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Kingfisher Airlines application: DRT may pass order today

business Updated: Jul 07, 2016 11:44 IST
Beena Parmar
Beena Parmar
Hindustan Times
Kingfisher Airlines

A sign at the closed Kingfisher Airlines booking counter at the city airport in Mumbai.(HT Archive)

The Debt Recovery Tribunal may pass orders on July 7 on an application by Kingfisher Airlines seeking amendment to its earlier written reply to the original application (OA) filed by a consortium of banks in the Vijay Mallya case.

Kingfisher, in its amendment application, has sought about Rs 3,000 crore from banks which it claims was to be given to it for proposed projects as per the agreement. Kingfisher’s counsel had said that it had incurred about Rs 3,000 crore loss as banks had not lent them money for new projects, which they should have as per the agreement. Hence, the airline said it had introduced the amendment application.

The debt laden group company Kingfisher Airlines, promoted by Mallya, owes over Rs 9,000 crore including principal loan, interest and penalties to a consortium of 17 banks led by SBI.

Meanwhile, Mallya moved to England in March and the government is using diplomatic and legal means to bring him to back to India to face proceedings against him. Mallya has been termed a ‘wilful defaulter’ by three banks including SBI, Punjab National Bank and United Bank of India.

Quoting from earlier Supreme Court orders, Kingfisher Airline, in its arguments on Wednesday, pleaded to allow the application to meet justice, reports said. The DRT Presiding Officer has posted the matter for next hearing today on July 7.

Further, this application should be allowed in the interest of justice as there were the Supreme Court’s directions. “Allowing an amendment application is a rule and disallowing it amounts to a case of exception,” the airline said.

While bankers’ counsel hoped that the application may not be allowed ‘according to its (airline’s) whims and fancies’ and that the limitation period of the right to claim amendment had elapsed.

Countering Kingfisher’s submissions, he said indiscreet filing of stamp duty papers by banks cannot be considered as a premise to allow Kingfisher’s amendment application, reports further said.

In another development last week, Mint reported that executives of Kingfisher Airlines have informed authorities that its accounting books have gone missing after a vendor took away computers and servers that had stored the financial accounts related to non-payment of dues.

SBI and banks have been fighting more than 20 legal disputes in various courts and legal agencies, including the Supreme Court of India and Debt Recovery Tribunals related to the airline, with more than 500 hearings so far. The banking consortium had already sold shares of the defunct airlines for Rs 550 crore in 2013.

Banks are also in the process of auctioning the airline’s headquarters – Kingfisher House, the airline’s brands and logos and Mallya’s private aircraft to recover the dues.