No Loan Waiver For Wayanad Landslide Victims, Will Grant 1-Year Moratorium And Charge Interest: Says Centre; Kerala HC Expresses Dissatisfaction

The Kerala High Court on Wednesday (26th March) expressed dissatisfaction with the Central government's stand to not waive loans taken by the victims of Wayanad landslide.A division bench comprising Justice AK Jayasankaran Nambiar and Justice Easwaran S. orally observed that the Centre has on many occasions waived loans, and it cannot claim to be powerless when it comes to the affected population of Wayanad.“Who takes into account the plight of the debtors?...You have waived the agricultural loans during 2008-09. So, therefore it is not as though you are powerless on waiver. Suppose, the entire agricultural land is taken away by the landslide...” the judges orally said.The Court was hearing cases related to rehabilitation of landslide-hit Wayanad. It had previously asked the State Level Banking Committee (SLBC) to not take any coercive steps against any landslide victim who has defaulted on bank loans, till the matter of loan waiver is decided by the Central Government.Additional Solicitor General of India ARL Sundaresan today informed the Court that Centre has approved the recommendation of the SLBC to give one year moratorium on the loans taken by the affected persons. He clarified that interest will accrue on these loans during the period of moratorium.As the bench expressed discontent with the decision, the ASGI informed that the decision was taken unanimously in the meeting, in the presence of State's Chief Minister. He further recollected that there was only moratorium and no loan waiver during the calamity caused by COVID-19 pandemic.Unconvinced, Justice Nambiar responded, “Central Government cannot cite an antecedent of unreasonableness to justify a subsequent unreasonableness. Somebody has to get in touch with the reality of situation.”ASGI submitted that the authorities had taken into consideration all kind of loans namely MSME, agricultural loan, housing loan and commercial loans independently and only thereafter decided the benefit to be given.At this juncture, the Court asked the Centre to file an affidavit delineating the proposal made by SLBC, the proposals accepted by the Central Government, and the decision of the Central Government regarding loan waiver.So far as Rs. 529.50 Crore interest free loans sanctioned by the Centre for rehabilitation purposes is concerned, the ASGI informed the Court that the cut-off date for utilisation of those funds has been increased from March 31 to December 31. He further submitted that it will suffice for the State to credit the amount to respective implementing agencies and there is no impediment of the construction is not completed by the cut-off date.The Court has thus ordered the State's Finance Department to credit the money to the respective implementing agencies for each project, with a rider that the funds so credited shall be used only for the project specified therein. The Department shall then issue a utilization certificate to the Centre for the purposes of the scheme.The case is next posted on 9th April.Case Title: In Re: Prevention And Management Of Natural Disasters In Kerala V State Of KeralaCase Number: WP(C) 28509/ 2024 & Connected Cases Click Here To Read/ Download Order

No Loan Waiver For Wayanad Landslide Victims, Will Grant 1-Year Moratorium And Charge Interest: Says Centre; Kerala HC Expresses Dissatisfaction

Manju Elsa Isac

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