Kerala High Court Stays Loan Recovery Proceedings Against Wayanad Landslide Victims

The division bench of Dr. Justice A.K. Jayasankaran Nambiar and Justice Jobin Sebastian issued the interim order after criticising the Central Government for its refusal to consider a waiver of bank loans availed by victims of the Wayanad landslide , calling the Centre's stance “unfortunate” and a “failure” to uphold the victims' right to life and dignity under Article 21.

“What is at stake is the fundamental right of the landslide victims of Wayanad to a life with dignity. Having lost their lands, and their means of livelihood, in the devastating landslide, they are now being called upon to repay the loans availed by them for agricultural and related purposes when the very property that they had offered as collateral security while availing those loans has ceased to exist. This is nothing short of an affront to their dignity which has been recognised as an aspect of their fundamental right to life under Article 21 of the Constitution. By refusing to exercise a power that they have, in a situation that calls for the exercise of that power, we are of the view that the Union Government has virtually failed the landslide victims of Wayanad.” the bench observed.

The bench observed that Article 73 of the Constitution empowers the Union Executive to extend its powers to all matters on which Parliament could legislate, including residual matters including taxation, which is not specified in any of the lists under the seventh schedule.

“As the repository of such vast powers, we would have thought that the Union Government would have considered itself constitutionally obliged to act in a responsible manner to protect the fundamental right to life of the hapless victims of a natural disaster that the Government itself categorised as “Severe” for the purposes of the Disaster Management Act, 2005.” the bench observed

The court also drew attention to a report in The Hindu on Wednesday that the Centre had approved ₹707 crore as additional assistance to Assam and Gujarat for natural calamities in 2024. It noted that the relief sought in the present case is waiver of small agricultural and livelihood loans which was “a fraction” of that amount.

The Court has further stated that party politics cannot negate the constitutional guarantee of protection of the fundamental rights of the people in a democratic republic.

The Court has thus impleaded 12 major banks, including SBI, Bank of Baroda, Canara Bank, Indian Bank, PNB, Union Bank of India, Federal Bank, and Kerala Gramin Bank, as additional respondents and ordered that all recovery proceedings against the Wayanad landslide victims be kept in abeyance until the case is finally decided.

The banks have been directed to file counter affidavits stating whether they are willing to waive the loans wholly or partially, or to justify their recovery efforts in light of the borrowers' losses.

Case Title: In Re: Prevention And Management Of Natural Disasters In Kerala v. State Of Kerala

Case Number: WP(C) 28509/ 2024 & Connected Cases