How did defaulter Vijay Mallya get loan: Supreme Court

By: | Updated: March 10, 2016 10:07 AM

Controversial businessman Vijay Mallya’s troubles mounted further on Wednesday, with the Supreme Court issuing notice to him seeking his response within two weeks on pleas filed by a consortium of banks demanding direction for freezing his passport and his presence in the court.

Loan default caseDuring the brief hearing, the AG said that an amount of more than Rs 9,000 crore was due to various banks and on one or the other pretext, Vijay Mallya avoided to settle them. (Reuters)

Controversial businessman Vijay Mallya’s troubles mounted further on Wednesday, with the Supreme Court issuing notice to him seeking his response within two weeks on pleas filed by a consortium of banks demanding direction for freezing his passport and his presence in the court. However, what came as a surprise was the revelation by attorney general Mukul Rohatgi that Mallya had left the country a week back and was probably in London.

“I spoke to the CBI a little while ago and it told me that on March 2, he (Mallya) left the country,” Rohatgi told the bench comprising justices Kurian Joseph and R F Nariman. The bench, therefore, allowed the plea of the AG that the notice to him can be served through his official Rajya Sabha e-mail ID, the Indian High Commission at London, through the counsel representing him before various high courts, the Debt Recovery Tribunal and also through his company.

The next hearing has been scheduled for March 30.

During the brief hearing, the AG said that an amount of more than Rs 9,000 crore was due to various banks and on one or the other pretext, Vijay Mallya avoided to settle them.

There have been various proceedings going on against him in debts recovery tribunals in Bangalore and Goa, he said.

The AG said that Mallya has assets, both movable and immovable, abroad which are far in excess of the loans secured by him in the country. At this, the bench wanted to know how the banks granted him loan under such circumstances. The AG said the loans were granted keeping in mind that Kingfisher Airlines had a fleet of aircraft as well as brand value, and loans were given also on the basis of the logo. The aircraft were attached to the third party. He told the bench that it is permissible to grant loans on intangible assets when justice Joseph asked if the banks could have granted loans when pledged assets had only one-tenth or one-fifteenth of the value of loan.

“We are not after anyone’s blood but we want our money. The gentleman should appear in person and bring his passport and disclose his assets. Information available to us is that he (Mallya) has assets, both movable and immovable, abroad and they are far in excess of loans secured by him,” the AG said.

The consortium of banks, in their appeal, have assailed the March 4 order of the Karnataka High Court that refused to freeze Mallya’s passport and issue arrest warrants against him. The plea before the apex court is that both the HC and DRT have failed to protect the interests of lenders and public at large, as they are yet to recover R9,000 crore from Kingfisher Airlines, United Breweries (Holdings) Ltd, Vijay Mallya and Kingfisher Finvest (India) Ltd.

On Monday, the DRT in Bangalore had blocked a $75-million settlement Mallya had recently entered with Diageo Plc at the request of SBI and other creditors. The settlement was in lieu of Mallya stepping down as chairman of USL and signing a non-compete agreement with it. In a statement on Sunday evening. Mallya had said that he had no plans to run away from his creditors and was in talks over a one-time settlement with banks to resolve Kingfisher’s debt.

Besides State Bank of India, other banks which have moved the SC are: Axis Bank, Bank of Baroda, Corporation Bank, Federal BankLimited, IDBI Bank, Indian Overseas Bank, Jammu and Kashmir Bank, Punjab and Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank and United Bank of India.

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