A year since the trial began, the Westminster Magistrates’ Court in London on Monday will deliver its verdict on whether beleaguered liquor baron Vijay Mallya can be extradited to India to face charges of fraud and money laundering amounting to Rs 9,000 crore. A joint team of CBI and ED, led by CBI Joint Director A Sai Manohar, has left for the UK to attend the court proceedings. Earlier, special joint director Rakesh Asthana, who has been sent on leave, was leading the case.
The 62-year-old former Kingfisher Airlines chief has been on bail since his arrest on an extradition warrant in April last year. Mallya, who has been living in Britain since March 2016, has contested his extradition on the grounds that the case against him was “politically motivated” and the loans he has been accused of defrauding on were sought to keep his now-defunct airline afloat.
During the hearing in the court of Judge Emma Arbuthnot, Mallya’s defence team led by Clare Montgomery alleged that the CBI had been “forced to file charges”, referring to a newspaper report against Asthana, which had claimed that he influenced the heads of the state-run banks and threatened them with reprisals if action was not taken against the businessman.
Mallya offers to pay 100% of debt to banks
However, days before his extradition hearing, Mallya offered to pay “100 per cent” of the principal amount he owed to a consortium of 17 banks led by State Bank of India, which alone had an exposure of Rs 1600 crore.
“I did not borrow a single rupee. The borrower was Kingfisher Airlines. Money was lost due to a genuine and sad business failure. Being held as guarantor is not fraud. I have offered to repay 100 per cent of the principal amount to them. Please take it,” the flamboyant businessman tweeted on Wednesday.
The extradition trial, which began at the Magistrates’ Court on December 4 last year, has gone through a series of hearings beyond the initial seven days earmarked for it. Only one person has ever been extradited from the UK to India under the extradition treaty between the two countries signed in 1993. Samirbhai Vinubhai Patel, wanted in a case related to the 2002 Gujarat riots, was extradited in October 2016.
Trial went on for a year
The Crown Prosecution Service (CPS) team, led by Mark Summers, representing the Indian government, said there was a prima facie case of fraud and money laundering against Mallya. It argued that Mallya had intended, “from the outset”, never to repay the loans he sought for his struggling airline and misrepresented its profitability.
Countering the charge, Mallya’s defence team told the court that the consortium of banks rejected an offer by the liquor baron in early 2016 to pay back nearly 80 per cent of the principal loan amount owed to them. They also deposed a series of experts in an attempt to prove that the erstwhile Kingfisher Airlines’ alleged default of bank loans was the result of business failure rather than “dishonest” and “fraudulent” activity by its owner.
“There are clear signs that the banks seem to have gone against their own guidelines (in sanctioning some of the loans),” Judge Arbuthnot had noted during the course of the trial.
Jail conditions a flashpoint
Barrack 12 at Arthur Road Jail in Mumbai, where the businessman is to be held if he was to be extradited to India, was also a bone of contention between the prosecution and defence. Mallya’s lawyers had opposed his extradition on the ground that a barrack within the compound walls of the jail would not get enough natural light. They also raised the issue of overcrowding in Indian jails and of security.
Based on their plea, the UK Court on July 31 had asked CBI to send a video of the barrack where Mallya would be lodged. In August, the CBI team sent a video of the barrack, showing that Mallya will not only have access to natural light with large windows but will also get to stroll in a courtyard. He will have a private toilet and even a TV, besides getting access to the jail library.
However, Mallya’s lawyers rubbished the video, saying the barrack was freshly painted to give the perception of brightness that did not exist.
Met Jaitley before leaving India: Mallya
On September 12, during the hearing of his case, Mallya told reporters that he left India after meeting Finance Minister Arun Jaitley in 2016, which the minister called “factually false”.
“I had a scheduled meeting in Geneva. I met the Finance Minister before I left… repeated my offer to settle with the banks. That is the truth,” Mallya had said. The liquor baron also pointed out that for three decades by running India’s largest alcoholic beverage group, he contributed thousands of crores to the state exchequers.
What happens after extradition?
“If the judge is satisfied that all of the procedural requirements are met and that none of the statutory bars to extradition apply, he or she must send the case to the Secretary of State for a decision to be taken on whether to order extradition,” PTI quoted Pavani Reddy, a UK-based legal expert and Managing Partner of Zaiwalla & Co, as saying.
The judge’s decision on whether to send Mallya’s case to UK Home Secretary Sajid Javid can be appealed in the UK High Court. The person to be extradited is entitled to make an application for permission to appeal to the High Court within 14 days of the date of the Magistrate’s ruling.
On the other hand, the Indian government would also have 14 days to file leave to appeal to the High Court, seeking permission to appeal against a decision not to extradite. “In case the concerned individual does not file an appeal, and Secretary of State agrees with the magistrate’s decision, then the individual must be extradited from the UK within 28 days of the Home Secretary’s extradition order,” Reddy said.