Vijay Mallya submits Rs 4,000-crore settlement plan to Supreme Court

Liquor baron offers to pay the amount by September 2016; SC asks banks to respond within a week

Vijay Mallya, chairman of Kingfisher Airlines, on Wednesday submitted a repayment plan to the Supreme Court, offering to pay Rs 4,000 crore to settle all claims.

The liquor baron is said to have conducted two rounds of video conferencing with banks and has offered to pay the amount by September 2016. 

The banks told the apex court that they will need some time to study the proposal made by Mallya.  The court has given the lenders a week to respond and will hear the case on April 17. 

Experts have termed the proposal a welcome move. The principal amount of the loan would be to the tune of Rs 7,000 crore, Hitesh Jain of ALMT Legal told CNBC-TV18 in an interview. 

Meanwhile, The Financial Express earlier today reported that the industrialist had approached lenders with an offer of Rs 2,000 crore to settle. 

However, they turned down the offer as the amount was too low, the report added. 

Two senior bankers, who were a part of the 17-bank consortium, said that the liquor baron had approached the lenders through one of his companies with the settlement offer. 

“We cannot accept such a small amount and have rejected the proposal,” one of them told the newspaper.

Finance Minister Arun Jaitley, had on Sunday, warned wilful defaulters to either pay up honourably or face coercive action. "I don't want to make any comments on individual cases, but I think it's a responsibility of large groups like his (Vijay Mallya's) to honourably settle their dues with the banks," he told PTI.

"Banks have some securities. Banks plus other agencies have also coercive methods available with them through legal enforcement. These are all being investigated by relevant agencies," he added. 

Echoing the thoughts, Prime Minister Narendra Modi had said that no defaulter would be spared. “You know how the rich have usurped public money. My government has tightened the screws on the bank defaulters. They are sweating due to fear of going to jail and are fleeing. But no one will be spared,” he said at a rally in Assam on Sunday.

Mallya has been declared a wilful defaulter with dues over Rs 9,000 crore. Recently, lenders to the airline put the company's trademarks and brands on auction to recover dues estimated at about Rs 6,963 crore in February 2014. The trademarks or brands on the block include Fly Kingfisher, Flying Models, Funliner, Fly the Good Times, Kingfisher and Flying Bird Device.