DRT verdict against Mallya: SBI-led consortium gets orders to initiate recovery of Rs 6,203 cr dues

In a fresh jolt to the fugitive liquor baron Vijay Mallya, India's Debt Recovery Tribunal (DRT) today has passed an order allowing the consortium of bankers led by State Bank of India to recover their debt of Rs 6,203 crore  from beleaguered businessman.

Mallya has been on the run since 2 March, 2016, after the businessman moved to UK in order to avoid being booked in his home country for duping lenders worth over Rs 9,000 crore.

The fresh order today in favour of the lending consortium will allow them to initiate the recovery proceedings and confiscate his properties.

Vijay Mallya, AFP

Vijay Mallya, AFP

The lenders had moved the DRT in 2013 to recover dues from the defunct airline. SBI had filed three other applications also, including one seeking Mallya's arrest and impounding his passport, for "defaulting" on loans.

Mallya, who left the country on March 2 last year and is now in the UK, has been declared Proclaimed Offender by a special PMLA court in Mumbai on a plea of Enforcement Directorate in connection with its money laundering probe against him in the alleged bank loan default case.

During the prolonged hearing, the DRT had disposed some of the IAs filed by either side. The DRT had on March 7 last year, restrained Mallya from withdrawing $75 million exit payment from British liquor giant Diageo as part of a severance package for quitting Diageo-owned United Spirits (USL) as its Chairman under a "sweetheart deal".

However, on July 13, the tribunal ruled that the order had become "infructuous" as $40 million had already been transferred prior to the March 7 directive. Later, passing orders on another IA, the tribunal had directed Diageo Plc to deposit with it the remaining $35 million of the "sweetheart deal".

The DRT had on July 16 allowed another IA of the bankers for lifting of corporate veil to pierce the protection against personal liability enjoyed by individuals controlling Kingfisher Finvest, a holding company of Mallya.

It had also dismissed the IA filed by Dutch beer major Heineken seeking impleadment in the Mallya case to enjoy Right of First Refusal over UBL shares. Heineken has some presumptive rights on UBL shares held and owned by Mallya.

With PTI inputs

Published Date: Jan 19, 2017 12:37 PM | Updated Date: Jan 19, 2017 12:37 PM

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