The Supreme Court on Tuesday held Vijay Mallya guilty of contempt of court for transferring $40 million to his children in violation of the court’s order and directed him to appear before it on July 10 to argue on the quantum of punishment in the matter. As is known, Mallya is in London since March 2016 and the government has started the extradition process with the United Kingdom to bring him back.
A bench comprising justices Adarsh Kumar Goel and UU Lalit said: “We hold him guilty of contempt on two counts and give him an opportunity to reply on proposed punishment and be present in court on July 10.” Mallya can face a jail term or fine or both if he does not show up in court on July 10.
According to legal experts Tuesday’s order would help the government’s efforts to extradite Mallya from UK to India.
The apex court’s order came on a plea by the SBI-led consortim of 17 banks who have alleged that Mallya had received around $40 million from British firm Diageo PLC in February 2016 and had transferred the money to the accounts of his three children in “flagrant violation” of various judicial orders”. That money, they argued, could have been used to pay back some of the debt he owes to the 17 banks. This was allegedly in direct violation with respect to the orders passed by the debt recovery tribunal (DRT) and the Karnataka High Court.
The consortium is seeking recovery of over Rs 9,000 crore dues from the now-defunct Kingfisher Airlines. Mallya, who has pegged domestic assets at Rs 2,014.60 crore and overseas assets worth Rs 780 crore, has been living in the UK since leaving India in March last year.
In April last year, the top court had directed Mallya to disclose all assets held by him and his family, after a consortium of creditors rejected his offer to repay `4,000 crore to settle the debts of the grounded Kingfisher Airlines.
Last month, Mallya was arrested by Scotland Yard in London on fraud allegations, which triggered his extradition process in the British courts. However, he was released on bail within three hours as he assured the court to abide by all conditions associated with extradition proceedings, including surrendering his passport.
The banks have not even been able to recover half the amount he had taken as loans, even after selling off some of his prime properties. Numerous attempts have been made by authorities to auction his properties in India. “It is a setback for Mallya. His not coming to India will aggravate his problems. Regardless of the extradition plea, the British authorities can be persuaded to send him back. If they do, he will be arrested here. And if they choose not to extradite the businessman he will not be worse of there. The UK is the only safest place for him,” said a senior SC lawyer, who has appeared for him in some courts.
Another senior lawyer said that there is nothing really which can compel Mallya to come to India to face trial but the SC order will definitely put pressure on him. Contempt can lead to other severe consequences like attachment of his properties, he can be declared proclaimed offender etc, he said, adding that as far as extradition plea is concerned, the two cases are “unrelated in law”.
According to SC laywer Nakul Dewan, who is also a barrister in England, “this is just a further ground for the Indian government to set out before the English courts, but is definitely not going to be a game-changer on the basis of which the English courts will base their decision.”
In February, a special court had issued a non-bailable warrant against Mallya in the `1,300-crore loan default case after the CBI had in January filed chargesheets against 11 accused, including Mallya, Kingfisher Airlines and the then IDBI chairman Yogesh Aggarwal. The charge sheet also paved the way for the CBI to approach authorities in the UK to deport Mallya.