According to PTI, the Chief Insolvencies and Companies Court in London upheld an application by a consortium of Indian banks to waive their security over the properties of fugitive liquor baron Vijay Mallya.
The consortium of 13 banks, led by the State Bank of India, has argued in favour of their right to revoke the protection they provided on Mallya’s properties. Securities or deposits are common forms of financial debt.
The consortium has been pursuing the bankruptcy warrant in the United Kingdom in order to show that the fleeing entrepreneur was bankrupt in the Insolvencies and Companies Court. This was the banks’ effort to name a bankruptcy trustee to investigate Vijay Mallya worldwide properties and recover the money owed to them.
The consortium of banks filed for bankruptcy against Mallya in December 2018, owing the banks more than Rs 9,000 crore.
Vijay Mallya lawyers have argued that the funds in question are public funds kept by Indian banks, which precludes them from granting such a protection waiver. Earlier in the proceedings, the fugitive businessman’s lawyer, Philip Marshall, cited witness statements from retired Indian judges to argue that there is public interest under Indian law because the banks are state-owned.
Judge Michael Briggs stated in his decision: “I order that permission be granted to amend the petition to read as follows: “The Petitioners banks, having the right to impose any protection kept, are willing, in the event of a bankruptcy order being issued, to give up any such security for the benefit of all the bankrupt’s creditors.”
According to PTI, the order has taken the consortium one step closer to recovering the debts. The deadline for final arguments in favour of and against granting Mallya a bankruptcy order is July 26. The date was set after the banks accused the 65-year-old businessman of attempting to postpone the matter and called for the bankruptcy petition to be dismissed.
According to PTI, Dr. Mallya should have been extradited by now, according to barrister Marcia Shekerdemian, who represents the banks. She also claimed that the fugitive businessman was denied permission to appear before the Supreme Court in May of last year, arguing against Mallya’s argument that the cases against him are politically motivated.
Mallya is currently on bail in the United Kingdom pending the resolution of a confidential legal matter in the region. This is thought to be connected to an asylum application.
Meanwhile, the consortium is pursuing a bankruptcy order. Mallya’s legal team has argued that the debt is still contested and that the pending extradition proceedings in India preclude a bankruptcy warrant from being issued in the UK.
After Mallya confirmed that he will not return, India filed an extradition request with the United Kingdom in February 2017. In July 2019, the United Kingdom High Court granted him the right to appeal his extradition order.
In January, New Delhi said the UK government told it that Mallya could not be extradited until a “confidential legal matter” concerning him was resolved. However, the UK government has declined to provide information about the proceedings or to say how long it would take to resolve the problem.
The Indian government had previously told the Supreme Court about the ongoing proceedings in the United Kingdom on two occasions, in October and November.
Mallya has consistently denied the charges against him and offered to repay the full sum lent by Kingfisher Airlines, but neither the banks nor the Enforcement Directorate have accepted the bid. He also said that the allegations levelled against him were based on a loan of just Rs 900 crore.
The debt sought by the banks consists of principal and interest, as well as compound interest at a rate of 11.5 percent per annum beginning on June 25, 2013. In India, Mallya has also filed applications to appeal the compound interest tax.