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17 Banks move SC to stop Mallya from leaving country; Hearing tomorrow

Live Law News Network
8 March 2016 11:06 AM GMT
17 Banks move SC to stop Mallya from leaving country; Hearing tomorrow
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In a setback to industrialist Vijay Mallya, the Supreme Court today agreed to hear tomorrow a plea filed by a consortium of 17 PSU banks seeking a direction that he be restrained from leaving India.

When Attorney General Mukul Rohatgi, appearing for PSU banks, mentioned the matter for urgent hearing a bench headed by Chief Justice T S Thakur said “it shall be listed tomorrow. We will hear it tomorrow”.

The AG mentioned that the plea has been moved by 17 banks, including State Bank of India, against Mr. Mallya whose various firms have taken loan from them. He also said that the dues run into thousands of crores.

Led by SBI, the 17 bank consortium is struggling to recover Rs. 6,963 crore debt due from Kingfisher Airlines.

It is to be noted that the Debts Recovery Tribunal had on Monday passed orders restraining multinational alcoholic beverages company, Diageo Plc, from paying Mallya Rs 515 crore as part of a settlement to exit Diageo-owned United Spirits Limited.

The move by ED, under the Prevention of Money Laundering Act (PMLA), comes after the CBI registered a suo motu FIR against Kingfisher Airlines in July 2015. The company owes at least Rs 7,000 crore to 17 banks; some of them such as the State Bank of India and Punjab National bank have already named Mallya and his company as a “willful defaulter”.

The CBI had registered the FIR against Mallya. A Raghunathan, chief financial officer of Kingfisher Airlines, and unknown officials of IDBI Bank. It is alleged that the loans were sanctioned in violation of norms regarding credit limits.

Last month, the consortium had moved the debt recovery tribunal (DRT) to attach defunct carrier Kingfisher Airlines’ promoter Vijay Mallya’s passport.

The consortium also appealed that the funds Mallya will receive from Diageo be kept in an escrow account till the liquor baron clears the dues. Punjab National Bank, SBI and nited Bank of India have declared KingFisher Airlines and its promoter Mr. Mallya as a 'wilful defaulter.'

The SBI has the highest exposure of Rs 1,600 crore to the beleaguered Kingfisher Airlines.

Other banks that have exposure to the airline include Punjab National Bank and IDBI Bank (Rs.800 crore each), Bank of India (Rs. 650 crore), Bank of Baroda (Rs. 550 crore), Central Bank of India (Rs. 410 crore).

UCO Bank has to recover 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)

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