The dominant tone of the affidavit filed by liquor-baron, Vijay Mallya at the Supreme Court (SC) on Thursday, in connection with his Rs 9,000 crore bank loan default case, is that of utter defiance.
In his affidavit, Mallya refused to disclose his current location or his plans to return India to face the law of the land. The ‘King of Good Times’ said banks have no right to seek the details of his overseas assets. Mallya criticized the unseemly haste by the government in suspending his passport that created impediments in the ‘whole process and endeavor.” Mallya said he is ready to pay a token amount of Rs 1,591 crore to prove his bonafides and pay the rest in parts. The whole affidavit sounded like someone making a generous offer than a wilful defaulter negotiating settlement with banks.
There are few important aspects in the Kingfisher-Mallya case that shows Mallya’s persistent defiant attitude, in the context of the latest affidavit:
One, an individual, against whom non-bailable arrest warrants (NBW) are issued by multiple courts, whose passport is suspended and whose arrest is sought by the Enforcement Directorate (ED), is unwilling to even disclose his location, forget appearing in person before the court, despite being asked by the court repeatedly. It shows the extent of Mallya’s defiance to the law of the land. Mallya is a perfect example of how the rich and the powerful can dictate their own terms to the establishment — something unthinkable for an ordinary citizen facing charges of loan default or financial irregularities. The question is should the country and its taxpayers tolerate such a mockery of the system?
Two, Mallya doesn’t consider himself as a wilful defaulter. He denied this charge vehemently. “The Kingfisher Airlines was a genuine commercial/business failure and it is vehemently denied that any loan advanced by any of the petitioner banks to the Airlines has been at all misused or otherwise Respondent No. 3 (Mallya) has amassed assets/properties in the names of his family members or relatives or friends with intention to defeat the purpose of recovery of alleged dues,” the affidavit said. Remember, banks have tagged Mallya as a wilful defaulter after extensive audits and investigations under the rules laid out by the Reserve Bank of India, not at their whims.
Here, Mallya’s claim that he is an honest borrower and not a wilful defaulter is evidently questionable. The ED has already found that part of the loan Mallya took for Kingfisher has been diverted abroad to buy assets, a charge the UB group has denied.
Had Mallya been a genuine borrower, the industrialist would have made efforts to pay back the money well in advance and would not have waited till he is cornered by the banks, courts and the government agencies. The Kingfisher loan turned an NPA back in 2012. The reason why banks rejected his earlier offer to pay up Rs 4,000 crore is that lenders do not trust the promise of the liquor-baron. Even the latest affidavit doesn’t give a roadmap to pay up the full amount banks claim (a little over Rs 9,000 crore).
Three, Mallya’s claim that he is not an absconder is proving to be untrue by his own defiance at this stage with respect to the secrecy of his location and absence of commitment to return to the country. Mallya left the country on 2 March and since then has stated (through twitter and his lawyers) that he is not an absconder. In the first week of April, the SC asked Mallya to know within two weeks when he will return to the country. But even in yesterday’s (Thursday) affidavit, Mallya has not told the court what are his plans of return and the whereabouts of his current location. This strengthens the belief that Mallya indeed left the country with the intention to flee. One shouldn’t be surprised if the liquor-baron seeks an easy-to-get foreign citizenship such as Malta (where one can be a citizen if he invests certain amount) and secure a passport.
Four, Mallya’s claim the move of External Affairs Ministry at the insistence of ED to suspend his passport has created impediments in the ‘whole process and endeavor’ of loan settlement doesn’t hold much water. ED proceeded to take such an action after issuing multiple summons to Mallya and waiting for his response.
Five, Mallya’s argument that banks cannot claim his overseas asset details and his request to the court that the same (he offered to pass on to the SC in sealed cover) should not be shared with banks is rubbish. The whole purpose of the case in the court is the recovery of the money from Mallya. It is up to the banks to identify his assets and proceed with the recovery process. It is not the job of a court. Mallya’s claim that banks do not have claim on his overseas assets will be contested by banks since Mallya has given his personal guarantee on the loan. In the event of loan default, the guarantor is liable to pay up from his personal assets.
Six, another question arises here is that why Mallya still continues as a member of Indian Parliament despite facing a host of charges against him and unethical behavior. As Firstpost’s former Editor, R Jagannathan argued in this article, Mallya is a fit case of expulsion from Parliament for the simple reasons that he has brought shame to the institution by behaving unethically with India.
Kingfisher loan turned NPA in 2012. Two banks — SBI and PNB - have already tagged Mallya as a wilful defaulter. Banks’ very action of tagging Mallya as a wilful defaulter negates Mallya’s argument that he deserves a fair treatment by banks at this stage. This case has grown far beyond the status of a normal banker-borrower dispute. Mallya shouldn’t be allowed to continue with the delaying tactics and hard bargain. Certainly, the drinks mogul doesn’t deserve any special treatment by courts and banks than a common citizen does.
Published Date: Apr 22, 2016 12:08 pm | Updated Date: Apr 22, 2016 12:09 pm