Trouble mounts for Vijay Mallya; DRT allows banks to recover Rs 6,203 crore from liquor baron in unpaid dues

The Debt Recovery Tribunal (DRT) on Thursday allowed bankers to start proceedings to recover Rs 6,203 crore debt from liquor baron Vijay Mallya.

Published: January 19, 2017 12:39 PM IST

By India.com News Desk

Trouble mounts for Vijay Mallya; DRT allows banks to recover Rs 6,203 crore from liquor baron in unpaid dues

New Delhi, Jan 19: The Debt Recovery Tribunal (DRT) on Thursday allowed bankers to start proceedings to recover Rs 6,203 crore debt from absconding liquor baron Vijay Mallya. The Bengaluru bench of the Tribunal also ordered attachment and recovery of industrialist Vijay Mallya’s properties for defaulting on bank loans by his defunct Kingfisher Airlines Ltd.

“The Tribunal has allowed our petitions against Mallya’s Kingfisher and issued an order to attach their properties for recovering the amount (Rs.6, 203 crore) with interest,” counsel for the consortium told reporters here. The Debt Recovery Tribunal said properties of Vijay Mallya and Kingfisher worth Rs.6,203 crore plus interest at 11.5 per cent from July 26, 2013 can be recovered by a consortium of banks led by State Bank of India (SBI).

DRT had been conducting hearings from the current building since December 1994, and is the oldest tribunal in South India. Initially, DRT Bengaluru handled cases of Karnataka, Kerala, Tamil Nadu, Andhra Pradesh and Puduchery, but gradually its burden lessened after respective states had its own DRTs.

The tribunal spent over Rs two crore for renovation of the rented space, according to a top DRT official. The lenders had moved the DRT in 2013 to recover dues from the defunct airline. SBI had filed three other applications also, including one seeking Mallya’s arrest and impounding his passport, for “defaulting” on loans. Mallya, who left the country on March 2 last year and is now in the UK, has been declared Proclaimed Offender by a special PMLA court in Mumbai on a plea of Enforcement Directorate in connection with its money laundering probe against him in the alleged bank loan default case. During the prolonged hearing, the DRT had disposed some of the IAs filed by either side.

The DRT had on March 7 last year, restrained Mallya from withdrawing USD 75 million exit payment from British liquor giant Diageo as part of a severance package for quitting Diageo-owned United Spirits (USL) as its Chairman under a “sweetheart deal”. However, on July 13, the tribunal ruled that the order had become “infructuous” as USD 40 million had already been transferred prior to the March 7 directive. Later, passing orders on another IA, the tribunal had directed Diageo Plc to deposit with it the remaining USD 35 million of the “sweetheart deal”.

The DRT had on July 16 allowed another IA of the bankers for lifting of corporate veil to pierce the protection against personal liability enjoyed by individuals controlling Kingfisher Finvest, a holding company of Mallya. It had also dismissed the IA filed by Dutch beer major Heineken seeking impleadment in the Mallya case to enjoy Right of First Refusal over UBL shares. Heineken has some presumptive rights on UBL shares held and owned by Mallya. (With PTI inputs)

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