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Mallya objects to SBI plea for arrest in debt case

Mallya’s lawyer tells tribunal that this is not the forum for seeking action such as arrest or impounding of passport. Next hearing on Friday

business Updated: Mar 03, 2016 20:23 IST
Vijay Mallya,Diageo,State Bank of India
SBI wants to have the first right over the $75 million that Diageo is paying to Vijay Mallya to settle its disputes with the former ‘King of Good Times’.(AFP photo)

Industrialist Vijay Mallya on Thursday objected to the State Bank of India’s (SBI) interlocutory application before the Debt Recovery Tribunal, seeking his arrest in the Kingfisher Airline’s multi-crore loan default case.

“We have filed our objections against the bank’s IA on the ground that it (tribunal) is not the forum to seek a defaulter’s arrest or impound his passport,” Mallya’s counsel said here.

The IA also sought a directive from the tribunal to the authority concerned for impounding Mallya’s passport, evaluate his assets and claim on the $75 million (Rs 516 crore) severance package that British liquor major Diageo and its Indian arm United Spirits Ltd (USL) signed with him on February 25 here.

Tribunal judge R Benkanahalli posted the IA to Friday for the next hearing and gave notice to Mallya for filing objection, if any, after the bank counsel’s arguments on Wednesday.

“The quasi-judicial tribunal is meant to facilitate banks and financial institutions recover speedily outstanding loans and avoid procedural delays in civil courts,” Mallya’s counsel said.

CBI director Anil Sinha had expressed concern over banks’ delay in acting against Mallya at the seventh CBI conference on combating financial crimes on Wednesday in Mumbai.

“We had recently (July 2015) registered a case of cheating and fraud against Kingfisher and its erstwhile management involving allegations of defrauding banks up to Rs.7,800 crore, borrowed as loans/advances by the bankrupt airline during 2004-2012,” Sinha recalled at the day-long conference, organised by the CBI in partnership with Indian Banks’ Association (IBA).

Observing that there was a growing sense of anguish among the public over increasing bad loans as non-performing assets, Sinha said while banks were strict on retail borrowers, the big borrowers and large-scale fraudsters were able to not only evade the law, but also enjoy the fruits of crime.

“Undue delay in identifying and reporting such a fraud has jeopardised the cause of justice to the offenders benefit, giving them opportunity to divert funds and destroy evidence,” Sinha said.

Read: Banks delayed in declaring Kingfisher as defaulters: CBI

First Published: Mar 03, 2016 20:22 IST