Relief for Vijay Mallya as court refrains banks from taking over Kingfisher Airlines property

fe Bureau Posted online: Wednesday, Nov 06, 2013 at 0000 hrs
Mumbai : Attempts by Kingfisher Airlines Ltd’s lenders to recover dues remain mired in legal processes with Vijay Mallya's company blocking banks from taking over the Kingfisher villa at Candolim in Goa.

A local court in Goa asked creditors to maintain status quo on the property and restrained them from “interfering” with the property, in an order passed on Friday. The move came after SBICAP Trustee Company, a wholly-owned subsidiary of SBI Capital Markets, said it had taken possession of the of the three-acre Kingfisher Villa in Goa on October 30.

“I am satisfied that as the plaintiff (UB Holdings) has duly deposited R35 crore before this court as directed to redeem the mortgage in respect of the suit property and as the order dated April 26, 2013, continues to operate, the plaintiff cannot be dispossessed from the suit property,” the court order said.

According to UB Group spokesperson, the court injunction restrains banks from taking any action against Kingfisher Villa, Goa. “This injunction was initially granted on April 26, 2013, and confirmed/continued by the court at subsequent hearings, including on Friday,” said the spokesperson.

The Goa villa property, reportedly valued at Rs 37 crore is among the physical assets that lenders are trying to liquidate to recover more than Rs 7,000 crore in dues pending to a consortium of 17 banks led by State Bank of India. SBI has the largest exposure to Kingfisher at Rs 1.600 crore.

“The recovery process is continuing,” said a senior official within the lenders consortium recently, while declining to give details. Earlier, in May, lenders had served Kingfisher Airlines with a Sarfaesi notice, after which the company was given a 60 days to repay dues.