The Kerala High Court expressed its strong displeasure on Wednesday regarding the Union government’s hesitation to forgive loans for individuals impacted by the devastating 2024 Wayanad landslides. The court orally observed that the Centre had “failed the people of the State.”
A Division Bench, comprising Justice A.K. Jayasankaran Nambiar and Justice Jobin Sebastian, noted the apparent unwillingness of the Centre to use its authority to instruct banks to waive loan repayments. By choosing not to exercise this power, the court stated, the Union government has effectively abandoned the landslide victims of Wayanad. The judges further declared that they could not stand idly by while banks pursued aggressive recovery tactics for these loans.
Referring to the Union government’s affidavit on the loan waiver issue, the court emphatically rejected the Centre’s claim of being powerless in such a crisis. Article 73 of the Constitution grants the Union extensive executive power to legislate on matters where Parliament can make laws. As the custodian of such significant powers, the Centre should have felt a constitutional obligation to act responsibly and safeguard the fundamental ‘Right to Life’ of natural disaster victims, especially when the disaster itself was classified as “severe” under the Disaster Management Act, 2005.
Discrepancy in Aid to Other States
This inaction is particularly striking, the court highlighted, given that the Union government had previously sanctioned ₹707 crore in additional Central assistance to Assam and Gujarat, both of which were affected by floods and landslides in 2024.
The financial relief requested for Wayanad through a loan waiver represents only a fraction of this amount. This disparity, the court suggested, reveals a clear reluctance on the Centre’s part to support those suffering from the Wayanad tragedy. The federal principles enshrined in the Constitution do not permit discriminatory treatment of citizens based on their state. The court underscored that political considerations should not undermine the constitutional promise of protecting the fundamental rights of citizens in a democratic republic.
Consequently, the court issued several directives to the banks involved, including the immediate suspension of any loan recovery actions against the landslide victims until the final resolution of the writ petition.
Centre’s Stance in Affidavit
In its affidavit, the Centre had argued that while the Reserve Bank of India’s directives on disaster relief offer avenues for addressing grievances and providing aid to affected individuals, they do not include provisions for loan waivers. Furthermore, the Union government asserted that the decision to grant a loan waiver falls outside the administrative purview of the Department of Financial Services within the Ministry of Finance.