Vijay Mallya among biggest defaulters of JK Bank

SC told Mallya has left country, issues notice

New Delhi: Mr Mallya, who has allegedly escaped from the country is amongst the top defaulters of Jammu and Kashmir Bank. In late 1990s, with the help of some politicians in the state, Mallya was successfully granted Rs 100 crore loan from J&K Bank. The wine tycoon Vijay Malliya who has not yet returned that money to the Bank and has presently left the country as per SC. However, the premier State Bank had recovered the amount of 70 Cr. by selling the company shares. The share sale began in end-2012. Shares were sold in small segments over 2-3 months. But even now, the amount of Rs. 30cr still needs to be recovered.

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If the reports are to be believed, the bank is getting pressure from a Former Union Minister, to waive off loan given to Mallya.

Pic Courtesy – Reuters

The Supreme Court on Wednesday issued notice to beleaguered liquor baron Vijay Mallya on a plea by a consortium of 17 banks led by the SBI seeking his personal appearance before it along with his passport as it was told that he has already left the country.

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A bench of Justice Kurian Joseph and Justice Rohinton Fali Nariman issued notice as Attorney General Mukul Rohatgi said that Mallya left soon after the consortium moved applications on March 2 before the Bengaluru-based Debt Recovery Tribunal to restrain British liquor major Diageo from paying him $75 million.

Urging the court to ask Mallya to “appear before the court and bring his passport”, Rohatgi said that the businessman is now posting messages like “I am not an absconder. I will come and clear the dues” on his social media account

Telling the court that the banks were only interested in the recovery of loans given to Mallya’s now defunct Kingfisher Airlines, he said: “We are not after everybody. We are not after his blood.”

He said that Mallya was using one pretext or the other for avoiding the settlement of the loans and had tried to delay the proceedings before the debt recovery tribunal in Bengaluru and Goa.

He said that according to their information Mallya possesses “tremendous” movable and immovable assets in Britain that that are far in excess of the loans that he has to pay.

The notice, returnable in two weeks, will be issued to him personally, through his company United Breweries (Holding) Limited, through his lawyers who appeared for him in the Karnataka High Court and in DRT and through the Indian High Commission in London.

The notice will also be served on him on his official Rajya Sabha email ID.

The court directed the next hearing of the matter on March 30.

The bank consortium had sought the court’s order restraining Mallya from leaving the country, his arrest and impounding of his passport, and have challenged March 4 order of the Karnataka High Court not accepting their plea.

The high court instead of passing an interim order restraining Mallya from leaving the country as sough, had asked him, Diageo Holding Netherlands B.V., Diageo Holdings and United Spirits Ltd to file their objections to the banks’ plea, the banks said in their plea, adding that the high court ought to have appreciated that the plea for an interim order seeking impounding Mallya’s passport “was very urgent” as if he was to “succeed in moving away from India and settling in London”, then the purpose of the entire exercise would be defeated.

They said by way of Master Debt Recast Agreement, the existing loans were restructured and treated as a single facility on December 21, 2010,” and Mallya and United Breweries (Holding) Ltd executed a corporate guarantee and personal guarantee on the same date itself assuring the repayment of entire amount.

Since these accounts were not serviced and were declared as Non-Performing Assets, the consortium moved DRT for the recovery of the money.

Addressing the court, Rohatgi said that the secured assets which Mallya has pledged are not even one-15th of the more than Rs.9,000 crore which he had taken for his now defunct Kingfisher Airlines.

As the court asked how the banks could advance such a huge loan without matching securities and “if loans were against secured assets”, he said that they were given against the brand and logo of Kingfisher Airlines which at that point of time was huge but now has collapsed.

To this, Justice Joseph asked “if it is permissible” to advance loans against brands and logos.

Besides Jammu and Kashmir Bank, other banks who gave loans include State Bank of India, State Bank of Baroda, State Bank of Mysore, Axis Bank, Corporation Bank, the Federal Bank, Indian Overseas Bank, IDBI Bank, Punjab National Bank, Punjab and Sind Bank, UCO Bank and United Bank of India.

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