Court Orders Issue of Notice to Vijay Mallya in Loan Default Case
Bengaluru: The Karnataka High Court on Saturday ordered issue of notice to liquor baron Vijay Mallya, his defunct Kingfisher Airlines and nine other respondents on a petition filed by bankers, including State bank of India, seeking his arrest and impounding of his passport for defaulting on loans.
The notice, issued by Justice A S Bopanna, came even as the Debt Recovery Tribunal reserved its order on one of the four applications filed by SBI seeking securing of the lenders' first right on the $75 million (Rs 515 crore) payout from Diageo to Mr Mallya.
Thirteen bankers including SBI approached the high court seeking arrest of Mr Mallya and impounding of his passport along with two other pleas after they moved the tribunal to take up their pleas on a priority basis.
The top state-run lender has approached the Debt Recovery Tribunal seeking action against the UB Group promoter for defaulting on loans.
SBI, which heads a consortium of 17 lenders to the grounded Kingfisher Airlines, had moved the tribunal here against the airline's chairman, Mr Mallya, in its bid to recover over Rs 7,000 crore due loans from him.
Debt Recovery Tribunal judge Benakanahalli, on a priority basis, took up the application for securing a first right on the $75 million severance package that Mr Mallya will be getting for quitting Diageo-owned United Spirits Ltd (USL) as its chairman last week under a sweetheart deal.
The judge said the other three applications - seeking impounding of Mr Mallya's passport, getting him arrested and getting full disclosure of his assets in the country and abroad - would be heard later.
"For now, I am taking up the application seeking to secure lenders' first right on the payout from Diageo and getting full disclosure of his assets in the country and abroad on priority basis. I will take up other applications later," he said.
After filing objections before DRT, Uday Holla, Mr Mallya's counsel, submitted that $75 million could not be attached because his client was getting the severance package after signing a non-compete agreement under which Mr Mallya would not enter liquor business for the next five years.
On the application seeking Mr Mallya's arrest, Mr Holla said such an action would tantamount to demeaning the institution of Rajya Sabha because he is a "respected member" of the upper house of Parliament.
