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DRT reserves order on banks' plea to recover over Rs 9,000 crore from Mallya

The Debt Recovery Tribunal in Bengaluru has reserved its order on the pleas of SBI-led consortium of banks for recovery of over Rs 9,000 crore from beleaguered liquor baron Vijay Mallya in the Kingfisher Airlines case. DRT Presiding Officer K Srinivasan in a recent directive, reserved orders on the Original Application (OA) filed by the consortium and also 30-odd Interlocutory Applications, including several by Mallya and his companies, without specifying any date, a DRT official said on Tuesday.

This brings the curtains down on nearly three-year legal battle in the tribunal by the consortium comprising 17 banks to recover the money owed by the defunct airlines. The lenders had moved the DRT in 2013 to recover dues on 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 $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 last, the tribunal ruled that the order had become “infructuous” as $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 $35 million of the $75-million ‘sweetheart deal’. The DRT had on July 16 last 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 (ROFR) over UBL shares. Heineken has some presumptive rights on UBL shares held and owned by Mallya.