Kerala HC Urges Caution on Actions Against Wayanad Landslide Loan Defaulters

Synopsis
Key Takeaways
- Kerala High Court issues directive to prevent aggressive loan recovery from landslide victims.
- SLBC is instructed to halt actions against defaulting borrowers.
- Central government to decide on loan waivers within three weeks.
- Rehabilitation projects funded by a Rs 529.50 crore loan.
- Concerns raised over project completion deadlines.
Kochi, March 3 (NationPress) The Kerala High Court has instructed the Kerala government to ensure that the State Level Bankers' Committee (SLBC) refrains from taking any provocative actions against individuals from Wayanad affected by the landslides who have defaulted on their bank loans, until the issue of loan waivers is resolved by the Central government.
This directive was issued by the Division Bench consisting of Justice A. K. Jayasankaran Nambiar and Justice S. Easwaran during a suo motu hearing related to the extensive landslides that impacted Wayanad on July 30, 2024.
The court, which has been actively overseeing the rehabilitation efforts initiated by the state and the assistance provided by the Centre since the disaster, stated, “It is imperative that no coercive measures are taken for the recovery of loans from those affected by the landslides until the Central government's decision on the loan waiver is conveyed to this Court,”
Additional Solicitor General ARL Sundaresan, representing the Centre, informed the court that the Chief Minister has convened a meeting with the SLBC, which has pinpointed areas eligible for loan waivers. This report will subsequently be submitted to the National Level Association Committee.
Sundaresan further noted that a decision from the Centre will be forthcoming after reviewing the input from the National Level Committee.
He emphasized that this process would be completed within three weeks.
The Court also sought clarification regarding the timeline set by the Centre for the completion of rehabilitation projects.
Currently, the Centre has approved a long-term interest-free loan of Rs 529.50 crore for specific rehabilitation projects for the landslide victims, with a directive that the funds be utilized before March 31.
However, the Court raised concerns regarding the feasibility of completing the projects within this timeframe and questioned whether March 31 was designated as the end of the financial year.
The court then requested Sundaresan to clarify if the Centre only requires the funds to be allocated to the project implementation agency by that date.
The landslide that struck Wayanad on July 30 last year devastated four villages and resulted in 254 fatalities.
Shortly thereafter, Prime Minister Narendra Modi visited the affected regions and assured that the Centre would extend support, urging the state government to submit a comprehensive aid request.