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Decide on reliefs for hotels hit by pandemic, HC asks Centre, Maharashtra govt

The Bombay high court (HC) in two separate petitions filed by an organisation representing owners of hotels and restaurants has directed the Union finance ministry to respond and consider the request to extend the moratorium for paying loans availed by them in light of the pandemic restrictions which has stalled their businesses
By KAY Dodhiya, Mumbai
PUBLISHED ON MAY 27, 2021 12:35 AM IST

The Bombay high court (HC) in two separate petitions filed by an organisation representing owners of hotels and restaurants has directed the Union finance ministry to respond and consider the request to extend the moratorium for paying loans availed by them in light of the pandemic restrictions which has stalled their businesses.

In the second petition filed by the same organisation seeking waiver of hotel license fees and other statutory charges, the court has asked the state authorities to decide on the representation of the organisation, as the purpose of the fees and charges has not been availed of by the members due to the Covid-19 restrictions.

On May 6, the division bench of justice KK Tated and justice NR Borkar, while hearing the petition filed by United Hospitality Association, which represents owners of hotels and restaurants and is based in Pune, through video conferencing, was informed by advocate Abhay Anturkar and Yatin Malvankar that the hotel industry had abided by the lockdown announced on March 24, 2020, which was extended from time-to-time and had curtailed their businesses.

The advocates submitted that as the business had come to a standstill they were not in a position to pay back the loans availed by them and sought directions to the Union finance ministry to grant relief, in respect of repayment of loans given the Covid-19 pandemic under the Disaster Management Act.

Anturkar further submitted that the association had made representations to the Central government to consider grant of relief in respect of repayment of the loan to the hospitality industry in Pune and Maharashtra and also sought extension in moratorium on loans and a restriction on banks for non-performing assets (NPA) tagging of loans of the hospitality industry in the state.

The association said that it was finding it difficult to repay the loans and taxes and hence in the interest of justice, the respondents be directed to decide on their representation.

The court issued notices to the respondent Union finance ministry and Disaster Management Authority to respond to the petition and also directed the Union Finance Minister to take a decision on petitioner’s representation on its own merits and communicate the same to the organisation and posted the further hearing of the petition to June 18.

The second petition which was heard on May 19, the vacation bench of justice SJ Kathawalla and justice SP Tavade, while hearing the petition of the organisation seeking waiver of license fees for the period that the hotels remained shut due to the pandemic and adjusting the amount already paid towards license fees (FL-III) when the hotels become functional was informed that the hotels had not been able to take benefit of the license fees and other statutory charges already paid.

After hearing the association, the bench directed the commissioner of state excise to hear and decide the representation by the organisation which also sought to treat the commencement date of the license period for FL-III license for the financial year 2021-22 from the time the restrictions imposed on the operations of hotels and restaurants were lifted.

The bench directed the commissioner to hear and dispose of the representation within four weeks and posted further hearing of the petition on June 17.

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