submissions made by Shri Harish Salve, learned Senior C Advocate

10Copy pinpoint10. Shri Harish Salve, learned Senior Advocate appearing on behalf of the Indian Banks Association, while opposing the present petitions, has vehemently submitted that the judicial review of the policy decisions, more particularly in the field of economy, would be on very narrow grounds. It is submitted that the government packages cannot be set aside on the ground of violation of Article 14 of the Constitution of India. It is true that it is the duty of the government to bring back the economy on track. It is submitted that however therefore when a conscious decision has been taken by the NDMA/UOI through various ministries, RBI and the lenders, there may be various options/reliefs which may be available, however ultimately, it is for the policy maker to take appropriate decisions/ frame appropriate policies after having the expert opinion. It is submitted that once a conscious decision of various reliefs has been taken, unless it is arbitrary and merely because some sectors are not agreeable, it cannot be set aside. It is submitted that while announcing various packages/reliefs, each and every aspect has been considered from all angle. 10.1 It is submitted that the resolution regarding restructuring of debts is to be considered by the lenders and not by the borrowers. He has also relied upon catena of decisions of this Court on judicial review of the policy decisions, relied upon by Shri Tushar Mehta, learned Solicitor General, referred to hereinabove. 10.2 It is submitted that, as such, various reliefs/measures have been announced by the RBI. The RBI announced a moratorium on the repayment of term loans, initially for a period of three months and further H

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A extended by another three months, which came to an end on 31.08.2020. The avowed object of allowing such a moratorium was to ease the financial stress that was being faced by borrowers “by relaxing repayment pressures and improving access to working capital”. Such measures would benefit those whose business was otherwise sound but became victims of the economic meltdown caused by the pandemic. In the case of individual borrowers having personal accounts, an entirely different approach was called for and this was finally addressed by the government in the package announced by it. It is submitted that on 6.8.2020 the RBI announced “Resolution Framework for Covid-19 related stress” thereby permitting banks to restructure loans of eligible borrowers. This was meticulously complied with by the banks by putting in place Board approved policies to grant relief to the borrowers. 10.3 It is submitted that the RBI constituted a Committee, known as Kamath Committee and Kamath Committee made its recommendations. It is submitted that Kamath Committee recommendations were the next step on addressing the economic problems being faced by businesses in India. It is submitted that in a number of cases the accounts had become irregular although not declared as NPA during this period and therefore it has become necessary to restructure these loans. It is submitted that there cannot be a single formula applied to all loans and to different sectors. The Kamath Committee therefore evolved norms which relaxed the existing norms on which restructuring of loans were to be affected. It is submitted that for the purposes of restructuring alone, the fundamental premise was that the business is viable and capable of servicing its debt obligations upon restructuring. It is for this purpose that different norms were prescribed for assessing the inherent financial strength of a business. It is submitted that all the directions of the RBI have been fully complied with by the banks in letter and spirit and relief has been granted to the borrowers.

G 10.4 It is further submitted that the Central Government has announced various schemes/packages and the same have been implemented by the banks and have duly granted relief to all the eligible borrowers in terms of the said schemes/packages. 10.5 Now so far as the reliance placed upon Section 13 of the DMA 2005 is concerned, it is vehemently submitted by Shri Salve, learned H

