Clamping down on Vijay Mallya-led UB Group to recover loans, a 17-bank consortium led by state-run SBI today took over possession of the prized Kingfisher House, estimated to be worth Rs 100 crore. The banks have taken possession of the over 17,000-sq ft property at Vile Parle, near the domestic airport here, as part of their efforts to recover the Rs 6,800 crore loan they had granted to the long-grounded Kingfisher Airlines. Later, the airline said in a statement that it today handed over possession of its property, Kingfisher House, to SBICAP Trustee, a security trustee for the consortium of the Kingfisher lenders. This is "without prejudice to all of the rights, remedies and contentions of the company including the right to file appropriate proceedings to challenge the said order dated February 12, 2015", Kingfisher said. The order, passed by a Chief Metropolitan Magistrate here, had allowed the banks to take over the possession as part of their recovery process, which they had started way back in February 2013 after the airline stopped servicing the debt. Kingfisher House is one of the prime real estates of the airline, which was once touted as the most luxurious carrier in the country and one of the crown jewels of Mallya-led UB Group. The airline was grounded in October 2012 while its flying permit was cancelled in December that year. The other collateral left with the banks is Kingfisher Villa in Goa, which has a market value of under Rs 90 crore. When contacted, a senior SBI official also confirmed the development regarding the possession of Kingfisher House. When asked about the status of the Income Tax and Service Tax Departments' claim on the same property, SBI's Deputy Managing Director & Group Executive for Stressed Assets Management Parveen Kumar Malhotra told PTI that the banks have to discuss that with the tax authorities and a decision would be taken only after that. In December 2013, the I-T Department had moved a Bangalore court seeking to direct banks to first settle its dues of Rs 350 crore after the lenders sought to take possession of Kingfisher House citing that the property was attached by the department under the IT Act. Kingfisher owes around Rs 350 crore to the IT department while the arrears to the service tax department amount to Rs 100 crore. The airline's arrears to the 20 lenders are Rs 6,800 crore, besides accrued interest. Early in 2013, the lenders had appointed HDFC Securities to do a valuation of Kingfisher House after their loans were declared as NPAs in January that year and it was reportedly valued at around Rs 100 crore. SBI began a process to take possession of the property in July 2013. So far, SBI has been able to recover Rs 140 crore, out of the total Rs 550 crore the lenders recovered, by selling pledged shares of the airline and other promoter group companies. The other lenders include PNB and IDBI Bank (Rs 800 crore each), Bank of India (Rs 650 crore) BoB (Rs 550 crore) United Bank (Rs 430 crore), Central Bank (Rs 410 crore), Uco Bank (Rs 320 crore), Corporation Bank (Rs 310 crore), State Bank of Mysore, (Rs 150 crore), Indian Overseas Bank (Rs 140 crore), Federal Bank (Rs 90 crore), Punjab & Sind Bank (Rs 60 crore) and Axis Bank (Rs 50 crore). Lenders outside the consortium are Srei Infra Finance (Rs 430 crore), J&K Bank (Rs 80 crore) and Oriental Bank of Commerce (Rs 50 crore). Following a debt recast in November 2010, the airline had pledged these two properties with the lenders, along with personal guarantee of Mallya and other guarantees and pledges like the brand Kingfisher. When the airline was flying, the promoters had also pledged the Kingfisher brand, valuing it at around Rs 4,500 crore at that time. Lenders have been on a legal warpath against the airline and its promoter Mallya for the past two years. Last year, the Kolkata-based United Bank of India had tagged Mallya as a wilful defaulter, but he later got a stay from the Kolkata High Court on technical grounds. A number of other banks, including SBI, PNB and IDBI Bank have also filed suits to declare Mallya a wilful defaulter. Led by public sector banks, the lenders were sitting on bad loans of over Rs 2.8 lakh crore as of the December quarter, while the amount of restructured loans is much higher, together taking the total amount of bad loans well over 10.5 per cent of overall advances. As per the rating agency ICRA, NPAs are set to spike to 5.7 per cent of the total assets by March 2016. Under the new CDR norms set in place by the RBI, lenders have to set aside full provisions for any restructured loan, which means that banks will not be able to offer the normal two-year interest moratorium to borrowers and make no provisions. From April 1 this year, any new restructured loan will attract complete provision at 5 per cent as against the paltry 0.4 per cent provision for standard loans, but if the recast loan turns fully bad again, the bank will have to make provision equal to the loan amount.