The Karnataka High Court on Friday issued bailable warrant against liquor baron Vijay Mallya for violating the undertaking given to the Debt Recovery Tribunal (DRT) which had asked him not to transfer or deal with assets. The warrant has been issued in contempt of court. Earlier on January 19, the DRT ordered State Bank of India-led consortium of banks to start the process of recovering over Rs. 6,000 crore from Mallya.
The DRT had allowed original application of the bankers (i.e. bankers can now begin process to recover the amount). It gave its decision in favour of the SBI-led consortium of banks. Earlier in June 2016, the SBI had pleaded before the DRT to grant the recovery certificate for beginning the proceedings against Mallya for recovery of debts from him in the bank loan default case.
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Mallya, who is in London since March 2, 2016, owes Kingfisher Airlines’ 17-bank consortium over Rs 6,000 crore. The Tribunal has now given the banks led by State Bank of India (SBI) a go-ahead to start the recovery of Rs 6,203 crore owed to them.
Kingfisher Finvest’s counsel had submitted that the company was neither a party nor a guarantor for the loans taken by Kingfisher Airlines, United Breweries Holding Limited (UBHL) or Mallya and just was a pledgor, and hence as per existing laws action cannot be initiated against the pledgor.