Appearing for gencos, A M Singhvi told a bench of Justices Ashok Bhushan, R S Reddy and M R Shah the Centre and RBI had unfairly left out power generating companies from the purview of loan restructuring. He said unpaid dues of gencos had increased from Rs 75,000 crore in October 2019 to Rs 1.22 lakh crore. Solicitor general Tushar Mehta said fiscal policy falls in the domain of the Union government and the SC should not interfere in such matters.
“These are extraordinary times. Power generating companies have huge arrears due from power distributing companies. They are facing the brunt because discoms are not paying up for the power they have drawn from generating companies and yet the latter is excluded from restructuring of loans,” Singhvi told a bench of Justices Ashok Bhushan, R S Reddy and M R Shah. He said tweaking a few provisions of RBI’s August 6 circular on loan restructuring to provide relief to gencos.
Solicitor general Tushar Mehta read out a host of financial packages announced by the government to provide relief to many sections of industry as well as common people. “Fiscal issues are complex by their very nature. Fiscal policy falls in the exclusive domain of the Union government, which is taking measures periodically after domain experts examine the impact of such decisions on the overall economy and financial climate of the country. There is a mechanism in place for dealing with sector-specific grievances. The SC should not interfere in such matters beyond what has been already announced by the Centre,” he said.
On waiver of compound interest on loans up to Rs 2 crore, the bench asked the SG in a lighter vein, “Will it be prudent to give this relief to people who have availed loans to buy luxury cars worth crores of rupees?” Senior advocate V Giri, appearing for RBI, said the writ petitioners could not keep on expanding their demands for relief during every hearing and there should be an end to the ongoing hearing on debt relief and other pleas made in the writ petitions.
The bench asked the writ petitioners, including the power gencos, to give their suggestions to the Centre and the RBI within two days and asked the government and the banking regulator to give their response.