SBI wants Vijay Mallya arrested, passport impounded
The banks are apparently trying to force the former Kingfisher Airlines chairman to the negotiating table. But will the move yield the desired results?
The Delhi high court refused on Thursday to hear a plea by businessman Vijay Mallya against State Bank of India (SBI) terming him a “wilful defaulter” and asked him to approach an appropriate forum.
SBI has moved four applications against the UB Group promoter before the Debt Recovery Tribunal (DRT), seeking the first right on the $75 million (about Rs 500 crore) severance package that Mallya will get from Diageo, the UK-based liquor major that has taken control of Mallya’s flagship United Spirits.
Read more: Vijay Mallya’s only regret: Kingfisher not flying when oil is cheap
SBI declared Mallya and his company United Breweries Holdings Ltd (UBHL) wilful defaulters in late 2015 after a protracted legal battle over nonpayment of dues of over Rs 7000 crore owed by his now-defunct Kingfisher Airlines.
Sensing the mood of the court, Mallya’s counsel requested justice Rajiv Sahai Endlaw to allow them to withdraw their petition including one filed by UBHL.
The court allowed Mallya’s request, made through senior advocate Rajiv Nayar, while giving them the liberty to approach an appropriate court for remedial measures, if available under law.
Mallya moved to the high court, arguing that it has jurisdiction to hear his plea as he is a resident of Delhi and also a Rajya Sabha member and has received all the correspondence here.
He alleged that the decision of SBI’s grievance redress committee denying legal representation at a hearing held by the bank on October 29, 2015 while declaring him and UBHL as wilful defaulters is purportedly illegal.
The court said it cannot have two different benches hearing the same matter.
“The Bombay high court has earlier heard it. This should also be before that court only. What’s the problem,” the court asked.
The top state-run lender had on Wednesday sought arrest of Mallya, and asked for his passport to be impounded. A consortium of 17 banks also approached the Bangalore Debt Recovery Tribunal (DRT) seeking action against the UB Group promoter for defaulting on loans. It has also sought full disclosure of the industrialist’s assets.
Read: Banks delayed in declaring Kingfisher as defaulters: CBI
Read: Vijay Mallya walks into the sunset with $75-mn retirement fund
The immediate objective of the lenders moving the DRT is to secure a first right on the US$75-million severance package that Mallya will be getting for quitting Diageoowned United Spirits (USL) as its chairman.
As part of the deal, Diageo said it would pay US$40 million immediately to Mallya with the balance being payable in equal instalments over the next five years. It will also absolve Mallya of all liabilities over alleged financial lapses at the company founded by his family.