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Breaking; AG tells SC that Mallya has left India; Notice issued on Banks’ plea for impounding passport

LiveLaw News Network
9 March 2016 9:33 AM GMT
Breaking; AG tells SC that Mallya has left India; Notice issued on Banks’ plea for impounding passport
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The Supreme Court was today informed by Attorney General Mukul Rohatgi that business tycoon Vijay Mallya had left the country following which the court issued notice to him on a petition by a consortium of 17 PSU banks seeking his summoning and impounding of his passport.

After AG said Mallya could be in London, a bench of justices Kurien Joseph and Rohinton Nariman issued notice to him to be served through his official Rajya Sabha email ID through Indian High Commission at London.

Mallya has been asked to respond to the petition filed by the banks within two weeks. The next hearing is on March 30.

Attorney General Mukul Rohatgi, representing the 17 PSU banks told the court that Mallya left the country on March 2, 2016, the day the banks had moved the court seeking to restrain him from going abroad.

Rohatgi told the court that the banks were not after Mallya’s blood but only wanted his passport to be kept impounded till the loan recovery proceedings are over.

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

Firing a volley of questions at the consortium of banks, the bench asked them why it gave so much loan to him when they already knew that his assets were mostly abroad.

The bench also asked if so much loans could have been forwarded without securing adequate assets as guarantee.

It also asked why loans were extended to him when he was a defaulter and was facing proceedings in court of law.

The banks informed the SC that Mallya's assets abroad are far in excess to loans taken by him.

The consortium of banks has sought directions for appearance of Mallya in person before apex court and for freezing his passport.

The banks have told the court that Mallya’s dues run into thousands of crores.

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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