'Banks Must Stop Charging Interest On Amount Already Recovered': Vijay Mallya To Karnataka High Court On Kingfisher's Outstanding Debt

Fugitive liquor baron Vijay Mallya, who has approached the Karnataka High Court seeking information on outstanding debt owed by him and his erstwhile airline Kingfisher (United Breweries Holdings Limited), argued that the banks must stop charging interest on the amounts already recovered by them.Making submissions before Justice Lalitha Kanneganti, senior advocate Sajan Poovayya, appearing for Mallya argued that the banks had already received the money due and could not continue to take a stand that due to the pendency of proceedings, the recoveries made would not be treated as final recovery. "See the objections of the bank where they say money is not received and still amount is due. Bank is using the money, my interest meter should stop ticking. You (bank) have received the money and cannot now say that cases are pending adjudication and thus recovery made through court cannot be construed as final recovery," Poovayya argued.Mallya had filed the petition seeking information on the outstanding debt owed by him and his erstwhile airline Kingfisher (United Breweries Holdings Limited). He had sought a statement of accounts, after adjusting all the recoveries made from him from time to time.During the hearing today, Poovayya explained that Mallya's company, UBHL was holding the Kingfisher Airlines, which defaulted on a loan for which Mallya was the guarantor. It was informed that after the default, the DRT issued a recovery certificate and continued the recovery proceedings. It was informed that Mallya's assets were attached due to the PMLA proceedings, and around 10,000 crore had been recovered. Poovayya submitted that far more than what was owed had been recovered already and all he (Mallya) was seeking was a statement detailing the recovery made till now. Relying on the DRT order, Poovayya submitted that the recovery certificate was for the recovery of ₹6203 crore with a further interest at 11.5 percent. He pointed out that, as per the press release dated July 16, 2021, issued by the ED, the amount recovered was Rs. 7181 crore. He also argued that as per the recovery proceedings, Rs. 10,040 crore had been recovered. Poovayya also submitted that as per the submission of the official liquidator before the court, the consortium of banks had already recovered in excess of what was due. Poovayya also took the court through the statements made by the Finance Minister on the floor of the assembly, saying that the attached property of around Rs 14,000 crore had been restored to public sector banks. He also referred to the report of the Finance Ministry of the year 2024-25, stating that the complete amount of money had been restored to the public sector bank. Poovayya argued that the interest meter should stop ticking, and when the bank has received the amount, it could not now say that the cases are pending adjudication and thus recovery made could not be construed as final recovery. He argued that the bank should come clean on furnishing statement of account. Countering the plea, Senior Advocate Vikram Huilgol, appearing for the bank, questioned the maintainability of the plea. He pointed out that a writ of mandamus was being sought against the bank to do something. He wondered how a writ could be sought unless it was shown that there was a public duty cast upon the bank to do something and it had failed in its duty. "Where is the public duty to be performed by me? Writ jurisdiction is extraordinary/discretionary jurisdiction. Anyone with unclean hands are not entitled to discretionary exercice of Article 226," Huilgol argued.Huilgol pointed out that Mallya had been declared as a fugitive and did not participate in any of the pending proceedings even before the Supreme Court. He accused Mallya of coming to the court with unclean hands and picking and choosing when to come to court. He argued that all the recovery had been held as temporary recovery since Mallya was not submitting to the jurisdiction of the court. He argued that Mallya was not deserving of any relief due to his conduct. Huilgol pointed out that there were various PMLA proceedings and orders of attachment from as early as June 2016. He submitted that, as per the provisions of PMLA, the bank was required to give a bond undertaking to the PMLA court. He submitted that due to the bank's bond undertaking with the central agency, the bank was bound to treat the recoveries as temporary recoveries and Mallya could not claim it to be treated as a permanent recovery. He argued that the matter was not as simple as submitted by Mallya and that the banks were bound by statutory scheme. When the court questioned Mallya on why the same relief could not be sought before the company court, as the company was under liquidation, Poovayya pointed out that there were 3 authorities and the recovery of DRT does not report to the company court. He submitted that only the official liquidator reported to the company court. Thus, Poovayya submitted that the petition was...

'Banks Must Stop Charging Interest On Amount Already Recovered': Vijay Mallya To Karnataka High Court On Kingfisher's Outstanding Debt

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