The Karnataka High Court today ordered issue of notice to liquor baron Vijay Mallya and his defunct Kingfisher Airlines and nine other respondents on a petition filed by bankers, including SBI, seeking his arrest and impounding of his passport for defaulting on loans.
The notice, issued by Justice A S Bopanna came even as the Debt Recovery Tribunal reserved its order on one of the four applications filed by State Bank of India, seeking securement of the lenders' first right on the payout from Diageo to Mallya.
Thirteen bankers, including SBI approached the high court seeking arrest of Mallya and impounding of his passport along with two other pleas after they moved the DRT to take up their pleas on a priority basis.
The top state-run lender has approached DRT seeking action against the UB Group promoter for defaulting on loans.
SBI, which heads the consortium of 17 lenders to the grounded Kingfisher Airlines, had moved DRT here against the airline's chairman Mallya in its bid to recover over Rs7,000 crore due loans from him.
DRT judge Benakanahalli, on priority basis, took up the application for securing a first right on the USD 75 million severance package that Mallya will be getting for quitting Diageo-owned United Spirits (USL) as its chairman last week under a sweetheart deal.
The judge said the other three applications - seeking impounding Mallya's passport, getting him arrested and gettingfull disclosure of his assets in the country and abroad - would be heard later.
"For now, I am taking up the application seeking to secure lenders' first right on the payout from Diageo andgetting full disclosure of his assets in the country andabroad on priority basis. I will take up other applicationslater," he said.
After filing objections before DRT, Uday Holla,Mallya's counsel, submitted that USD 75 million cannot beattached because his client is getting the severance package after signing a non-compete agreement under which Mallya would not enter into liquor business for the next five years.
On the application seeking Mallya's arrest, Holla said his client's arrest would be tantamount to 'demeaning' the institution of Rajya Sabha because he is the respected member of the upper house of Parliament.
Holla also submitted his client was a "small-time" defaulter unlike companies like Reliance who he claimed are bigger defaulters and the banks were hounding small defaulters and leaving big defaulters off the hook.
"Recently the RBI had said that these banks do not take action against large fries, but small fries. My client Mallya is a small defaulter compared to Ambani's Reliance.
Some of the companies have defaulted to the tune of Rs 40,000 crore, and nothing happens to them," he claimed.
After the Finance Minister furnished bank details of total
amount due from Kingfisher Airlines Limited (KAL) of Mallya, mentioning a "staggering" due of Rs 9431.65 crore due to it, the panel examined the matter on April 25 and decided to seek an explanation from Mallya as it also took note of various other developments like issuing of non-bailable warrant against him and revocation of his passport.
"The committee was of the firm view that taking into consideration the gravity of the misconduct, a sanction not less than termination of membership from the House is warranted under the circumstances. The committee, however, decided to offer an opportunity in terms of principle of justice to Mallya to explain his position on the matter," the report said.
Citing various rules, the panel said it was convinced that non-disclosures of liabilities by Mallya in his declarations is a "serious misconduct" within the parameter of the edifice of the rules and procedure governing ethical standards set for members of Rajya Sabha.
It also felt that the basic information supplied by the Ministry of Finance has confirmed the fact that Mallya, by executing his personal and corporate guarantee, created a liability of an amount equivalent to the loans taken from several banks, which he should have reflected fairly and properly his declaration of assets and liabilities.
Besides considering various rules of Parliament, the panel also took into account two important passages regarding the House of Commons of UK regarding the expulsion of an MP.
Citing various rules and court orders, Mallya, had, however, said in his reply that that he was confident and convinced that there is "no tenable basis" for the "so-called" unanimous decision reached by Ethics Committee to recommend his expulsion.
