More trouble for Vijay Mallya: Karnataka HC admits SBI's plea for his arrest, issues notice to liquor baron - Firstpost
You are here:

More trouble for Vijay Mallya: Karnataka HC admits SBI's plea for his arrest, issues notice to liquor baron

Bengaluru: The Karnataka High Court on Friday issued notice to industrialist Vijay Mallya and others on a plea by the State Bank of India (SBI) seeking his arrest and impounding of his passport in the multi-crore loan default case of defunct Kingfisher Airline.

Admitting the petition, Justice AS Bopanna issued notice to Mallya, Kingfisher and United Breweries Holdings Ltd as well as British liquor major Diageo plc and its Indian arm, United Spirits Ltd. for their response and posted the case for hearing next week.

The judge also made an observation that the Debt Recovery Tribunal, which is hearing the case, was free to pronounce order on the bank's applications as it deemed fit.

Vijay Mallya. Reuters

Vijay Mallya. Reuters

"We have filed a writ petition before the single bench of Justice Bopanna for the arrest of Mallya and impounding of his passport on the basis of a statement he made recently that he would move to Britain to be with his family," a lawyer for the bank, speaking on the condition of anonymity, told IANS .

As a lead bank of the consortium of 17 state-run and private banks, which have a combined outstanding dues up to Rs 7,800 crore from Kingfisher, headed by Mallya, the SBI moved the High Court after the Debt Recovery Tribunal reserved order on its four interlocutory applications filed on Wednesday.

"We have approached the High Court as the tribunal had not yet acted upon our applications, which included disclosure of Mallya's assets in India and abroad and our claim on the $75 million (Rs.516 crore) severance package Diageo and USL signed with him on 25 February here," the counsel said.

The writ in the High Court prayed for disclosure of properties of Mallya, his son Siddharth, and his relatives and restraining Diageo and USL from paying the deal amount to Mallya.

"We have petitioned the High Court for relief in case tribunal judge R Benkanahalli does not give order on our IAs on Monday or Tuesday and adjourns hearing in our case before it," said another lawyer for the bank.

The bank was expecting the tribunal to order attachment of the $75 million deal Diageo signed with Mallya for his resignation as chairman and non-executive director of USL and other group companies.

As part of the sweetheart deal, USL has to pay Mallya $75 million over a five-year period, including $40 million (Rs 275 crore) this year and $35 million over the next four years.

Earlier, Mallya's senior counsel Uday Holla, who filed objections to the tribunal's notices, presented arguments before its judge.

"The tribunal cannot attach the severance package as Mallya is getting it for signing a non-competitive agreement that bars him from entering into liquor (spirits) business and compete with Diageo over the next five years," Holla argued.

He also assured the tribunal that Mallya would not leave the country, as he was also an independent lawmaker in the Rajya Sabha from Karnataka.

Countering Holla's submission, bank's counsel George Joseph told the tribunal that Mallya's statement could not be taken on face value.

"Mallya is taking everyone for a ride. By not repaying the debt to the consortium banks, he is demeaning parliament as its lawmaker. It is a sin not to repay loans, which amount to Rs 10,000 crore, including interest on the loans sanctioned from 2004-12 and remain outstanding," Joseph argued.


Comment using Disqus

Show Comments