Politics ‘cannot negate constitutional guarantee’: Kerala HC raps Centre over ‘unwillingness’ to waive loans for Wayanad victims

Last August, the high court had initiated a suo motu petition following the landslide, by making the state, the Union Governments and their various departments respondents. The court had then urged the Union Government to clarify its stand on loan waiver.

Apart from saying that there is no provision for loan waiver, the MHA, in its affidavit also said banks are independent entities accountable to their shareholders for their commercial decisions, and the finance ministry only provides policy support and oversees administrative matters.

The court said the stand of the Union government that it does not intend to exercise discretion to direct the banks to waive the loan is unfortunate, and that the affidavit demonstrates an unwillingness on the part of the Union Executive to come to the aid of the landslide victims.

“We would have thought that the Union Government 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 severe natural disaster,” it said.

The court said the fundamental right of the landslide victims to a life with dignity is at stake. Asking them to repay loans, is “nothing short of an affront to their dignity which has been recognised as an aspect of their fundamental right to life under Article 21 of the Constitution”.

“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 court said.

The court refrained from issuing directions to the Union Government regarding the manner in which they ought to exercise their discretion, respecting the principle of separation of powers.

However, the judges said: “We cannot remain mute spectators to the Shylockian methods resorted to by the banks to recover the loans. 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”.

Subsequently, the court listed 12 banks as respondents and asked them to keep in abeyance any recovery action against the landslide victims till disposal of the petition. The banks can file counter affidavits in which they have to state whether willing to waive, either wholly or partially, the loans availed by the landslide victims, the court said.

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