Kingfisher Loan Case: Vijay Mallya Fresh Plea In Karnataka High Court
Fugitive businessman Vijay Mallya has taken a stand before the Karnataka High Court that the debt owed to banks amounting to Rs 6,200 crore has been “recovered multiple of times”, and hence he sought a statement of details and amounts recovered from him, United Breweries Holdings Limited (UBHL, now in liquidation), and other certificate debtors.
The High Court issued a notice to banks in response to the petitions filed by Mallya on 3 February, in which Justice R. Devdas called on the banks to file their responses by February 13. Further, as interim relief, the petition sought to put a halt to any further asset sales by banks under the amended recovery certificate until a clear picture can be given for full settlement of the debt.
Advocate Poovayya stipulated that all higher avenues of law had confirmed the winding-up of Kingfisher Airlines including its holding company, UBHL.
Poovayya stated that the debt had been shaped, but the proceedings had been going on against Mallya for an over-bloated debt. He also sought to inform the court that the Debt Recovery Tribunal had passed an order on payment of Rs 6200 crore to Kingfisher as the principal debtor and UBHL as guarantor.
“He did say that an order was attested. Check about these things. But between 2017 and now, the Rs 6,200 crore and more have been repeatedly collected. It may be admitted that the recovery officer has acknowledged recovery today of Rs 10,200 crore. The official liquidator says the banks have recovered their loans, and the finance minister himself told Parliament that Rs 14,000 crore were recovered.”
He clarified that the plea does not dispute the loan repayment but, with the Companies Act, argues that once the debt is fully repaid, the guarantor company (UBHL) need not be considered liable and can thus again seek revival; however, this will require a certification from the recovery officer stating that full repayment has happened-a certification that has not issued yet. Meanwhile, recovery continues and no one is clear on whether the primary debt has been entirely paid.”
The application requests the banks to provide a statement with the quantification of the recoveries in favor of the banks, along with details thereof towards the owners of the assets, be it the amounts generated, for recoveries as per the amended recovery certificate issued by the DRT on 10 April 2017. It further seeks an account of assets contained between banks and Mallya, UBHL, or third parties, that have not yet been utilized for the recovery of loans pending with the banks.
Recovered Funds From Fraudulent Activities
FM Nirmala Sitharaman outlined several important cases of attachment by the ED of properties of individuals and corporate entities involved in economic offenses. The Minister of Finance also said that the government has recovered properties worth an estimated ₹22,280 crore, in major cases only when answering the discussion on Supplementary Demands for Grants—First Batch for 2024—2025. Out of this amount recovered, assets worth ₹14,131.6 crore in the case of running fugitive businessman Vijay Mallya have been returned to public sector banks.
A Case Study on Vijay Mallya Scam Cases
Known commonly as the “King of Good Times,” and “The Playboy of the East,” Vijay Mallya was born in 1955 to the well-known Indian industrialist Vittal Mallya. Vittal Mallya gained all the limelight as the director of the United Breweries (UB) Group, which he was chosen for at 23! The death of his father paved the way for him to become the chairman of the UB Group.
Vijay Mallya Scam-What Were Loans Sanctioned For?
Kingfisher loans have been monumental through time. The pertinent question is whether loans taken by UB Group were used for the prescribed purpose. There have been allegations that the loans availed by Vijay Mallya were only for serving his ends. Allegations state that Vijay Mallya had these loans laundered overseas into several tax havens. If done through shell companies, Mallya would have the loans received from banks transferred to the shell companies with dummy directors being put in place for that purpose.
All the companies were inactive with no separate source of income, and their board of directors followed the request of Mallya and instructions from the UB Group. The company was perhaps located in seven countries outside India.
Farther away in the complaint is Vijay Mallya’s siphoning of funds for his IPL team Royal Challengers Bangalore and F1 team-Force India. All this was happening while employees at Kingfisher were battling to survive without salaries for 15 months, well into October 2013.
Vijay Mallya’s Perspective
According to him, macroeconomic factors were responsible for the downfall of Kingfisher Airlines. He blames government policies as an afterthought. Giving resistance to his name being dragged into all NPA cases, Vijay Mallya states that he is the victim of a media campaign.
Vijay Mallya has also made a promise to pay the banks a good sum of Rs. 4,000 crores to settle all accounts. However, news reports speak of lenders who came together and agreed on Rs. 4900 crores to be paid upfront.