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Senior Advocate that in section 13 the word used is “may”. It is submitted that the Government has to balance each sector and Section 13 of the Act uses the words “persons affected”. It is submitted that different persons/sectors have impact differently and therefore keeping in mind the different impact on different persons/sectors, the Central Government through its various ministries, RBI and the banks have provided different packages/reliefs. 10.6 It is submitted that, as such, as pointed out by Shri Mehta, learned Solicitor General, a conscious decision has been taken by the NDMA. It is submitted that under the DMA, prevention and mitigation shall be within the statutory framework. C It is submitted that the architecture of the DMA 2005 is clearly a structure of enabling powers to be exercised concurrently with the executive powers of the Government and other statutory powers available to the Governments at the Union, State and District levels. It is submitted that therefore there is no question of there being a power coupled with a duty – overall duties of each of the statutory functionaries are set out in the various provisions and enabling provisions are made to give relief as may become necessary. It is submitted that there may be a pandemic or a natural disaster which may not have that degree of economic fallout. It is submitted that to suggest that the moment there is a disaster, there is a duty cast upon the NDMA to afford relief from payment of interest would lead to absurd consequences. It is submitted that there is no power conferred under the Act by which the amount due by a private entity to another private entity can be written off or restructured. The relief under Section 13 can be granted where interest is payable to the Government or by reimbursing the interest payable to a private entity. 10.7 Now so far as the relief sought of waiver of interest, it is submitted that IBA has 203 member banks including public sector banks, private sector banks, foreign banks and other banks including co-operative banks and regional rural banks. It is submitted that even on the occurrence of other calamities like cyclone, earthquake, drought or flood, banks do not waive interest but provide necessary relief packages to the borrowers. A waiver can only be granted by the Government out of the exchequer. It cannot come out of a system from banks, where credit created out of H

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A the depositor’s funds alone. Any waiver will create a shortfall and a mismatch between the Bank’s assets and liabilities. It is submitted that the banks have to keep up with their interest payment obligations to the depositors who are paid compound interest with quarterly rests on FDRs. The waiver of interest obligations would B impair the financial structure of the banks and unleash a greater economic danger than what has been caused by the pandemic. It is submitted that the resolution framework put in place by the RBI on 6.8.2020 sets out sectoral parameters and thereby recognizes the difference between the different sectors for restructuring of loans. C 10.8 It is submitted therefore that the policy decisions taken by the respective banks/lenders considering the recommendations made by the Kamath Committee and as per the policies/packages offered by the government may take care of the interest of the different sectors for restructuring of loans and the same are in the larger interest of the D economy of the country. It is therefore prayed to dismiss all these petitions.

11Copy pinpoint11. Shri Mukul Rohatgi, learned Senior Advocate appearing on behalf of the State Bank of India has pointed out the resolution/policy dated 1.9.2020 approved by the Board of Directors of the State Bank of E India has been framed after considering the recommendations of the Kamath Committee. He has also reiterated on judicial review of the economic policy decisions; adverse effect on the banking system if the prayer of waiver of interest/penal interest is accepted and on interpretation of various provisions of DMA 2005.

12Copy pinpoint12. 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: i) a complete waiver of interest or interest on interest during the G moratorium period; ii) there shall be sector-wise relief packages to be offered by the Union of India and/or the RBI and/or the Lenders; iii) moratorium to be permitted for all accounts instead of being at the discretion of the Lenders; H

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iv) extension of moratorium beyond 31.08.2020; A 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; vi) the last date for invocation of the resolution mechanism, namely, B 31.12.2020 provided under the 6.8.2020 circular should be extended.

13Copy pinpoint13. While considering the aforesaid submissions/reliefs sought, the scope of judicial review on the policy decisions in the field of economy and/or economic policy decisions and/or the policy decisions having financial implications which affects the economy of the country are C required to be considered.

14Copy pinpoint14. 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: D i) The Court will not debate academic matters or concern itself with intricacies of trade and commerce; ii) It is neither within the domain of the courts nor the scope of judicial review to embark 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 amenable to judicial review; iii) Economic and fiscal regulatory measures are a field where Judges should encroach upon very warily as Judges are not experts in these matters. 14.1 In R.K. Garg (supra), it has been observed and held that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. It is further observed that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait-jacket formula and this particularly true in case of legislation dealing with economic matters. H

