Top Stories

Banks move SC for contempt action against Mallya

LiveLaw News Network
14 July 2016 2:17 PM GMT
Banks move SC for contempt action against Mallya
Your free access to Live Law has expired
To read the article, get a premium account.
    Your Subscription Supports Independent Journalism
Subscription starts from
(For 6 Months)
Premium account gives you:
  • Unlimited access to Live Law Archives, Weekly/Monthly Digest, Exclusive Notifications, Comments.
  • Reading experience of Ad Free Version, Petition Copies, Judgement/Order Copies.
Already a subscriber?

A consortium of 17 banks including the State Bank of India today filed a petition in the Supreme Court seeking initiation of contempt of court proceedings against business tycoon Vijay Mallya for non-disclosure of his assets despite a specific order from the bench three months ago.

On April 29 a bench of Justices Kurian Joseph and Rohinton Nariman had directed Mallya to disclose all assets held by him and his family, after the consortium rejected his offer to repay Rs. 4,000 crore to settle the debts of the grounded Kingfisher Airlines.

Mallya, who has skipped the country and is currently in UK, later agreed to disclose a list of assets held by him in India to the apex court in a sealed envelope.

Making an urgent mentioning of the matter, Attorney General Mukul Rohatgi who represented the banks said Mallya has not been forthcoming about his assets and wanted the court to hear the case at the earliest. The court agreed to hear it on July 18.

On April 29, the court sternly told Mallya that he cannot claim immunity from disclosure of his assets and those of his family in India and abroad to consortium of banks on the ground that he was an Non Resident Indian since 1988.

“We don't find any tangible objection in disclosing the assets (of Mallya, his wife and children) to banks”, the bench said.

The bench directed the apex court registry to furnish to the lenders, a consortium of banks, the details of assets, both domestic and foreign, declared by the former liquor baron of himself and his family members, in sealed cover to the apex court.

“The respondent has not complied with our April 7 order. The whole purpose of asking for disclosure was to give a fair idea to banks for entering into a meaningful and viable settlement”, the bench said asking the Debt Recovery Tribunal in Bengaluru to expeditiously decide within two months, the pleas of banks and financial institutions for recovery of their loans to the tune of Rs 9,400 crore.

It is to be noted that on April 21, two weeks after the apex court asked him to disclose all assets owned by him and his family in India and abroad, Mallya told the Supreme Court through an affidavit that banks who have initiated recovery proceedings against him have no right over the information of his movable and immovable assets in foreign countries as he was an NRI since 1988.

“Statement of Assets was confined to assets in India only and overseas assets were not disclosed which as a Non-resident Indian, Respondent no 3 (Vijay Mallya) is not obliged to disclose even to income tax authorities in his Indian tax returns”, it said.

“He is a fugitive from justice in India”, the Attorney General had said, adding the embattled businessman was playing hide and seek and cooking cock and bull story.

Rohatgi said Mallyawas deliberately concealing something from the court as he had no intention to come back. However, senior advocates C S Vaidyanathan and Parag Tripathi, appearing for Mallya and his companies respectively, submitted that he was a defaulter but not a wilful defaulter and here this is a case of business failure and not that of wilful default.

Vaidyanathan had submitted the accumulated loans of Kingfisher Airlines stood at Rs 16,000 crore in 2013 and all loans were given on the basis of personal assets of Mallya which is in the records of the banks. That being the case the liabilities cannot be attached to his estranged wife living abroad and NRI children who are protected under the law from disclosing their overseas assets, he contended. Mallya has defaulted on repayment of loans of Rs 9,400 crore to a State Bank of India-led consortium.

Next Story