KOCHI: The Kerala High Court has directed the Union government and the NDMA to check whether the Disaster Management Act provisions can be invoked for waiving off loans availed by victims of Wayanad landslides.
“Kerala Bank has waived off the loans of the affected persons completely. Considering the nature of the disaster and its categorisation by the Union government as a ‘severe disaster’, one would expect the banks concerned to emulate the example of Kerala Bank and write off the loans availed by the people of the affected area,” said a division bench comprising Justice A K Jayasankaran Nambiar and Justice Easwaran S, while hearing a suo motu case initiated following the landslides.
It asked the Centre and National Disaster Management Authority to deliberate on whether the provision of section 13 of the Act can be invoked to direct banks to waive loans given to the July 30 landslide victims.
Abdication of responsibility by Centre, NDMA, says High Court
The court pointed out that the circulars issued by RBI, including the Master Directions in relation to Scheduled Commercial Banks and Regional Rural Banks, deal only with procedures for rescheduling of existing loans and sanctioning of fresh loans as per the requirement of borrowers. The directions do not deal with waiver or write off of loans since such decisions come under the purview of the individual bank board, it said.
The Centre, in an affidavit, submitted that loans taken by the survivors of the landslides can be rescheduled or restructured in accordance with the RBI’s Master Directions on Natural Calamities. The court noted that “Section 13 of the Disaster Management Act is couched in sufficiently wide phraseology as to empower the NDMA to direct the banks to waive/write off loans”.
It observed that the landslides had been categorised as “severe” by the Centre itself, and yet the NDMA had not chosen to even consider exercising its power under the statutory provision to direct the banks to waive/write off the loans.
“This is nothing but a complete abdication of the responsibility of the Union government and the NDMA. In situations where a majority of the lending banks are seen resorting to shylockian methods for realisation of loans advanced to persons, including those affected by a severe natural disaster, the court would have expected the Centre to live up to its reputation as the chief executive in a welfare state and come to the aid of hapless citizens who have lost their source of livelihood,” the bench observed.
It said the categorisation of the disaster as of “severe” nature should be sufficient to “nudge” the Centre and the NDMA to consider exercising their discretion under Section 13 of the Disaster Management Act in favour of the victims of the natural disaster.