'Who are you trying to fool?': High Court slams Centre for refusing to waive loans for Wayanad landslide victims

KOCHI: Coming down heavily on the central government for its stand that there would be no loan waiver for the Wayanad landslide victims, the Kerala High Court on Wednesday orally observed that the Centre has failed the people of Kerala. Enough is enough. We don't need the central governments charity. This is just bureaucratic babble. Its not about whether the central government can act, but whether they are willing to act. If you are unwilling to act, we (the Bench) dare to say it. Who are you trying to fool? remarked the court. In its affidavit, the central government stated that there is no provision for granting loan waivers in cases of natural disasters. A Division Bench comprising Justice A.K. Jayasankaran Nambiar and Justice Jobin Sebastian suo motu impleaded 12 banks in the case, including the State Bank of India, and directed that any recovery action initiated by these banks against the Wayanad landslide victims shall be kept in abeyance until the final disposal of the writ petition. The court also took note of newspaper reports stating that the central government had approved Rs 707 crore for Gujarat and Assam, which were affected by floods and landslides in 2024. One could understand if the Union Executive did not have the funds. Let us hope we dont reach that stage where the Union of India is helpless and in penury, unable to assist any particular State, the court observed. The newspaper report stated that a High-Level Committee had approved Rs 707.97 crore of additional central assistance to the states of Assam and Gujarat, which were affected by floods and landslides during 2024. Neither these floods nor the landslides were classified as severe, and yet Rs 707 crore was allocated to them. It doesnt end there. The same committee also approved Rs 903.67 crore to Haryana, Madhya Pradesh, and Rajasthan under the NDRF for the expansion and modernisation of fire services. If they have the courage, let them say they are not willing to help. But at the very least, the people should know that in times like this, the Union Government has failed the people at least of this State. This is deeply disturbing, the Bench observed. During the hearing, the counsel for the central government submitted that the Ministry of Home Affairs is limited in its involvement with the commercial transactions of banks, as these are regulated by Reserve Bank of India (RBI) guidelines. In response, the court asked: The Union of India has limitations because of an RBI circular? In relation to the Union of India, what is the Reserve Bank? Affidavits filed by bureaucrats often fail to grasp the legal significance of what transpires within Constitutional institutions. We have made it very clearthis is not a case where the Union is powerless to act; it is a matter of whether the Union is willing to act. Through this affidavit, you have again demonstrated that by hiding behind the argument of powerlessness, you are essentially saying that you choose not to act. Why is that being done? The affidavit states that you cannot do this. But that simply reflects an unwillingness to act on the part of the Union of India. If there is an unwillingness to act, then have the courage to say sodont hide behind a supposed lack of power. Anyone who reads the Constitution should be able to see this clearly. Who are you trying to fool? The Bench further observed: Our sense of Constitutional morality requires us to respect the principle of separation of powers, and therefore, we will not issue directions to the Union Government. That is not due to any lack of authority, but because of our magnanimityas a Constitutional body and integral part of the State that respects the Constitution. Enough is enough. We do not need the Unions charity. The court further directed the banks to file affidavits explaining whether they are willing to waive, either wholly or partially, the loans availed by the landslide victims in Wayanad. If they are not willing to do so, the banks must provide a justification with reference to the terms of the loan agreements for seeking repaymentalong with interestduring the pendency of these proceedings. The court noted that, exasperating though the situation may be, its commitment to constitutional morality requires respect for the principle of separation of powers as envisaged under the Constitution. Therefore, it must defer to the Union Governments decisions in matters of economic policy. We therefore refrain from issuing any directions to the Union Government regarding how it should exercise its discretion. However, as an integral part of the 'State' under the Constitution, and as a guardian of the fundamental rights of the people, we cannot remain mute spectators to the Shylockian methods being employed by the concerned banks to recover the loans they have advanced, the Bench observed.