In a setback to Vijay Mallya-led UB Holdings Limited, the Karnataka HC on Friday held as "null and void" UBHL's sale of shares of its United Spirits Limited to UK-based spirits giant Diageo.
A Division Bench comprising Justices N Kumar and Rathnakala said the deal is void until a conclusion is reached on the winding up petitions against UB Holdings.
The court also asked Diageo to return the shares bought from UBHL as the company is mired in a whirlpool of winding-up petitions by creditors, who are seeking recovery of unpaid dues of close to Rs 600 crore from Mallya's firm.
Diageo had picked up more than 19 lakh shares of United Spirits for over Rs 472 crore in November this year.
UBHL said it would go through the judgement copy and decide on options to move the Supreme Court against the High Court order in January next.
Certain companies, including corporate banker BNP Paribas, which are creditors to UBHL, had filed petitions in the High Court seeking its winding up as the holding company was unable to pay its debts.
On December 16, the High Court had dismissed an appeal filed by UBHL against the winding up petition by BNP Paribas for "lack of merits."
UBHL had filed the appeal against last month's order of Justice Anand Byrareddy admitting BNP Paribas' winding up petition on defaults by now grounded Kingfisher Airlines, promoted by UBHL, over unpaid dues of over Rs 200 crore.