Updated: March 10, 2016 5:46:14 pm
THE Supreme Court Wednesday questioned public sector banks (PSBs) over advancing loans to Vijay Mallya, the founder-owner of Kingfisher Airlines, and his companies without securing enough assets in guarantee. It also issued a notice to Mallya who flew out of India on March 2, the day the banks sought the impounding of his passport as part of loan recovery proceedings.
When asked by a bench of Justices Kurian Joseph and Rohinton F Nariman, Attorney General Mukul Rohatgi said, “I have checked with the CBI. He (Mallya) left the country on March 2, the day we moved our application before the Debts Recovery Tribunal for impounding his passport… he has tremendous assets in the UK. So in all likelihood, he should be there. He has also been tweeting from there and says he is not an absconder. So he should be called here.”
Rohatgi requested the bench to issue an order summoning Mallya to the top court and deposit his passport till the recovery proceedings were underway. But the bench said it would first issue a notice to Mallya and wait for his response.
“At this stage, we will issue a notice to him and his company. You serve notice and we will see on the next date what happens. You ask him to appear,” said the bench while posting the matter for another hearing on March 30.
Arguing on behalf of a consortium of 17 PSBs, Rohatgi began by pointing out that properties collateral as security for loans to Mallya and his companies were “very meagre”. “It (assets secured as guarantee) could be around one-tenth of the total loans, which is more than Rs 9,000 crore,” he said.
This submission prompted the bench to ask, “How did you (banks) give him loans when the total amount secured by you was only one-tenth of total value of the loans? Why was it not a secured loan? We will have to see if it is allowed. You gave loans even though you say only 10 per cent of assets were secured against the loan amount.”
Accepting that the majority of the loan was “unsecured”, the Attorney General argued that money was also given based on the worth of the brand and logo, and that they could not have foreseen that Kingfisher Airlines would fold up. “But I must also say that total value of his assets, including what he owns in foreign countries, is more than his total loan amount here,” he added.
The bench, however, underlined that if assets were not within the territorial jurisdiction of Indian courts, recovery through attachment of properties would be very difficult.
The AG also said: “We want to tell him (Mallya) that we are not after his blood. We want to sit across the table with him and discuss modalities of recovery.”
On Rohatgi’s suggestion, the bench issued notice to Kingfisher Airlines through Mallya and United Breweries while also allowing the banks to serve a notice on him electronically on his official email id as Rajya Sabha MP. The court also let the PSBs serve notice on the Airlines and Mallya through his lawyers.
On Tuesday, the SBI-led consortium of seventeen banks had moved the court to restrain Mallya as they feared he would fly to London to frustrate the loan recovery proceedings.
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines
- The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.