Indian banks seek bankruptcy order against Mallya

A consortium of Indian public sector banks led by State Bank of India (SBI) is back in the UK high court to seek a bankruptcy order against liquor tycoon Vijay Mallya over the alleged unpaid debt of around 1.145 billion pounds.

Judge Michael Briggs is presiding over a hearing in the insolvency division of the court in London this week in relation to a bankruptcy petition filed by the banks back in 2018 in their attempt to recoup unpaid debt accrued by the now-defunct Kingfisher Airlines.

A previous UK High Court ruling had refused to overturn a worldwide order freezing Mallya's assets and upheld an Indian court's ruling that the consortium of 13 Indian banks was entitled to recover funds amounting to nearly 1.145 billion pounds.

The banks then launched efforts to recover dues as part of the freezing order, with the bankruptcy petition aimed at seizing UK-based Mallya’s assets to recover the dues.

Besides SBI, the 13 Indian banks include Bank of Baroda, Corporation Bank, Federal Bank Ltd, IDBI Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Punjab & Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank, United Bank of India and JM Financial Asset Reconstruction Co. Pvt Ltd.

They have secured follow-on High Court orders to recover some of the funds owed to them as a result of Kingfisher Airlines' unpaid loans.

In July, the banks had won a High Court battle to access documents they were after to establish the true ownership of assets they believed were linked with the embattled liquor tycoon.

“Frankly, the answer needs to be known as to which assets are that of Mr Mallya, both for the purpose of the worldwide freezing order and enforcement of the judgment,” Justice Robin Knowles had ruled.

Two superyachts, a game reserve in South Africa, numerous undeclared high-value and vintage cars, valuable paintings and a piano previously owned by famous British singer-songwriter Elton John were among some of the assets on their target list.

The true ownership of a plush home overlooking Regent’s Park in the heart of London also remains in contention.

Mallya’s legal team has argued that the petition for bankruptcy in the UK should be dismissed because the banks are pursuing the same debt through the Indian courts.

The lawyers have also sought a stay on proceedings until Mallya’s appeal against his extradition order, scheduled in the Royal Courts of Justice in London, is heard in February next year.

Meanwhile, Mallya remains on bail pending the appeal hearing in the extradition proceedings brought by India in relation to charges of fraud and money laundering amounting to an alleged Rs 9,000 crores.

He had been arrested on an extradition warrant back in April 2017 and has been fighting his extradition in the UK courts since then.