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A 14.2 In the case of Arun Kumar Agrawal (supra), this Court had an occasion to consider the following observations made the Supreme Court of the United States in the case of Metropolis Theatre Co. v. Chicago, 57 L Ed 730: 228 US 61 (1913): “…The problems of Government are practical ones and may B justify, if they do not require, rough accommodation, illogical, if may be, and unscientific. But even such criticism should not be hastily expressed. What is the best is not always discernible; the wisdom of any choice may be disputed or condemned. Mere errors of Government are not subject to our judicial review. It is only its palpably arbitrary exercises which can be declared void…” C 14.3 This Court in the case of Nandlal Jaiswal (supra) has observed that the Government, as laid down in Permian Basin Area Rate Cases, 20 L Ed (2d) 312, is entitled to make pragmatic adjustments which may be called for by particular circumstances. The court cannot strike down a policy decision taken by the State Government merely because it feels that another policy decision would have been fairer or wiser or more scientific or logical. The court can interfere only if the policy decision is patently arbitrary, discriminatory or mala fide. 14.4 In the case of BALCO Employees’ Union (Regd.) (supra), this Court has observed that Wisdom and advisability of economic policies are ordinarily not amenable to judicial review unless it can be demonstrated that the policy is contrary to any statutory provision or the Constitution. In other words, it is not for the courts to consider relative merits of different economic policies and consider whether a wiser or better one can be evolved. F It is further observed that in the case of a policy decision on economic matters, the courts should be very circumspect in conducting an enquiry or investigation and must be more reluctant to impugn the judgment of the experts who may have arrived at a conclusion unless the court is satisfied that there is illegality in the decision itself. G 14.5 In the case of Peerless General Finance and Investment Co. Ltd. (supra), it is observed and held by this Court that the function of the Court is to see that lawful authority is not abused but not to appropriate to itself the task entrusted to that authority. It is further observed that a public body invested with statutory powers must take H

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care not to exceed or abuse its power. It must keep within the limits of the authority committed to it. It must act in good faith and it must act reasonably. Courts are not to interfere with economic policy which is the function of experts. It is not the function of the courts to sit in judgment over matters of economic policy and it must necessarily be left to the expert bodies. In such matters even experts can seriously and doubtlessly differ. Courts cannot be expected to decide them without even the aid of experts. It is further observed that it is not the function of the Court to amend and lay down some other directions. The function of the court is not to advise in matters relating to financial and economic policies for which bodies like RBI are fully competent. The court can only strike down some or entire directions issued by the RBI in case the court is satisfied that the directions were wholly unreasonable or in violative of any provisions of the Constitution or any statute. It would be hazardous and risky for the courts to tread an unknown path and should leave such task to the expert bodies. This Court has repeatedly said that matters of economic policy ought to be left to the government. 14.6 In the case of Narmada Bachao Andolan (supra), in paras 229 & 233, it is observed and held as under: “229. It is now well settled that the courts, in the exercise of their jurisdiction, will not transgress into the field of policy decision. Whether to have an infrastructural project or not and what is the type of project to be undertaken and how it has to be executed, are part of policy-making process and the courts are ill-equipped to adjudicate on a policy decision so undertaken. The court, no doubt, has a duty to see that in the undertaking of a decision, no law is violated and people’s fundamental rights are not transgressed upon except to the extent permissible under the Constitution.

233. At the same time, in exercise of its enormous power the court should not be called upon to or undertake governmental duties or functions. The courts cannot run the Government nor can the administration indulge in abuse or non-use of power and get away with it. The essence of judicial review is a constitutional fundamental. The role of the higher judiciary under the Constitution casts on it a great obligation as the sentinel to defend the values of the Constitution and the rights of Indians. The courts must, H

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A therefore, act within their judicial permissible limitations to uphold the rule of law and harness their power in public interest. It is precisely for this reason that it has been consistently held by this Court that in matters of policy the court will not interfere. When there is a valid law requiring the Government to act in a particular manner the court ought not to, without striking down the law, give B any direction which is not in accordance with law. In other words, the court itself is not above the law.” 14.7 In Prag Ice & Oil Mills (supra), this Court observed as under: C “We do not think that it is the function of the Court to set in judgment over such matters of economic policy as must necessarily be left to the government of the day to decide. Many of them are matters of prediction of ultimate results on which even experts can seriously err and doubtlessly differ. Courts can certainly not be expected to decide them without even the aid of experts.” D 14.8 In P.T.R Exports (Madras) P. Ltd. (supra), this Court observed as under: “In matters of economic policy, it is settled law that the Court gives a large leeway to the executive and the legislature- E Government would take diverse factors for formulating the policy in the overall larger interest of the economy of the country-The Court therefore would prefer to allow free play to the Government to evolve fiscal policy in the public interest and to act upon the same.”

