Kerala HC rules against recovering loan arrears from disaster relief funds

Kochi: The Kerala High Court has ruled that the loan arrears of Wayanad landslide victims cannot be recovered from the relief funds provided by the government. In a directive issued to the state government, the court has asked for clear instructions to be given to cooperative banks, ensuring that such recoveries do not occur. 

The court emphasised that banks are not permitted to recover loan arrears from the financial assistance granted to disaster victims. This aid is akin to a trust-provided relief, court said. The Division Bench, comprising Justice A.K. Jayasankaran Nambiar and Justice V.M. Shyam Kumar, stated that banks have a constitutional obligation to adopt a compassionate approach in these circumstances. 

The court also requested information on any instances where loan arrears were recovered from the relief funds allocated to disaster victims. This response came after media reports highlighted cases where EMIs were allegedly deducted from these funds. 

The court stressed the need for a humanitarian approach in the aftermath of such disasters, noting that while there is widespread sympathy in the initial days, the situation often changes soon after, the Bench observed.

This ruling was made during a suo motu case considered by the court in response to the Wayanad tragedy. The government, along with senior advocate Ranjit Thampan, who served as amicus curiae, submitted reports on the matter.

Furthermore, the court has sought detailed information on several key issues. These include the decision to increase the number of experts in the disaster management authority, whether an advisory committee consisting of experts has been formed, the disaster management plans that have been developed, and the funds allocated for these initiatives.

In addition, the petition filed by Sabu Stephen, a resident of Thiruvananthapuram, was accepted into the court’s records. However, the court stated that other related pleas would not be entertained and that the matter would be referred to the amicus curiae for further consideration. The court also requested details regarding media reports of potential hazards in certain areas of Kozhikode district.