After Vijay Mallya made the Rs 4,000 crore offer to banks to settle the loans his company Kingfisher Airlines took from them, Firstpost's Dinesh Unnikrishnan had argued banks should not trust the industrialist, who still has a net worth of about Rs 7,000 crore.
Had Mallya been ready to settle with banks, he would not have waited for so long, the article said. It also highlighted the proposal is a bad bargain for banks because Mallya's dues now stand at a whopping Rs 9,000 crore.
Giving credence to Firstpost's arguments is a report that appeared in the Mint newspaper today. The report says a special court for economic offences in Bengaluru has denied permission to the income tax department to issue a non-bailable warrant against Mallya in a case related to non-remittance of tax deducted at source.
The amount in question is Rs 325 crore and pertains to the period 2009-12. Tax deducted at source or TDS is the tax an employer deducts from the salary of the employees which it then remits with the income tax department. The department has alleged that Kingfisher Airlines deducted the tax from its staff but did not remit it.
While this is not the first time that a court has taken a soft stance on a case pertaining to Mallya, what is more shocking is the way in which Mallya and his lawyers blatantly made a false submission in the court.
According to the Mint report, the lawyers to the liquor baron told the court that there is no question of non-remittance of TDS since the company was anyway not paying salaries to the employees.
However, the newspaper did a research of the annual reports of the company during the said period and found that Kingfisher had indeed paid salaries during the period. (Read the report here to see the company's wage expenses during 2009-12.)
Not only that, a staff of the company has also confirmed to the newspaper that the employees were getting the salary during the period. Kingfisher Airlines stopped getting salaries around July 2012, he says.
"However, the airline had deducted TDS judiciously since 2010 from the salaries though it did not bother to pay the tax department," the staff has been quoted as saying in the report.
So clearly, the lawyers to the baron was lying through the nose.
As noted earlier, this is not the first time a court is taking a soft stance on Mallya.
In 2014, when United Bank of India declared him a wilful defaulter, Mallya had moved the Kolkata High Court against it. The bank was the first one to take the step.
The court cancelled the tagging citing a purely technical reason that the bank's committee that took the decision had four members as against the mandatory three.
The bank - first among the 17-member bloc to take a stern action against the billionaire - is yet to tag him a wilful defaulter though two others, State Bank of India and Punjab National Bank, have done it.
The Mint report says the income tax department will now go back to the court with stronger evidence and arguments. The next hearing is on 20 April. One can hope that the tax department will get a favourable verdict on that day.
Mallya and Kingfisher Airlines owe Rs 7,800 crore (excluding interest) to a consortium of 17 lenders led by State Bank of India, which had an exposure of over Rs 1,600 crore to the now defunct airline.
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).
Published Date: Apr 07, 2016 11:26 am | Updated Date: Apr 07, 2016 12:24 pm