Hearing in Mallya's debt case put off to Friday

The Debt Recovery Tribunal will resume its final hearing in the loan default case against tycoon Vijay Mallya on Friday, as the petitioners failed to submit affidavits and sought more time.

Though the hearing in the case, filed by a consortium of banks, led by State Bank of India (SBI), was to resume on Thursday, presiding officer Justice C.R. Benakanahalli pulled up SBI counsel for seeking more time, as the Supreme Court on April 24 directed him to dispose of the case by July 9.

"I cannot give any more extension in view of the Supreme Court directive to dispose of the case by July 9 even by holding the hearing on daily basis," he said.

Directing the petitioners to file their objections by Friday, Benakanahalli said he did not want any more submissions from either side as that would delay the case further.

"I have to follow the apex court order. Understand the gravity of the situation and assist me in disposing the case by July 9," he told both counsel.

Counsel for British liquor major Diageo Plc, however, filed a brief affidavit with the tribunal, clarifying the exit deal it signed with Mallya on February 25 for resigning as chairman of its controlled United Spirits Ltd and not to compete with its global beverages market over the next five years.

As part of the $75 million (Rs.515 crore) sweet heart deal, Diageo already paid Mallya $40 million on February 25 and agreed to pay the balance $35 million over the next five years on the latter meeting certain conditions in the agreement.

The tribunal, however, on May 17 directed Diageo not to pay Mallya the amount till the default case was settled.

The consortium of 17 state-run and private banks filed a joint petition in the tribunal in June 2013 after the now defunct Kingfisher Airlines of Mallya's holding company failed to pay the loans to the tune of over Rs.9,091 crore, including compound interest on them.

Diageo also contested the tribunal's jurisdiction to direct it for not paying Mallya, as it was not party to the original petition and was located outside India.

It also objected to the SBI's April 13 petition for the tribunal's direction to deposit the $40 million it transferred to Mallya's bank account outside the country.

--IANS

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