Kerala High Court Expresses Dismay Over Banks Deducting Loan Instalments From Relief Fund Of Wayanad Landslide Victims

The Court was hearing the suo moto case initiated in the aftermath of devastating Wayanad landslides, to prevent and manage natural disasters in Kerala.

The division bench comprising Justice A.K.Jayasankaran Nambiar and Justice Syam Kumar V.M. inquired about the immediate assistance and financial aid given to the victims. It also enquired about the restructuring of loans and about the possibility of writing off loans for victims of landslides in Wayanad.

The State Government Counsel informed that proposals had been submitted to the State Level Bankers Committee to write off all loans for the victims affected by the Wayanad landslide and that these proposals had been approved in principle. It was submitted that the final decision is to be taken by the respective Boards of the Banks.

However, Court orally remarked,

“At the State level, Please give instructions to all the banks, at least of those whom you have some degree of control like cooperative banks…there is a fundamental aspect that we are missing out on….No doubt banks advancing loans can recollect it…. But when there is a fund, money that is given for a particular purpose by a State Government in discharge of its obligation to look after the citizens, that is basically in the nature of a trust. The bank holds it in trust for the beneficiary, it cannot appropriate it towards other dues of the bank.

The Court further emphasized that banks have a fundamental duty in situations like this to show compassion to the victims. “It is a fundamental duty under the Constitution…Banks cannot just act like this….ultimately we are missing out on the humanitarian aspect of the entire thing…we lost our compassion, empathy, everything…”

The Counsel appearing on behalf of the State Government further submitted that the Chief Secretary has been authorized to conduct a consultation with the affected victims of the landslide and experts to understand community needs and assistance required for rehabilitation. It was submitted that the consultation is scheduled to be conducted today. It was also submitted that the State government has requested the State Disaster Management Authority to conduct a post-disaster need assessment in Wayanad.

The Court stated that it proposes to get clarification from the State and Central Government on these aspects:

1. Whether in the wake of natural disasters that have occurred in the State of Kerala, whether they propose to increase the number of subject experts as mandated under the Disaster Management Act?
2. Whether the advisory committee contemplated under the Disaster Management Act have been constituted in various levels and their composition?
3. Details of disaster management plans prepared at national, state and district levels prepared in accordance with the Act.
4. Details of funds allocated, budgetary allocation to carry out these plans.
5. Details regarding steps taken like check lists for safety measures to be incorporated in building rules.

The Court went on to state that it intends to proceed with the issue in three stages. In stage I, the Court stated that it intends to gather scientific data to identify ecologically fragile areas in the State to so as to identify and notify it. In stage II, the Court said that it would gather data for constituting regulatory agencies and advisory boards. It stated that such data will be placed before the government to amend existing statutes or rules. The Court stated that in Stage III, it would collect data from people living in the ecologically sensitive areas for reformulation of policies.

The Court stated that collecting details from people, especially the residents of the ecologically sensitive areas is imperative. The Court stated that people living in ecologically fragile lands are the most affected persons from such disasters and they need to be consulted. It stated that public hearings have to be conducted to get the views of people living in such localities so that State government can reformulate its policies for their benefit.

The Court said, “When it comes to environmental aspects…the people on the ground are first affected, so policy makers cannot ignore their view…you have to have a public consultation at ground level…That is why participatory governance is getting more attention in these areas. “

As such, the Court directed the Central and State Government to file their affidavits. It also directed that individuals with suggestions related to the issues addressed in the Suo Moto case should submit their reports to the Amicus Curiae, who will then present them before the Court.

Case Title: IN RE: PREVENTION AND MANAGEMENT OF NATURAL DISASTERS IN KERALA v STATE OF KERALA

Case Number: WP(C) 28509/ 2024 & Connected Cases 

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