Tribunal to Diageo: Submit Mallya deal papers by May 12

DRT asks Diageo to submit deal agreement signed with Mallya

The debt recovery Tribunal (DRT)  on Friday  directed British liquor major Diageo Plc to give by May 12 a copy of the agreement it had signed with Vijay Mallya and back it with evidence on June 2, when the final arguments would be heard.

"Why haven't you given a final agreement copy as directed by the court earlier?," the DRT asked the counsel for Diageo.

The DRT said the Supreme Court had directed faster completion of the case and wanted the documents and the evidence when arguments resume on June 2.

In February, Diageo had signed a £75-million (around Rs 500 crore) deal with Mallya, making him to commit that he would not compete with Diageo or United Spirits Ltd (USL), the liquor company he built. The British liquor firm paid £40 million immediately to Mallya, who is under "forced exile" in the United Kingdom.

The DRT is hearing a petition by a consortium of banks led by State Bank of India over unpaid loans by Mallya, which he took to run the now-defunct Kingfisher Airlines. The DRT had directed Diageo and USL to deposit the money owed to Mallya with the tribunal.

Mallya, who owes over Rs 7,200 crore to a consortium of banks led by State Bank of India, has objected to the plea by India's largest public sector bank seeking the money saying that the payments are being made to him as a person not to compete with Diageo in the liquor business.

"The payments from Diageo Plc to myself are towards my personal non compete obligations globally except in the UK. In effect, I have given up my interests in the spirits business globally at considerable cost," Mallya had said in March.

Mallya had taken the loans to run the defunct Kingfisher Airlines that led to him losing control over his liquor empire to global players — Diageo in  spirits and Heineken in beverages. He claimed that his UB Group has pumped over Rs 4,000 crore into Kingfisher Airlines. Mallya claimed that since April 2013, banks have recovered Rs 1,244 crore in pledged shares and Rs 1250 crore has been deposited in Karnataka High Court belonging to United  Breweries (Holdings) Ltd

The plea by the banks in the DRT maintains that SBI should have the first right of the funds from United Spirits as Mallya had stepped down from the company's board.