HC has stayed United Bank of Indias wilful defaulter tag: Kingfisher

Written by Express news service | PTI | Mumbai/New Delhi | Updated: Sep 28 2014, 14:43pm hrs
KingfisherKingfisher Airlines said it has secured a stay from the Calcutta High Court on United Bank of India's wilful defaulter tag.
Kingfisher Airlines on Saturday said it has secured a stay from the Calcutta High Court on United Bank of India (UBI) declaring the airline and its directors, including promoter Vijay Mallya, as wilful defaulters.

Commenting on the stay granted by the Calcutta High Court, Prakash Mirpuri, vice president, Kingfisher Airlines, said, We had earlier stated that we would legally challenge the wrongful decision of United Bank of India and that we have great faith in the judiciary in our country. We will legally defend our position on all allegations going forward.

The bank has been directed to file its affidavit-in-opposition by November 3, 2014 and the petitioners have been directed to file their reply one week thereafter. The next date of hearing has been fixed for November 10, 2014, he added.

UBI which had lent

Rs 430 crore, was the first lender to declare KFA promoter Vijay Mallya and its three other directors wilful defaulters.

In a statement, Kingfisher Airlines said, Kingfisher along with its directors/erstwhile directors had filed a writ petition in the Calcutta High Court against the United Bank of India and others, challenging the constitutional validity of the RBI Master Circular on wilful defaulters as well as challenging the ex-parte decision of the Grievance Redressal Committee constituted by United Bank declaring the petitioners wilful defaulters.

On September 1, United Bank of India had termed Kingfisher Airlines, its chairman Vijay Mallya and three directors AK Ganguly, Subhash Gupte and Ravi Nedungadi as wilful defaulters.

On September 2, the airline was denied relief by the Supreme Court. A bench comprising justices Anil R Dave and UU Lalit had said a special leave petition filed by the airline seeking to block the decision by UBIs grievance redressal committee had become infructuous.

Your grievance has been that the grievance redressal committee should not decide the matter, but they have already decided it; therefore, your plea is infructuous, the bench had said.

The airlines petition specifically asked the court to restrain UBI from proceeding against it as an interim relief.

Kingfisher Airlines, which has been grounded since October 2012, owes Rs 7,500 crore to a consortium of banks led by State Bank of India.

SBI has the maximum exposure of Rs 1,600 crore to the airline, which has been grounded since October 2012. Punjab National Bank and IDBI Bank each have an exposure of Rs 800 crore each, Bank of India Rs 650 crore and Bank of Baroda

Rs 550 crore.

The airline had accumulated losses of Rs 16,023.46 crore as on March 31, 2013 and its net worth was a negative Rs 12,919.82 crore. It had never made a profit since its inception in 2005.