'Union Govt Has Failed People, We Don't Need Charity': Kerala High Court Remarks On Non-Waiver Of Loans For Wayanad Landslide Victims

The Kerala High Court on Wednesday (October 8) orally remarked that it would pass an interim order to stay the loan recovery action being taken against victims of the Wayanad Landslides. 

During the last hearing, on the issue of loan waiver of victims, the Additional Solicitor General of India, ARL Sundaresan, appearing for the Centre, submitted that there is some ambiguity with regard to the Ministry that has to take a decision on the issue.

At the present hearing, the Advocate General submitted that the Ministry of Home Affairs has come out with an affidavit reiterating the same thing that they cannot waive the loans.

Central Government Counsel submitted that the Regulation in 2018 catered to calamities and for addressing issue of loan waivers. There is limitation for the Ministry to involve in the activities, commercial transaction of banks, which are regulated by the guidelines of RBI.

Upon hearing this, the Court remarked:

"Union of India has limitation by a RBI circular? Vis-a-vis the Union of India, what is the Reserve Bank? Affidavits filed by bureaucrats will not understand the legal significance of what happens in the Constitution...We have made it very clear that it is not a situation where the Union is powerless to act, it is a question of whether the Union is willing to act. By this affidavit, you have clearly shown again hiding behind this power argument, you are saying that we are powerless to act. Why is that being done? There is an affidavit filed saying that you can't do this. Therefore, it is basically an unwillingness to act on the part of the Union of India. Now if it is an unwillingness to act, you must have the courage to say that and not hide behind this veil of lack of power. Anybody who reads the Constitution should understand this, who are you trying to fool?"

The Court had earlier asked the Union government whether the loans of the victims can be waived. It noted that as far as the state-controlled banks were concerned, they had already waived the loans.

Referring to today's newspaper, the Court further remarked:

"One can understand it if the Union Executive does not have the money. Let us hope we don't reach that stage. The Union of India is helpless, is in penury that it cannot assist any particular State. Where is today's newspaper? A High Level Committee has approved 707.97 cr of additional central assistance to the states of Assam and Gujarat, which were affected by floods and landslides during year 2024. Both these floods and landslides were not categorised as severe. And yet you find 707 cr for them. It doesn't end there. Committee also approves 903.67 cr to Haryana, Madhya Pradesh and Rajasthan for expansion, modernisation of fire service...If they have the courage, let them say that they are not willing to help. But at least the people should know that when it comes to moments like this, the Union Government has failed the people, at least of this State."

The Court made it clear that it would not issue directions to the Union Government but would not act as if its hands are tied.

"Having said all this, we can't be behaving like them. Our sense of Constitutional morality requires us to respect in regard the principle of separation of powers and therefore, we will not issue directions to the Union government. That is because of our magnanimity and as body, an integral part of the State which respects the Constitution. Enough is enough. We don't need the Union's charity," it remarked.

It, thereafter, asked for a list of banks and financial institutions controlled by the Union. It also noted that as far as some of the state government-controlled banks are concerned, the loans are waived off. Noting the banks, Bank of Baroda, Canara Bank and some others, the Bench orally observed that it would implead those banks and issue notices to them while staying the recovery action for the time being.

"We will give them opportunity to seek a modification of this interim order after filing a counter-affidavit, where they will say whether or not they will waive or not the entire loan. If they are not going to waive the loan, either entirely or partially, then let them give reasons as to why they are insisting on this despite this calamitous situation," the Court orally added.

The Advocate General submitted that the State can decide on the loans in banks that are not controlled by the Centre. 

Turning to the CGC, the bench orally added: "If this is going to be the stand of the union government, it is going to be a rough ride. This step-motherly attitude will not run. Please let your government also know."

The division bench of Dr. Justice A.K. Jayasankaran Nambiar and Justice Jobin Sebastian was considering the suo-motu case initiated in the aftermath of large-scale landslides that hit Wayanad on July 30, 2024.

The Court has been actively monitoring the rehabilitation activities undertaken by the State and the support offered by the Centre since then.

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

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