SC shares Mallya asset details with banks

The Supreme Court on Tuesday has decided to share liquor baron Vijay Mallya’s and his family members’ assets, including those in other countries, to the consortium of his lenders.

The promoter of the failed Kingfisher Airlines, Mallya, has consistently argued that a non-resident Indian like him was not obliged to disclose information about his assets abroad, even for tax purposes. He, nevertheless, had disclosed the assets only to the court in a sealed envelope, which the judges have read.

However, he did not want to disclose this information to banks, arguing that his foreign assets did not fall under the ambit of the Indian financial institutions that lent to the failed airlines.

Mallya owes 17 banks about Rs 9,400 crore in dues. He has argued that the loan was given to a limited liability company, even as he extended his personal guarantee for the money borrowed.  

He had also told banks to back off from their scrutiny of the overseas assets of his family as Mallya’s personal guarantee should not extend up to others. In any case the members, claims Mallya, by virtue of being adults and foreign citizens, had the right to keep information private.

The Supreme Court’s verdict is a major boost for banks in their recovery effort as they can now get a total picture of Mallya’s finances and how much more can be recovered from the flamboyant billionaire, who so far have had offered banks about Rs 6,000 crore in instalments, with riders that his record be put straight and he be freed from all charges.

Banks have promptly rejected the offer and wanted Mallya to be present for the proceedings. However, bankers said they were open to settle with Mallya if he came up with a “reasonable offer”.

Since then, Mallya has left the country but is under pressure after India revoked his passport. A Mumbai court has also issued a non-bailable arrest warrant for not cooperating with the investigators. Mallya is also facing expulsion from the Rajya Sabha.

On Tuesday, the Supreme Court disposed off banks’ plea that Mallya should be present in the country and his passport be revoked. The court then directed the debt recovery tribunal, where the recovery proceedings were being heard, to dispose the suits within two months.

To recover their dues, banks wanted to attach gains from sale of Mallya’s liquor holdings to UK-based Diageo. Whether they could do so was being challenged in the tribunal in Bengaluru, where Mallya’s corporate empire was headquartered.

On Tuesday, the Supreme Court bench consisting of Justice Kurian Joseph and Justice Rohington Nariman heard Mallya’s senior counsel C S Vaidyanathan and Attorney General Mukul Rohtagi for two hours.

Vaidyanathan contended that the demand for the presence of Mallya could only be to put him behind bars and that settlement talks could be conducted from abroad also. However, he complained, that the banks have not shown any real interest in settling the issues. Mallya had pegged his own domestic assets at Rs 2,014 crore and overseas assets worth Rs 748 crore, his lawyer said.

Attorney General Mukul Rohtagi contended that all the three orders of the court passed earlier have been flouted by Mallya.  For example, Mallya was asked to disclose all assets, but he had been resisting the demand raising various objections.  He was also asked to deposit a substantial amount to show his bona fide in arriving at a settlement, but he had not done it. The third demand, to indicate when he would be able to be present in the court, had also been sidelined on technical grounds.