15Copy pinpoint15. What is best in the national economy and in what manner and to what extent the financial reliefs/packages be formulated, offered and implemented is ultimately to be decided by the Government and RBI on the aid and advise of the experts. The same is a matter for decision exclusively within the province of the Central Government. Such matters G do not ordinarily attract the power of judicial review. Merely because some class/sector may not be agreeable and/or satisfied with such packages/policy decisions, the courts, in exercise of the power of judicial review, do not ordinarily interfere with the policy decisions, unless such policy could be faulted on the ground of mala fide, arbitrariness, unfairness etc. H

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16Copy pinpoint16. There are matters regarding which Judges and the Lawyers A of the courts can hardly be expected to have much knowledge by reasons of their training and expertise. Economic and fiscal regulatory measures are a field where Judges should encroach upon very warily as Judges are not experts in these matters.

17Copy pinpoint17. The correctness of the reasons which prompted the government in decision taking one course of action instead of another is not a matter of concern in judicial review and the court is not the appropriate forum for such investigation. The policy decision must be left to the government as it alone can adopt which policy should be adopted after considering of the points from different angles. In assessing the propriety of the decision of the Government the court cannot interfere even if a second view is possible from that of the government.

18Copy pinpoint18. Legality of the policy, and not the wisdom or soundness of the policy, is the subject of judicial review. The scope of judicial review of the governmental policy is now well defined. The courts do not and cannot act as an appellate authority examining the correctness, stability and appropriateness of a policy, nor are the courts advisers to the executives on matters of policy which the executives are entitled to formulate.

19Copy pinpoint19. Government has to decide its own priorities and relief to the different sectors. It cannot be disputed that pandemic affected the entire country and barring few of the sectors. However, at the same time, the Government is required to take various measures in different fields/sectors like public health, employment, providing food and shelter to the common people/migrants, transportation of migrants etc. and therefore, as such, the government has announced various financial packages/reliefs. Even F the government also suffered due to lockdown, due to unprecedented covid-19 pandemic and also even lost the revenue in the form of GST. Still, the Government seems to have come out with various reliefs/ packages. Government has its own financial constraints. Therefore, as such, no writ of mandamus can be issued directing the Government/ G RBI to announce/declare particular relief packages and/or to declare a particular policy, more particularly when many complex issues will arise in the field of economy and what will be the overall effect on the economy of the country for which the courts do not have any expertise and which shall be left to the Government and the RBI to announce the relief packages/economic policy in the form of reliefs on the basis H

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A of the advice of the experts. Therefore, no writ of mandamus can be issued.

20Copy pinpoint20. No State or country can have unlimited resources to spend on any of its projects. That is why it only announces the financial reliefs/ packages to the extent it is feasible. The court would not interfere with any opinion formed by the Government if it is based on the relevant facts and circumstances or based on expert advice. It is not normally within the domain of any court to weigh the pros and cons of the policy or to scrutinize it and test the degree of its beneficial or equitable disposition for the purpose of varying, modifying or annulling it, based on howsoever sound and good reasoning, only where it is arbitrary and violative of any Constitutional, statutory or any other provisions of law. When Government forms its policy, it is based on a number of circumstances on facts, law including constraints based on its resources. It is also based on expert opinion. It would be dangerous if court is asked to test the utility, beneficial effect of the policy or its appraisal based on facts set out on affidavits.

