Kuber vs Corona (COVID-19)

Yakshi at RBI New Delhi

Prevention is our only hope.

Lock-downs are necessary to prevent community transmission of Corona Virus (COVID-19). It is laudable effort of all the governments of this country to impose quick and timely lock-downs. 

Epidemic Diseases Act, 1897  

Epidemic Diseases Act, 1897 authorizes only ‘state governments’ to declare and enforce such lock-downs in the state.  Central government has power to lock down only ports. State of Uttarakhand invoked Section 2 of the Epidemic Diseases Act, 1897 to declare and enforce lock downs in the state for one week even prior to national lock down. It was a ‘informed lock-down’ and in ‘phased manner’ which did not create a panic situation in the state.Above mentioned act doesn’t authorize central government to lock-down the whole country in case of epidemic. 

Disaster Management Act, 2005

On 24^th of March central government acted under Disaster Management Act,2005 (called 2005 Act)  and purportedly passed “guidelines” under Section 6 (2) (i) and Section 10 (2) (1) of the 2005 Act. 

All the orders issued on 24^th March 2020 and declared by the prime minster of India on national television are actually orders passed by the National Disaster Management Authority under 2005 Act. Strictly speaking and if the rule of literal interpretation is applied, even 2005 Act also may not grant any power to issue such ‘orders’, it empowers the National Disaster Management Authority to lay down “policies, plans and guidelines for disaster management and coordinate and enforce the implementation of the policy and plan for disaster management” however calamity of this sort may not warrant literal interpretation today and leaving things to be finally interpreted by the courts of law, if need so arises, let’s see what else National Authority can do to help us immediately.

RBI COVID-19- Regulatory Package may not bring much relief.

RBI has merely ‘permitted the banks’ to grant moratorium of three months on payment of all installments. Boards of lending institutions shall frame and approve policies for such relief. Further RBI has already made it clear that “Interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period”! How is it even disaster relief? When nobody is earning anything then why should bank earn interests? 

Actual relief lies in Section 13 of the Disaster Management Act, 2005

Please invoke Section 13 of the Disaster Management Act, 2005. It is the only statuary relief section in the whole act! Rest all kind of relief actions are dependent on the formation of policy and its implementation.  It authorizes National Authority to recommend relief in repayment of loans or for grant of fresh loans to the persons affected by disaster on such concessional terms as may be appropriate. If national lock-downs can be ordered by National Disaster Management Authority then moratorium on installment along with interest may also be ordered!

Kartikey