The Debt Recovery Tribunal is likely to issue orders on Friday over a plea by State Bank of India to arrest and impound the passport of UB Group chairman Vijay Mallya over unpaid loans taken to run Kingfisher Airlines.
State Bank of India had filed the petition with the DRT after Mallya signed a deal with United Spirits Ltd and its parent Diageo last week that gets him $75 million or Rs 500 crore over five years. All civil cases filed against him by USL and Diageo has also been dropped.
A counsel for SBI and a DRT official independently confirmed that the orders will be posted on Friday. The plea also maintains that SBI should have the first right of the funds from United Spirits as Mallya had stepped down from the company's board.
Mallya has objected to the SBI's plea stating that the DRT was not the forum to seek a defaulter's arrest. His counsel said that objections were filed on Thursday against the SBI's notice.
SBI, which leads a consortium of banks that lent Mallya, declared him as a willful defaulter in october 2015. Besides SBI, United Bank of India, which he has got a stay from the Calcutta High Court, and Punjab National Bank has also declared him willful defaulter.
Mallya and Kingfisher, now defunct since it suspended operations in October 2012, owe SBI and the consortium of 17 banks over Rs 7,800 crores of loans raised to run the airline. Kingfisher Airlines was started as a trophy airline by Mallya for his son's 18th birthday. The airline redefined luxury air travel in India but soon crash landed due to high cost structures, increased competition and mismanagement.
Mallya, a Rajya Sabha MP, on Thursday also faced a setback from the Delhi High Court, when it refused to accept his plea against SBI's decision to declare him defaulter.The court asked Mallya and United Breweries (Holdings) Ltd, the company he owns majority stake to approach an appropriate forum.
Mallya arrived at a deal with Diageo and USL, nearly 18 months after USL has reported that financial irregularities and fund diversion when Mallya ran the company has cost USL over Rs 7,200 crores. The USL board has recommended to Diageo to evict Mallya from the company, after it lost confidence in him due to the fraud.