The Kerala High Court has called upon banks to take a humanitarian approach towards the Mundakkai-Chooralmala disaster victims in Wayanad by considering partial loan waivers. A division bench comprising Justice A.K. Jayasankaran Nambiar and Justice S. Easwaran stated that while full loan waivers might not be feasible, writing off a portion of the loans could help alleviate the financial burden on the affected people.
During the hearing, Additional Solicitor General (ASG) A.R.L. Sundaresan requested two weeks to communicate the central government’s position on the matter. He noted that banks must be consulted before making a decision, as forcing them to waive loans entirely could impact their financial stability. The court, however, stressed the unique nature of the disaster, stating that unlike the temporary economic downturn caused by COVID-19, the devastation in Mundakkai-Chooralmala had caused long-term, irreversible damage to the lives and livelihoods of the residents.
The court also directed the Kerala state government to begin reconstruction work immediately, rather than waiting for central assistance. Amicus Curiae Adv. Ranjith Thampan informed the court that the central government had not yet decided on the ₹2,000 crore relief package. In response, the ASG suggested that the state should mobilize its own funds first, and additional central assistance could be considered at a later stage.
The bench criticized the lack of tangible progress, remarking that reconstruction efforts had so far remained on paper. It suggested that once the state had utilized at least 75% of the required funds, it could approach the court again, which might then direct the Centre to provide further aid. Advocate General K. Gopalakrishna Kurup informed the court that around ₹120 crore would be required to rebuild damaged bridges and roads in the affected areas.
The next hearing on the matter is scheduled for February 21, by which time the central government’s stance on the loan waiver and relief package is expected to be made clear.