21Copy pinpoint21. No right could be absolute in a welfare State. Man is a social animal. He cannot live without the cooperation of a large number of persons. Every article one uses is the contribution of many. Hence every individual right has to give way to the right of the public at large. Not E every fundamental right under Part III of the Constitution is absolute and it is to be within permissible reasonable restriction. This principal equally applies when there is any constraint on the health budget on account of financial stringencies. It is the cardinal principle that it is not within the legitimate domain F of the court to determine whether a particular policy decision can be served better by adopting any policy different from what has been laid down and to strike down as unreasonable merely on the ground that the policy enunciated does not meet with the approval of the court in regard to its efficaciousness for implementation of the object and purpose of such policy decision. G

22Copy pinpoint22. With the limited scope of judicial review on the policy decisions affecting the economy and/or it might have financial implications on the economy of the country, the reliefs and submissions stated hereinabove are required to be considered. Whether there shall be a waiver of interest during the moratorium period or whether there shall be sector-wise relief H

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packages and/or RBI should have issued directions which are sector specific and addressing such sector specific issues and/or whether the moratorium period should be extended beyond 31.08.2020 or the last date for invocation of the resolution mechanism, namely, 31.12.2020 provided in the 6.8.2020 circular should be extended are all in the realm of the policy decisions. Not only that, if such reliefs are granted, it would seriously affect the banking sectors and it would have far reaching financial implications on the economy of the country.

23Copy pinpoint23. Now so far as the relief sought of waiver of interest during the moratorium period is concerned, it is required to be noted that the bankers/lenders have to pay the interest to the depositors and their liability to pay the interest on the deposits continue even during the moratorium period. There shall be administrative expenses also required to be borne by the bankers/lenders. Continue payment of interest to depositors is not only one of the most essential banking activities but it shall be a huge responsibility owed by the banks to crores and crores of small depositors, pensioners etc. surviving on the interest from their deposits. There may be several welfare funds schemes, category specific and sector specific which might be surviving and are implemented on the strength of the interest generated from their deposits. All such welfare funds would depend on the income generated from their deposits for the survival of their members. Therefore, to grant such a relief of total waiver of interest during the moratorium period would have a far-reaching financial implication in the economy of the country as well as the lenders/banks. Therefore, when a conscious decision has been taken not to waive the interest during the moratorium period and a policy decision has been taken to give relief to the borrowers by deferring the payment of installments and so many other reliefs are offered by the RBI and thereafter by the bankers independently considering the Report submitted by Kamath Committee consisting of experts, the interference of the court is not called for.

24Copy pinpoint24. Now so far as the submission on behalf of the petitioners that the RBI should have issued directions which are sector specific and addressing such sector specific issues is concerned, at the outset, it is required to be noted that as such the Committee headed by Shri K.V. Kamath had gone into such sector specific issues and gave its recommendations. The recommendations of the Kamath Committee have been substantially accepted by the RBI in its circular dated 7.9.2020 H

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A which provides for separate threshold for 26 sectors including power, real estate and construction. Even otherwise, it is required to be noted that every sector might have suffered differently and therefore it will not be possible to provide sector specific/sector-wise reliefs. The petitioners cannot pray for sector specific relief by either waiver of interest or restructuring by way of present proceedings under Article 32 of the B Constitution of India and the question of such financial stress management measures requires examination and consideration of several financial parameters and its impact.

25Copy pinpoint25. Now so far as the submission on behalf of the petitioners that as per the notifications/circulars/reliefs offered by the RBI and/or C Finance Department of the Union of India ultimately it is left to the bankers and it should not have been left to the bankers and the Government/RBI must intervene and provide further reliefs is concerned, at the outset, it is required to be noted that as such the bankers are commercial entities and since the customer profile, organizational structure and spread of each lending institution is widely different from others, each lending institution is best placed to assess the requirements of its customers and therefore, the discretion was left to the lending institutions concerned. Any borrowing arrangement is a commercial contract between the lender and the borrower. RBI and/or the Union of India can provide for broad guidelines while recommending to give the reliefs.

26Copy pinpoint26. Now so far as the submission on behalf of the petitioners that the relief packages which are offered by the UOI/RBI/Bankers/Lenders are not sufficient and some better and/or more reliefs should be offered is concerned, it is not within the judicial scope of the courts to issue such directions. No mandamus can be issued to grant some more reliefs/ packages. As observed hereinabove, the court cannot interfere with the economic policy decisions on the ground that either they are not sufficient or efficacious and/or some more reliefs should have been granted. The Government might have their own priorities and the Government has to spend in various fields and in the present case like health, medicine, providing food etc. Even as per the case of the Union of India and so stated in the counter filed on behalf of the Union of India and the RBI, so many policies have been announced to mitigate the impact of Covid- 19 pandemic, which are referred to hereinabove.

