No stay on confiscation of Vijay Mallya’s Indian assets
The judges asked as to how Mallya was aggrieved by the confiscation when his creditors and banks should have been more concerned with the attached assets in order to secure their dues.Updated: Apr 24, 2019 23:53 IST
The Bombay high court on Wednesday refused to stall the confiscation of the Indian assets of fugitive businessman Vijay Mallya, whose lawyer argued that the seizures were nothing short of an “economic death penalty.”
Mallya, 63, has challenged in the court the constitutional validity of some sections of the Fugitive Economic Offenders (FEO) Act, 2018, on grounds that the legislation was a draconian law that contained provisions that were disproportionately drastic.
His counsel, senior advocate Amit Desai, sought a stay on the confiscation of Mallya’s assets by way of interim relief. All assets of the former liquor baron, who flew to the UK in March 2016 as creditors of his defunct Kingfisher Airlines closed in on him to recover Rs 9,000 crore owed by the carrier, are under attachment.
Desai submitted that the FEO Act provides for drastic measures like the vesting of all assets of a person with the Union of India on a mere declaration of the person as a fugitive offender by the Special Prevention of Money Laundering Act Court.
The only stipulation is that the alleged fugitive offender should have left the country and a warrant is issued by a court against the person, Desai said.He added tha on confiscation, the assets will vest with the central government and there was no provision in the Act to bring the assets back and clear the legitimate dues of creditors, claimants and victims of the purported crime. Thus, he said, “while debts of the person remain unpaid and the interest meter keeps running against him for the rest of his life, all his assets, legitimate or illegitimate, are gone and there is nothing left for him to clear the debts.”
Desai urged the court to stay the confiscation, saying even otherwise all the assets owned by Mallya and a number of entities linked to him were under attachment and will continue to be under control of agencies like the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED), which are probing cases against Mallya.
The judges asked as to how Mallya was aggrieved by the confiscation when his creditors and banks should have been more concerned with the attached assets in order to secure their dues.Desai replied that the assets continue to be owned by Mallya until the banks establish their claims.
Advocate DP Singh, who appeared for the ED, opposed the plea. Singh said for every action ED is required to obtain permission from the special court. Even the confiscation will be done on orders of the special court and the court may not order confiscation of all his assets or may simply refuse permission to confiscate the assets. And then, he added, all these orders are subject to appeal and a confiscation order can be challenged before the high court. The division bench of Justice Ranjit More and Bharati Dangre accepted Singh’s arguments and rejected Mallya’s plea for a stay on the confiscation of assets. The court posted the petition for further hearing on June 24.
In the UK, the Indian government is seeking Mallya’s extradition to India to face trial.This month, a judge in the appeals court of the high court rejected Mallya’s application for permission to appeal against home secretary Sajid Javid’s February 4 order to extradite him to India. Further options before Mallya include approaching the Supreme Court, which usually grants permission to appeal if a case involves a matter of public interest; and submitting a representation to the home secretary.
First Published: Apr 24, 2019 23:53 IST