K’taka HC sends notices to banks on Mallya’s debt recovery claims

Justice R Devdas issued a notice to banks in response to the petition filed by Mallya on February 3, directing them to respond by February 13.

The Karnataka high court on Wednesday issued a notice to banks on a petition filed by fugitive businessman Vijay Mallya, who sought a statement detailing the outstanding dues of him, United Breweries Holdings Limited (UBHL, now in liquidation) and other certificate debtors, claiming that the ₹6,200-crore debt he owed to banks has been recovered “multiple times over”.

Vijay Mallya, a former liquor baron, is currently in the UK and efforts by the Indian government to secure his extradition have ended in a naught as he is believed to have applied for asylum in Britain (REUTERS)

Justice R Devdas issued a notice to banks in response to the petition filed by Mallya on February 3, directing them to respond by February 13. The petition, as an interim relief, also sought a stay on any further asset sales by banks under the amended recovery certificate until clarity is provided on the full settlement of the debt.

Senior advocate Sajan Poovayya, representing Mallya, contended that the debts had already been recovered, yet additional recovery proceedings continued against his client.

“Parallelly there was a debt recovery proceeding, in that a sum of ₹6,200 crore was ordered to be paid by the primary debtor Kingfisher (Airlines) and the UBHL which was the guarantor,” Poovayya told the court, as reported by LiveLaw.

“That order also attained finality. However, between 2017 and now, the ₹6,200 crore has been recovered multiple times over. According to an admitted statement, as of today, the recovery officer confirms that ₹10,200 crore has been recovered. Additionally, the official liquidator states that the banks have regained their dues, and even the (Union) finance minister informed Parliament that ₹14,000 crore has been recovered,” the lawyer added.

He clarified that the petition does not dispute the repayment of loans, but argues that under the Companies Act, once the debt is fully repaid, the guarantor company (UBHL) has no remaining liability and can seek revival. This process, however, requires a certification from the recovery officer confirming that the debt has been fully settled, which has not yet been issued.

The plea urged the banks to provide a statement detailing the amounts recovered in their favour, along with information about the original owners of the assets used to generate these recoveries, following the amended recovery certificate issued by the DRT on April 10, 2017.

Mallya, a former liquor baron, is currently in the UK and efforts by the Indian government to secure his extradition have ended in a naught as he is believed to have applied for asylum in Britain. Mallya had fled to the UK in 2016 before recovery proceedings against him were initiated by banks. He holds a British citizenship.

“…Unless the ED (Enforcement Directorate) and Banks can legally justify how they have taken more than two times the debt, I am entitled to relief which I will pursue,” Mallya posted on X on December 18 last year.