Vijay Mallya gets 4-month jail term in contempt case

Updated on Jul 12, 2022 06:00 AM IST

Vijay Mallya did not show any remorse, nor tendered an apology for his contumacious conduct, the Supreme Court noted on Monday as it sentenced the liquor baron to four months in jail in a 2017 contempt of court case for not honestly disclosing his assets and secretly transferring $40 million to his three children

SC has directed Vijay Mallya and his children to deposit $40 million, along with an annual interest at the rate of 8%, with the recovery officer within four weeks, failing which the court said, authorities can take all appropriate steps to retrieve the money. (REUTERS)
SC has directed Vijay Mallya and his children to deposit $40 million, along with an annual interest at the rate of 8%, with the recovery officer within four weeks, failing which the court said, authorities can take all appropriate steps to retrieve the money. (REUTERS)
By, New Delhi

Vijay Mallya did not show any remorse, nor tendered an apology for his contumacious conduct, the Supreme Court noted on Monday as it sentenced the liquor baron to four months in jail in a 2017 contempt of court case for not honestly disclosing his assets and secretly transferring $40 million to his three children.

A bench, headed by justice Uday U Lalit, also directed Mallya and his children to deposit $40 million, along with an annual interest at the rate of 8%, with the recovery officer within four weeks, failing which the court said, authorities can take all appropriate steps to retrieve the money. The recovery officer was appointed by the debt recovery tribunal at Bengaluru after consortium of creditors, led by State Bank of India, sought return of the loans advanced to Mallya and his Kingfisher Airlines.

“In order to maintain the majesty of law, we must impose adequate punishment upon the contemnor (Mallya) and must also pass necessary directions so that the advantages secured by the contemnor or anyone claiming under him are set at naught and the amounts in question are available in execution of the decrees passed in the concerned recovery proceedings,” held the bench, which also included justices S Ravindra Bhat and PS Narasimha.

Mallya is currently in the UK, where he is fighting his extradition to India. Although he has exhausted all legal options, people familiar with the matter said he is believed to have applied for asylum in the UK.

Apart from Mallya, the court order makes his son Siddhartha and daughters Leena and Tanya also liable to deposit $40 million, along with interest. Mallya, who fled to UK in 2016 following the charges of bank loan default to the tune of over 9,000 crore associated with the collapse of his Kingfisher Airlines in 2012, is an NRI while his children and estranged wife are US citizens.

The court also imposed a fine of 2,000 on Mallya, the maximum under the Contempt of Courts Act. “In case the amount of fine is not deposited within the time stipulated, the contemnor (Mallya) shall undergo further sentence of two months,” added the court. The Act prescribes a maximum punishment of six months in jail along with a fine that can go up to 2,000.

In its judgment, the court remained mindful that Mallya was elusive since 2016 and chose not to show up in court during the contempt proceedings despite several reminders. The bench, thus, directed the Union ministry of home affairs to make attempts to quickly secure the presence of Mallya in India to undergo the jail term.

“The Government of India, including the ministry of external affairs and all other agencies or instrumentalities, shall carry out the directions issued by this court with due diligence and utmost expediency,” stated the bench, while further directing the Centre to submit a compliance report regarding Mallya’s extradition to India.

Mallya was held guilty of contempt of court by an order in May 2017 for wilful disobedience of its order to come clean on all his assets and not disclosing $40 million he had received from British liquor major Diageo Plc, which now controls United Spirits, following his resignation as Chairman of the latter in February 2016. The money Mallya received from Diageo was transferred to his three children within a week of receiving it. The consortium of creditors brought the contempt charge against Mallya. His plea to reconsider the conviction under the contempt charge was also dismissed by the apex court in August 2020.

Mallya faces a raft of charges relating to financial irregularities at Kingfisher Airlines. He is also being investigated by the Central Bureau of Investigation and the Enforcement Directorate for alleged financial crimes. He denies “fleeing” from India and claims he made an “unconditional” offer to pay back the sum in full.

Following the conviction, the top court had directed Mallya’s presence to proceed with the contempt case and deliver the punishment. However, the matter was forced to be adjourned several times owing to his unavailability.

The Union government informed the court last year that “confidential” proceedings of an undisclosed nature were stalling the liquor baron’s extradition from the UK even though Mallya has exhausted all avenues of appeal against the first order of his extradition in 2018. At the same time, solicitor general Tushar Mehta and advocate Rajat Nair, appearing for the Centre, pressed for exemplary punishment to Mallya for his wilful non-participation before the Supreme Court.

Senior advocate Jaideep Gupta, who was appointed in November 2021 as amicus curiae to assist the court, suggested that the matter should proceed as Mallya has sufficient knowledge about the contempt proceeding.

Meanwhile, Mallya’s lawyer Ankur Saigal told the Supreme Court earlier this year that the fugitive businessman has informed him about the secret proceeding initiated with the UK government against the 2018 order by a London court to extradite him. Saigal, however, could not provide any information about the nature of proceedings and the relief sought in the pending proceedings in the UK. He also submitted that the legal team did not have any further instructions from Mallya on the merits of the contempt case.

At this, the bench noted that Mallya’s letter disclosed that he was aware of the proceedings before the Supreme Court and therefore, the matter could be taken to a logical conclusion. Following all the submissions, the court had on March 310 reserved its judgment on the quantum of punishment to be delivered to Mallya.

On December 10, 2018, the Senior District Judge Westminster Magistrate’s Court, London recommended Mallya’s extradition to India. Mallya appealed the order of his extradition before the High Court of London. The appeal was admitted on the sole ground of sufficiency of prima facie case. But the High Court of London dismissed the appeal on April 20, 2020. Mallya applied leave to appeal to the Supreme Court but on May 14, 2020, the High Court of London rejected his application for permission to appeal.

The Centre informed the Supreme Court in November 2021 that the UK side has informed that Mallya’s extradition cannot take place until a separate legal issue, which is judicial and confidential in nature is resolved. According to the Centre’s affidavit, the UK side further said that this issue is outside and apart from the extradition process, but it has the effect that under the United Kingdom law, extradition cannot take place until it is resolved.

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