The Kerala High Court building
| Photo Credit: R.K. Nithin
A Division Bench of the Kerala High Court on Wednesday (March 26, 2025) expressed its opposition to the recommendation of the State-level bankers’ committee for moratorium and restructuring of loans taken by the survivors of the Wayanad landslides.
When the suo motu case initiated in connection with the landslides came up for hearing, the Bench comprising Justice A.K. Jayasankaran Nambiar and Justice Eswaran S. orally observed that the recommendation was “not at all satisfying”, adding that “it is not fair on the part of the bankers’ committee to act like this. We cannot agree to it”.
During the hearing, A.R.L. Sundaresan, Additional Solicitor General appearing for the Centre, informed the bench that during a meeting called by the Centre, the proposal regarding moratorium and restructuring of loans submitted by the bankers’ committee had been approved subject to the RBI guidelines.
He further submitted that the meeting was attended by all stakeholders, including the Chief Minister, and it was “a unanimous decision.”
He submitted that as per the committee’s proposal, there would be a one-year moratorium on loans of survivors, and the arrears of the principal amount and its interest would be considered as a fresh loan and the survivors would be given time for making repayment of the fresh loan. It was the same proposal that was adopted during the COVID-19 period. No write-off of loans was considered by the committee. In fact, the Centre had not considered what further action it had to take on the proposal and that it had only taken note of the proposal.
The court then said the Centre had to “independently apply its mind” as to whether the write-off of loans was required under the circumstances. The Centre cannot “cite antecedents of unreasonableness to justify its subsequent order,” it said, adding that “in fact, somebody has to get in touch with the reality of the situation.”
The court pointed out that the Centre had waived agriculture loans during 2018-19. Therefore, “it is not as though the Centre is powerless to take a decision on the waiver of loans”.
Centre told to file affidavit
The court asked the Centre to file an affidavit further clarifying what the proposals of the bankers’ committee were and what decision the Centre had taken on these.
The Additional Solicitor General also submitted that the mentioning of the completion period in respect of rehabilitation projects was “merely an indication” that funds equivalent to 50% of the original allocation of ₹1,059 crore sanctioned by the Centre has to be credited into the account of the respective implementing agencies in the State on or before the extended cut-off date, i.e. December 31, 2025.
The Finance department, which would originally receive the funds, should credit the amounts into the respective departments nominated as the implementing agencies for the various projects with a rider that the funds so credited to their accounts would be used only for the projects specified therein, he added.
Published – March 26, 2025 02:16 pm IST
