In a significant legal setback for Vijay Mallya, the former head of India’s United Breweries and United Spirits, a London High Court has upheld a bankruptcy order against him concerning a staggering debt exceeding 1 billion pounds (approximately $1.28 billion) owed to a consortium of Indian banks, including the State Bank of India (SBI). This ruling, delivered on April 9, 2025, marks a key moment in Mallya's protracted legal battle following the collapse of his Kingfisher Airlines in 2012.
Judge Anthony Mann ruled in favor of the banks, confirming the legitimacy of the bankruptcy order while dismissing Mallya's appeals. The court's decision comes after a hearing held in February 2025, where Mallya's legal team argued that the banks had already recovered assets equivalent to the debt amount. However, Judge Mann stated, "The bottom line ... is that the bankruptcy order stands." This ruling signifies that Mallya's financial obligations remain intact despite his claims of asset recoveries.
The legal saga traces back to 2017, when a group of banks secured a judgment against Mallya in India, amounting to over 1 billion pounds. This judgment was registered in the UK later that year, leading to the bankruptcy order issued against him in 2021. Mallya's legal troubles have been compounded by his status as a fugitive; he fled to the UK in 2016 to avoid arrest and has been convicted of fraud and money laundering in India.
During the February hearing, Mallya's lawyers contended that the banks had effectively settled the debt through asset recoveries, citing that Indian financial authorities had seized properties worth approximately ₹14,131.6 crore (around $1.7 billion), significantly exceeding the debt owed. However, the court found that these claims did not absolve Mallya of his bankruptcy status.
In his ruling, Judge Mann acknowledged the ongoing complexities surrounding Mallya's legal situation, particularly regarding his extradition to India. Mallya is facing serious fraud charges linked to the collapse of Kingfisher Airlines and has been contesting his extradition since 2020. The judge noted that the extradition order "has still not been enforced" and remarked that Mallya is still resisting extradition on other bases that remain unresolved.
As a former co-owner of the Formula One team Force India, Mallya's high-profile case has attracted significant media attention. His legal team has indicated that they will continue efforts to overturn the bankruptcy order, underscoring the ongoing nature of this legal battle. Mallya's situation reflects broader issues within India's financial sector, particularly concerning the accountability of corporate leaders and the recovery of bad debts.
The implications of this ruling extend beyond Mallya himself. With the bankruptcy order upheld, creditors, including Diageo and United Spirits, are now positioned to pursue Mallya for outstanding debts related to alleged illegal activities while he was still running United Spirits. Combined, these creditors claim he owes them around £250 million for breaches of agreements following Diageo's takeover of United Spirits in 2012 and 2013.
As the legal proceedings continue, Mallya's case serves as a cautionary tale about the risks associated with corporate governance and financial oversight in India. The outcome of his ongoing appeals and potential extradition will likely set significant precedents for similar cases in the future.
Overall, this ruling not only reinforces the legal responsibilities of corporate executives but also highlights the challenges faced by banks and financial institutions in recovering debts from high-profile individuals.
