DRT asks bankers to amend prayer in Indigo, GoAir case

The Debt Recovery Tribunal here today ordered a consortium of banks to amend its plea in a garnishee proceedings initiated to recover money given to aircraft maker Airbus for a purchase deal struck by now defunct Kingfisher airlines promoted by Vijay Mallya.
Instead of seeking the money from budget air carriers GoAir and Indigo through garnishee proceedings, the consortium led by Oriental Bank of Commerce should pray for a direction to the Airbus to deposit the money received in the future from any deal any air carrier from the country strikes with the aircraft maker, the tribunal said.
"In order to protect the business interest and for the well being of the economy of Indigo and GoAir, it is better for the bankers to make an amendment in their prayer seeking direction to Airbus to deposit money received in future from any deal any air carrier (from the country) strikes with it, instead of directly asking AirGo and Indigo to deposit the sum before the Tribunal," DRT Presiding Officer K Srinivasan said.

He then adjourned the matter to September 29. Earlier making submissions before the tribunal, counsel for Indigo said if the tribunal goes ahead and passes an interim order in favour of the bankers it would affect the interest of the airliners' business and economy.
"It is also an absurd case of legality that the budget air carrier has been made a party, who is not even a borrower and defaulter," he said adding it can be treated as "abuse of due process of the tribunal."
He also submitted that the bankers, it appears, have treated Indigo as garnishee, which isn't the case.

"How Indigo can be treated as a garnishee? And why have they treated it as such is just because of their inability to recover debts from Kingfisher and another company," he said.

Airbus counsel said the company was needlessly being dragged into the matter as it is neither a borrower nor a defaulter.
He also challenged the jurisdiction of DRT to adjudicate on the matter as Airbus had arrived at the agreement with Kingfisher as per English laws.
The consortium comprising Oriental Bank of Commerce, Corporation Bank and United Bank of India, had made a pre-delivery payment of Rs 196 crore to Airbus on behalf of Kingfisher after both the parties had signed a purchase agreement. However, the aircraft were not delivered.

They moved the DRT seeking a direction to Indigo and GoAir airlines under garnishee proceedings to deposit money to be paid to Airbus by them.
A garnishment is a means of collecting a monetary judgement
against a defendant by ordering a third party (the garnishee) to pay the money, otherwise owed to the defendant, directly to the plaintiff.
The now-defunct Kingfisher Airlines owes over Rs 9,000 crore to a consortium of 17 banks led by SBI.
Mallya, who left the country on March 2 and is now in UK, has been declared a proclaimed offender by a special PMLA court in Mumbai on a plea by Enforcement Directorate in connection with its money laundering probe against him in the alleged bank loan default case.