Kerala High Court Assails Centre's 'Unwillingness to Act' on Landslide Victim Loan Waivers, Stays Recovery

KOCHI, INDIA – In an extraordinary display of judicial censure, the Kerala High Court on Wednesday delivered a scathing rebuke to the Union Government for its refusal to waive bank loans for the victims of the catastrophic 2024 Wayanad landslides. A division bench, while stopping short of issuing a direct mandamus, accused the Centre of adopting a "step-motherly attitude" and hiding behind "bureaucratic babble" to mask its "unwillingness to act."

The Court announced its intention to pass an interim order staying all loan recovery actions initiated by Union-controlled banks against the landslide survivors, marking a significant judicial intervention in the ongoing rehabilitation efforts.

The division bench, comprising Dr. Justice A.K. Jayasankaran Nambiar and Justice Jobin Sebastian, was hearing a suo motu case it had initiated to monitor the relief and rehabilitation measures following the devastating landslides on July 30, 2024, which claimed hundreds of lives and displaced countless families.

Centre's Stand on Loan Waivers Questioned

The crux of the day's hearing revolved around an affidavit filed by the Ministry of Home Affairs, which reiterated the Centre's inability to waive the loans. The Central Government Counsel argued that its hands were tied by Reserve Bank of India (RBI) guidelines, which limit the Ministry's involvement in the commercial transactions of banks.

This justification was met with fierce opposition from the bench. Justice Nambiar questioned the very premise of the Centre's argument, challenging the notion that the Union of India could be constrained by an RBI circular.

"Union of India has limitation by a RBI circular? Vis-a-vis the Union of India, what is the Reserve Bank?" the Court remarked orally. "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."

The Court characterized the Centre's position as an attempt to feign powerlessness to conceal a lack of political will. "By this affidavit, you have clearly shown again hiding behind this power argument, you are saying that we are powerless to act," the bench stated. "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?"

Allegations of 'Step-Motherly Attitude'

The bench further sharpened its critique by pointing to recent financial aid disbursed by the Union Government to other states for calamities it noted were "not categorised as severe," thereby questioning the Centre's plea of financial or regulatory constraints.

"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," the Court observed, referencing a newspaper report. It also noted the approval of over ₹903 crore for modernizing fire services in other states.

This contrast, the Court suggested, revealed a discriminatory approach towards Kerala. "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," Justice Nambiar declared, later adding, "This step-motherly attitude will not run."

Judicial Restraint Amidst Strong Condemnation

Despite the blistering criticism, the bench underscored its commitment to constitutional principles, specifically the separation of powers. It made clear that it would not overstep its judicial authority by issuing a direct command to the executive branch.

"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," the Court explained. "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."

This calibrated approach—combining harsh oral observations with formal judicial restraint—highlights the delicate balance courts must strike when addressing perceived executive inaction on matters of profound public importance.

Interim Relief and Path Forward

Instead of directing the government, the Court pivoted to a strategy aimed at providing immediate relief to the victims while holding financial institutions accountable. The bench has asked for a comprehensive list of all Union-controlled banks and financial institutions operating in the affected areas, including Bank of Baroda and Canara Bank.

The Court orally stated its intention to implead these banks as parties to the suo motu proceedings and issue notices. Concurrently, it will pass an interim order staying all recovery actions against the landslide victims. This stay will provide a crucial, albeit temporary, reprieve for families grappling with immense loss.

The impleaded banks will be given an opportunity to file counter-affidavits, where they must clarify their stance on waiving the loans, either in full or partially. "If they are not going to waive the loan... then let them give reasons as to why they are insisting on this despite this calamitous situation," the Court added, setting the stage for the next phase of the legal battle.

The case, titled In Re: Prevention And Management Of Natural Disasters In Kerala v. State Of Kerala (WP(C) 28509/ 2024 & Connected Cases), has been posted for further hearing in two weeks, when the response of the banks will be scrutinized. The proceedings stand as a powerful testament to the judiciary's role as a guardian of citizens' rights in the face of natural disasters and alleged administrative apathy.