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As can be seen that as such the Central Government has already given various reliefs and by providing various reliefs, they have already expanded huge financial burden. It is required to be noted that pandemic has caused stress to large and small businesses and the individuals who have lost jobs and livelihoods. By and large, everybody has suffered due to lockdown due to Covid-19 pandemic. Even the Government has also suffered due to non-recovery of GST. From the counter filed on behalf of the Central Government, it appears that the Government has announced and offered ‘Garib Kalyan Package’ and ‘Aatma Nirbhar Package’. The ‘Garib Kalyan Package’ was for Rs.1.70 lakh crores, involving free food grains, pulses, gas cylinders and cash payment to women, poor senior citizens and farmers. It is reported that more than C 42 crore poor people received financial assistance of Rs. 65,454 crores under the said package. The Government has also come out with ‘Aatma Nirbhar Package’ which was for Rs. 20 lakh crores, involving support to MSMEs, Non-Banking Finance Companies, agriculture, sectors allied to agriculture, contractors, street vendors, State Governments, relief in provident fund contribution, extension of subsidy on home loans etc. Therefore, it cannot be said that the Central Government and/or the RBI have not done anything and/or have not offered any reliefs whatsoever. While offering the financial relief packages, the financial constraint and/or financial burden on the government is also required to be considered and borne in mind, which can be considered by the experts and the government and the courts have not expertise to assess the financial burden. From the various steps/measures/policy decisions/packages declared by the Union of India/RBI and the bankers, it cannot be said that the UOI and/or the RBI have not at all addressed the issues related to the impact of Covid-19 on the borrowers. As such, none of the petitioners have specifically challenged the various circulars/policy decisions taken by the UOI/RBI. From the submissions made by the learned counsel appearing for the respective parties, it appears that the borrowers want something more than the reliefs announced. Merely, G since the reliefs announced by the UOI/RBI ither may not be suiting the desires of the borrowers, the reliefs/policy decisions related to Covid-19 cannot be said to be arbitrary and/or violative of Article 14 of the Constitution of India. It cannot be said that any of the fundamental rights guaranteed under the Constitution are infringed and/or violated. Economic decisions are required to be taken keeping the larger economic scenario in mind. H

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27Copy pinpoint27. 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 06.08.2020 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 B for Covid-19 related stressed assets. Therefore, sufficient time was given to invoke the resolution mechanism. Therefore, the petitioners shall not be entitled to any reliefs, namely, (i) total waiver of interest during the moratorium period; C (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; D and (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 E 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/ F interest on interest/compound interest during the moratorium period is concerned, it stands on different footing which shall be dealt with hereinbelow.

28Copy pinpoint28. Now so far as the submission of Shri Sibbal, learned Senior Advocate that there is no “National Plan” drawn up for the disaster G management due to Covid-19 pandemic and that NDMA has not performed its duty under the DMA 2005 is concerned, to appreciate the above, the relevant provisions of DMA 2005 are required to be referred to and considered. Section 3 of the Act provides for establishment of National H Disaster Management Authority which shall consist of the Prime

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Minister of India, who shall be the Chairperson of the National Disaster A Management Authority and other members not exceeding nine, to be nominated by the Chairperson of the National Authority. Powers and functions of the National Authority are provided under Section 6, which reads as under: “6. Powers and functions of National Authority.—(1) Subject to the provisions of this Act, the National Authority shall have the responsibility for laying down the policies, plans and guidelines for disaster management for ensuring timely and effective response to disaster. (2) Without prejudice to generality of the provisions contained in sub-section (1), the National Authority may — (a) lay down policies on disaster management; (b) approve the National Plan; (c) approve plans prepared by the Ministries or Departments of the Government of India in accordance with the National Plan; (d) lay down guidelines to be followed by the State Authorities in drawing up the State Plan; (e) lay down guidelines to be followed by the different Ministries E or Departments of the Government of India for the purpose of integrating the measures for prevention of disaster or the mitigation of its effects in their development plans and projects; (f) coordinate the enforcement and implementation of the policy and plan for disaster management; F (g) recommend provision of funds for the purpose of mitigation; (h) provide such support to other countries affected by major disasters as may be determined by the Central Government; (i) take such other measures for the prevention of disaster, or the G mitigation, or preparedness and capacity building for dealing with the threatening disaster situation or disaster as it may consider necessary; (j) lay down broad policies and guidelines for the functioning of the National Institute of Disaster Management. H

