The Kerala High Court ordered an immediate stay on bank recovery proceedings against victims of the Wayanad landslide, pending full hearing and review of institutional justifications for demanding repayments from disaster-affected borrowers.
This suo motu writ was initiated in public interest to secure relief for victims of the Wayanad landslides in Kerala, specifically addressing the loan recovery demands made by banks, even though the victims’ means of repayment and the underlying security had vanished.
After repeated adjournments and requests, the Union Ministry of Home Affairs filed an affidavit rejecting loan waivers on the grounds of RBI norms and economic policy.
The Bench comprising Dr. Justice A.K. Jayasankaran Nambiar and Justice Jobin Sebastian examined recent central aid to other states and pointedly criticized the Union for treating Kerala’s disaster victims differently than those in other states. It also expressed its dismay at the Union’s failure to use its duty under Article 21 and powers under Article 73 to alleviate suffering of those affected. The court recognized the matter as a fundamental rights crisis affecting dignity and fairness post-disaster.
Nonetheless, the bench refrained from issuing a direct order to the Union, citing separation of powers, but made clear its disapproval of rigid, “Shylockian” approaches by banks.
In result, all major banks involved were impleaded and enjoined from pursuing any loan recoveries against the victims during the pendency of this petition. Banks were directed to file affidavits stating whether they are willing to waive loans (fully or partially) or, if not, to justify continued recovery actions.
