Bombay High Court Seeks Clarity on Vijay Mallya’s Debt Settlement
On August 12, the Bombay High Court directed the State Bank of India (SBI) and the Enforcement Directorate (ED) to verify whether Vijay Mallya’s financial obligations have been settled through the sale of his attached movable properties. The directive from Justice Milind Jadhav was issued after Mallya’s legal representative contended that the debts have been cleared using the funds from assets seized by the ED. The case in question is Vijay Vittal Mallya v. State Bank of India & Ors.
The court was reviewing a criminal petition filed by Mallya in 2020, which challenges a 2019 special court order. Mallya is embroiled in allegations of money laundering, with accusations of diverting at least ₹3,500 crore from a ₹9,000 crore loan meant for his now-defunct Kingfisher Airlines. The ED, acting under the Prevention of Money Laundering Act (PMLA), had provisionally attached Mallya’s properties in 2016.
Assets Utilized for Debt Recovery
In 2019, a special court allowed SBI and other lender banks to use Mallya’s movable properties, attached by the ED, for debt recovery. Among the assets were shares in United Breweries Holdings Ltd. Mallya contested this in the High Court in 2020. Despite the petition being filed in January 2020, the High Court only commenced hearings on August 12, 2023.
Senior Advocate Amit Desai, representing Mallya, argued that the petition had become obsolete due to recent developments. He asserted that the ED had recovered funds from the assets, which were utilized to settle the loans.
The court order noted Desai’s submission, stating, “He has emphatically submitted that Mallya’s civil liabilities have effectively been settled by mentioning that the consortium of banks have recovered approximately ₹15,000 crores from the applicant when compared with the original claim of ₹6,203 odd crores including interest.”
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Verification Required Before Further Action
Justice Jadhav underscored the necessity of verifying these claims with the relevant authorities before proceeding. “It would be appropriate at this juncture to issue notice only to SBI (lead bank) and Deputy Director, Directorate of Enforcement in order to apprise the Court about the aforesaid submissions made by Desai and further development in the case,” the court stated.
The court clarified its stance by indicating that further actions would be determined post-consultation with Respondent No. 13. Justice Jadhav also granted Mallya the permission to submit an additional affidavit outlining the developments since the 2020 application.
The court is scheduled to hear the plea again on September 9. Advocates Amit Desai and Rashmin Jain represented Mallya, while Additional Public Prosecutor Rajeshree V Newton appeared for the State.