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A (3) The Chairperson of the National Authority shall, in the case of emergency, have power to exercise all or any of the powers of the National Authority but exercise of such powers shall be subject to ex post facto ratification by the National Authority.” Section 7 provides for constitution of Advisory Committee by B National Authority, which shall consist of experts in the field of disaster management and having practical experience of disaster management at the national, State or district level to make recommendations on different aspects of disaster management. Then comes constitution of National Executive Committee as per section 8 of the Act, to assist the National Authority in the performance of its functions under the Act. C The National Executive Committee shall consist of the Secretary to the Government of India, in charge of the Ministry or Department of the Central Government having administrative control of the disaster management, who shall be the Chairperson, ex officio, and the Secretaries to the Government of India in the Ministries or Departments having administrative control of the agriculture, atomic etc., as mentioned in Section 8(2)(b) of the Act. As per Section 9 of the Act, the National Executive Committee, as and when it considers necessary, constitute one or more sub-committees for the efficient discharge of its functions. The powers and functions of the National Executive Committee are as per Section 10 of the Act, and more particularly (a) to act as the coordinating and monitoring body for disaster management…. (b) coordinate and monitor the implementation of the National policy; (c) monitor the implementation of the National Plan and the plans prepared by the Ministries or Departments of the Government of India; (d) monitor the implementation of the guidelines laid down by the National Authority F for integrating of measures for prevention of disasters and mitigation by the Ministries or Departments in their development plans and projects; (e) monitor, coordinate and give directions regarding the mitigation and preparedness measures to be taken by different Ministries or Departments and agencies of the Government; (f) lay down guidelines for, or give directions to, the concerned Ministries or Departments of the G Government of India, the State Governments and the State Authorities regarding measures to be taken by them in response to any threatening disaster situation or disaster; (g) advise, assist and coordinate the activities of the Ministries or Departments….engaged in disaster management. Section 11 of the Act provides for preparation/drawing up a Plan called H

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the “National Plan” for disaster management for the whole of the country. A The National Plan shall include- (a) measures to be taken for the prevention of disasters, or the mitigation of their effects; (b) measures to be taken for the integration of mitigation measures in the development plans; B (c) measures to be taken for preparedness and capacity building to effectively respond to any threatening disaster situations or disaster; (d) roles and responsibilities of different Ministries or Departments of the Government of India in respect of measures specified in clauses (a), (b) and (c). C Section 12 of the Act provides for issuance of guidelines by the National Authority for minimum standards of relief. Section 13 of the Act provides for relief in repayment of loan etc., which shall be dealt with hereinbelow at an appropriate stage. Section 14 of the Act provides for establishment of State Disaster Management Authority. Similar D provisions like National Disaster Management Authority are made with respect to State Disaster Management Authority. Section 33 provides for State Disaster Management Plan. Similar provisions are made with respect to District Disaster Management Authority and the District Plan. Section 35 of the Act provides for measures to be taken by the Central Government for disaster management. Section 35 reads as under: E “35. Central Government to take measures.—(1) Subject to the provisions of this Act, the Central Government shall take all such measures as it deems necessary or expedient for the purpose of disaster management. (2) In particular and without prejudice to the generality of the provisions of sub-section (1), the measures which the Central Government may take under that sub-section include measures with respect to all or any of the following matters, namely:— (a) coordination of actions of the Ministries or Departments of the Government of India, State Governments, National Authority, G State Authorities, governmental and non-governmental organizations in relation to disaster management;