BENGALURU: Vijay Mallya, the former chairman of United Breweries, has made headlines once again as he approached the Karnataka High Court on Wednesday seeking clarification on the loan recovery details from banks related to Kingfisher Airlines. Mallya, who currently resides in the UK, has been embroiled in legal battles since fleeing India, and this recent petition adds yet another layer to his complex financial saga.
Mallya's plea rests on the claim made by senior counsel Sajan Poovayya, who presented the argument before the bench led by Justice R Devdas. Poovayya asserted during the court proceedings, "The debt is fully paid; the guarantor company has no liability." This statement underlines Mallya’s contention—that the banks handling his debts have already recouped more than the amounts owed.
The specifics of Mallya’s debt situation are staggering, with the original loan amount cited as ₹6,200 crore—a figure he claims has been eclipsed by recoveries to the tune of ₹10,200 crore as of now. This figure aligns with comments made by Union Finance Minister Nirmala Sitharaman, who previously noted to Parliament, "We will be making sure the money is returned," adding fuel to Mallya's assertion of agreements already met with the financial institutions involved.
Within the hustle and bustle of the courtroom, Mallya’s legal team challenged the banks—namely the State Bank of India (SBI), Punjab National Bank, among others—to provide comprehensive account statements detailing amounts received through recovery efforts. Poovayya stated, "The amounts recovered by the banks have far exceeded the original debt owed to them, hence all proceedings should be halted until clarity is established." He pressed for the court to issue notices to the banks and for the recovery officers to furnish the necessary accounts.
The court's instruction was unambiguous. Justice R Devdas ordered the banks to respond to Mallya's claims by February 13, setting the stage for the next hearing scheduled for February 19. The legal process is not simply about whether the money can be recouped; it extends to the logistics of how recovery was facilitated by the banks and whether any more measures need to be taken against Mallya’s assets.
It is noteworthy to highlight the discussions around the recovery figures, particularly the divergence between the amounts Mallya and financial authorities cite. Poovayya reinforced Mallya’s argument by stating, “More than ₹8,000 crores have been recovered from me over and above the judgement debt.” This declaration was made via Mallya's social media channels and reflects his frustrations over the continuing recovery efforts against him.
The larger narrative surrounding Vijay Mallya has been one of high stakes and even higher finance. His flight from India back to the UK came amid mounting debts from his ventures, chief among them the now-defunct Kingfisher Airlines, which collapsed under financial duress. Since then, he has become synonymous with discussions surrounding loan defaults and the subsequent regulatory measures taken against economic defaulters, raising questions about accountability and transparency within banking systems.
Adding to the urgency of the matter, the High Court's notice aims to shed light on whether any of the asset sales currently pursued by the banks, as part of their recovery process, can be justified considering the claims made by Mallya’s defense. Should the banks be able to substantiate their actions, it may alter the path forward for how these recovery claims are handled.
The legal framework under which Mallya’s debts are being processed also plays a significant role. Under the Companies Act, Mallya asserts once the debts are settled, his liabilities decrease significantly, potentially allowing for the revival of his holding company, United Breweries Holdings Limited (UBHL), which is presently under liquidation.
With the details of Mallya’s life painting the picture of one riddled with glamor and disillusionment, the High Court serves as the next battleground. It will be fascinating to see how both sides will present their arguments next month. Mallya's legal position rests not only on debt recovery claims but also on his broader financial ambitions as he seeks relief from the weight of what appears to be insurmountable economic pressures.
The upcoming court dates promise to deliver revelations not just about Mallya’s financial status, but also about the extent to which banks can recover funds from high-profile defaulters, raising broader concerns about the future of lending practices in India.