The state-run lender became the first bank to declare the debt-ridden airline, its promoter Vijay Mallya and three directors -- Ravindra Nath Nedungadi, Anil Kumar Ganguly, and Subhash R Gupte -- as wilful defaulters. After this declaration, the defaulters would not be able to borrow from the bank in future. They would also lose director-level positions in companies and criminal proceeding could be initiated against them if warranted.
Even other banks, including the State Bank of India, IDBI Bank and Punjab National Bank, have initiated the process of declaring KFA and its directors as wilful defaulters. A bench headed by Justice AR Dave, while refusing to grant any relief, said: Your grievance has been that Grievance Redressal Committee (GRC) should not decide the matter. But it has already decided it, therefore, your plea is infructuous... Now that you have been declared a defaulter, you can challenge it in any court.
The carrier had alleged that the order by GRC was passed while ignoring its plea that the director should be allowed to be represented through lawyers. The GRC meeting was convened on Monday after the Calcutta High Court allowed the bank to initiate the process of declaring them as wilful defaulters last week. The GRC had asked directors to be present before it, but no one turned up. Instead, they sent a letter through their lawyer stating that they had moved the Supreme Court.