The Karnataka High Court on Tuesday issued a contempt proceeding notice against UB Group chairman Vijay Mallya...
The Karnataka High Court on Tuesday issued a contempt proceeding notice against UB Group chairman Vijay Mallya for breaking the oral undertaking that he had given to a judicial body.
Mallya had given an oral undertaking to debt recovery tribunal (DRT) last year that he would not alienate assets of himself and his indebted companies, United Breweries Holdings (UBHL) and Kingfisher Airlines (KFA).
The lenders’ consortium led by State Bank of India (SBI) has alleged in the petition that Mallya has rescinded on his oral undertaking and pledged shares of himself while recovery proceedings were going on.
According to the lenders’ consortium, the DRT had issued orders against Mallya and the companies owned by him that they should not alienate or pledge assets without their permission.
Last week, the Karnataka High Court had admitted six winding-up petitions filed against UBHL by KFA’s creditors and separately by United Bank of India (UBI) — who are seeking to enforce corporate guarantees given to them. The development comes a year after the court had admitted the first of the winding-up petitions against UBHL, the parent company of the UB Group.
In its defence, UBHL had pointed to existing disputes with engine manufacturers. In the case of the banks’ petitions, it had argued that the banks had approached the DRT and that parallel proceedings were not permissible. The company also said it has filed a suit in the Bombay High Court contending that the corporate and personal guarantees were void “ab initio”.
In December last year, Calcutta High Court had dismissed, on technical grounds, UBI’s decision to declare Mallya and the airline wilful defaulters. SBI consortium’s petition, filed in August 2013, sought to recover dues of R5,823 crore.
UBI, which had filed its petition earlier, though it is a part of the consortium, is looking to recover R450 crore.