Vijay Mallya Files Petition in Karnataka High Court Demanding Accountability for Bank Loan Recoveries

Follow Us
Vijay Mallya Files Petition in Karnataka High Court for Loan Recovery Details

In a significant legal development, Vijay Mallya, the renowned liquor tycoon and former Kingfisher Airlines owner, has filed a petition in the Karnataka High Court, challenging the loan recovery process initiated by banks. Mallya claims that the amount collected by banks far exceeds his original loan of ₹6,200 crores. This article delves into the details of Mallya’s assertions, the legal proceedings that have unfolded, and the implications of this petition on the banking sector and creditors.

Background of the Loan Recovery Case

Mallya asserts that despite the banks already recovering a substantial amount from his businesses, he continues to be pursued for additional recoveries. Senior advocate Sajan Pouvaiya represented Mallya in court, stating that the Supreme Court and other judicial authorities have upheld the order for the liquidation of Kingfisher Airlines and United Breweries Holdings Limited (UBHL). Pouvaiya highlighted that the Debt Recovery Tribunal (DRT) had directed Kingfisher Airlines and UBHL to pay back the ₹6,200 crores first borrowed.

Previous Recoveries and Financial Context

According to Pouvaiya, since the decree was established in 2017, approximately ₹10,200 crores has purportedly been collected by the recovery officers, which drastically surpasses the initial debt amount. Furthermore, it has been reported in Parliament that banks have recovered as much as ₹14,000 crores. This raises questions about the necessity of continued recovery actions against Mallya, especially when substantial financial relief has already been provided to the banks.

Legal Arguments Presented in Court

The crux of Mallya’s petition is not to dispute the repayment of loans but to argue that under the Companies Act, once a debt is fully paid, the guarantor company (UBHL) should have no outstanding liabilities. To invoke the revival process, a certification from the recovery officer is required, confirming that the debts have been completely repaid. However, Mallya’s team has indicated that such certification has not yet been issued, creating ambiguity regarding the status of the original loan repayment.

Specific Demands in Mallya’s Petition

In his petition, Mallya has requested several key pieces of information from the banks:

  • A detailed account of the amounts recovered by the banks following a modified recovery certificate issued by the DRT on April 10, 2017.
  • Information regarding the original owners of the assets that were utilized for these recoveries.
  • A record of any properties linked to Mallya, UBHL, or third parties that are currently held by the banks but have not yet been used for loan recovery.

Additionally, Mallya seeks an interim relief that prohibits the banks from selling any assets in the future under the modified recovery certificate.

Conclusion: Implications and Future Developments

This legal battle not only pertains to Vijay Mallya’s personal financial troubles but also poses broader implications for the banking industry and creditor-debtor relations in India. As the Karnataka High Court has instructed the banks to file their response by February 13, the banking sector will closely watch these developments, as outcomes could set precedents for future recovery actions against defaulters.