The Kerala High Court has ordered the State Government to prevent any coercive actions against victims of the Wayanad landslides who have defaulted on bank loans. The directive will remain in force until the Central Government reaches a decision on a possible loan waiver.
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"We deem it appropriate to direct that till such time as the decision of the Central Government on the aspect of loan waiver is communicated to this Court, the State Government shall ensure that no coercive steps are taken for recovery of loan amounts from those affected by the landslides." – Kerala High Court
Court’s Stand on Loan Waiver
A Division Bench comprising Justice A. K. Jayasankaran Nambiar and Justice Easwaran S. issued this ruling while hearing a suo motu case initiated by the High Court. This case was started in response to the devastating landslides that struck Wayanad on July 30, 2024. Since then, the Court has been actively overseeing the rehabilitation efforts and ensuring proper support from both the State and Central Governments.
Centre’s Response on Loan Waiver Decision
Advocate ARL Sundaresan, representing the Central Government, informed the Court that the Kerala Chief Minister had already conducted a meeting with the State Level Association of Banks. In this meeting, areas eligible for loan waivers were identified, and the report has been forwarded to the National Level Association of Banks.
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He further added that the Central Government would review this report and make a decision within three weeks after consultation with the National Level Committee.
Concerns Over Rehabilitation Project Deadline
The Kerala High Court also sought clarification regarding the deadline set by the Centre for the completion of rehabilitation projects. The Central Government had sanctioned an interest-free loan of ₹529.50 crore to aid in rehabilitation efforts. However, it required that these funds be fully utilized before March 31.
The Court observed that completing the entire rehabilitation process within this timeframe was unrealistic and questioned whether March 31 was chosen merely because it marks the end of the financial year.
"Completion of the project within the given deadline appears to be an impossibility. The Court seeks clarification on whether the Centre simply requires the funds to be allocated to the project implementing agency before the said date." – Kerala High Court
The matter has been scheduled for a follow-up hearing in two weeks
Case Title: In Re: Prevention And Management Of Natural Disasters In Kerala V State Of Kerala
Case Number: WP(C) 28509/ 2024 & Connected Cases