Kochi | In a stinging observation, the Kerala High Court on Wednesday said that the Union government has "virtually failed" the victims of the 2024 landslides in Wayanad by not exercising its powers to waive off the loans availed by them.
A bench of justices A K Jayasankaran Nambiar and Jobin Sebastian termed as "unfortunate" and "exasperating" the central government's stand not to waive off the loans of the victims.
It directed that any recovery action by banks against the landslide victims in Wayanad shall be kept in abeyance till the final disposal of the PIL, initiated by the court on its own in the wake of the calamity, aimed at improving disaster prevention and management in Kerala.
The court said it cannot remain a mute spectator to "the Shylockian methods" resorted to by the banks concerned to recover the loans.
The bench said it cannot accept the Centre's stand that it was powerless to act as under Article 73 of the Constitution it has "vast powers".
The court said it thought that the central government, as "the repository of such vast powers", 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, especially when it itself categorised the landslides as 'severe'.
"This is more so when we find from a news report....today (October 8, 2025) that the Union government has approved Rs 707 crore in aid, by way of additional central assistance to the states of Assam and Gujarat which were affected by flood and landslides during 2024."
"The monetary relief sought in the instant proceedings through a loan waiver is merely a fraction of the figures indicated in the news report referred to above," it said.
The bench said that in these circumstances, the submissions made on affidavit by the Centre indicate an "unwillingness" on the part of the union executive to come to the aid of the victims of the Wayanad tragedy.
The court pointed out that the federal principle envisaged under the Constitution "does not allow for a differential treatment" being meted out by the Union government to citizens in any particular state.
"Party politics cannot negate the constitutional guarantee of protection of the fundamental rights of the people in a democratic republic. In the instant case, what is at stake is the fundamental right of the landslide victims of Wayanad to a life with dignity," it said.
The court said that asking the landslide victims to repay the loans they availed for agricultural and related purposes when the property they offered as collateral security has ceased to exist, was "nothing short of an affront to their dignity".
"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 said.
The court said that though the situation was "exasperating", in view of the separation of powers under the Constitution, it was going to defer to the Centre's decision on economic policy.
At the same time, the court said that it cannot remain a mute spectator to "the Shylockian methods resorted to by the banks concerned to recover the loans advanced by them".
"We believe that we can certainly consider the legality of the recovery action initiated by them against the backdrop of the circumstances under which such action is initiated. Fairness in state action being one of the cardinal features of the rule of law that is recognised as a basic feature of the Constitution..."
".. we cannot presently permit the banks and financial institutions concerned to ride roughshod over the fundamental rights of the landslide victims at a time when they are struggling to restore normalcy in their lives." the bench said.
With the observation, it directed impleading 12 banks, including SBI, Canara Bank, Central Bank of India, Punjab National Bank and Bank of Baroda, and ordered that any recovery action initiated by them against Wayanad landslide victims shall be kept in abeyance till the petition is finally disposed of.
The bench said that the banks can seek modification of the instant order by filing affidavits clearly stating whether they are willing to waive, wholly or partially, the loans availed by the landslide victims.
If they are not willing, then the banks have to give a justification for that "with reference to the terms of loan agreements for seeking repayment of loan, together with interest", the court said and listed the matter for further hearing on October 29.
A major landslide struck the Mundakkai and Chooralmala regions on July 30 last year, almost completely decimating both areas.
The disaster claimed over 200 lives, left hundreds injured and 32 persons remain missing.
