New Delhi: The Supreme Court on Thursday directed industrialist Vijay Mallya to disclose the details of assets and all movable and immovable properties, including shareholdings in various companies held by him, his wife and children both in India and abroad for a meaningful and negotiated settlement of his dues to the tune of Rs. 9,000 crores.
Earlier, a consortium of 17 banks, led by the State Bank of India rejected before a bench of Justices Kurian Joseph and Rohinton Nariman a proposal given by Vijay Mallya towards settlement of his dues. The bench accepted the submission made by senior counsel Shyam Divan, appearing for the banks that for a meaningful negotiation for settlement, the personal appearance of Mallya in the court is required.
The bench in its brief order directed Mallya to disclose the details of assets and all movable and immovable property, including shareholdings in various companies held by him, his wife and children both in India and abroad by April 21.
It said counsel would take specific instructions on the probable date of appearance (of Mallya) in person before the court. Mallya would also indicate in his affidavit “what is the amount he is prepared to deposit in the court for a meaningful negotiated settlement” and to prove his bonafides.
At the outset, Divan said the consortium of banks had unanimously rejected the first offer of Rs. 4000 crore and then a slightly modified offer received on Wednesday from Mallya. He, however, said the financial institutions are willing to go for a negotiated settlement but this can be done only if Mallya is personally present in the court. He made it clear that there could be no contingency proposal (like the expectation of getting Rs.2,000 crore from GE), and that substantial deposits had to be made to prove his bonafides.
Divan said that a contest for recovering money is not acceptable to us. Counsel also submitted that since large figures are involved, “We think it is reasonable to ask Mallya to make a full, fair and final disclosure of his assets. He should make a substantial advance deposit. Senior bank officials will also be present in the court to have an effective solution.”
Senior counsel C.S. Vaidyanathan, appearing for Mallya, submitted that there was no liquid money. Everything was tied up in contingencies. “We need court orders to pay.” He said the disclosure of assets was made successively to the banks from 2010 to 2012. But the bench asked him to update Mallya’s assets and indicate this in the response to be filed.
In addition to the over Rs 4,000 crore promised by September 30, Mallya had said he was willing to assign gains from a $236 million lawsuit Kingfisher Airlines had filed in Bengaluru in 2013 against aircraft engine-maker International Aero Engines (IAE) for allegedly supplying “inherently defective” engines for its fleet of A-320 aircraft that led to grounding of its 14 aircraft and consequential losses.
The consortium of banks had initially approached the Debt Recovery Tribunal for the arrest of Vijay Mallaya. But the DRT had only passed an order preventing the London-based Diageo Plc from transferring any money to Mallya for the time being. He received a $75 million payout for selling United Spirits to Diageo. The Karnataka high court had also declined to issue an arrest warrant against him.
In the appeal, the banks said the tribunal and the high court were wrong in refusing to pass interim orders against Mallya. The high court had completely failed to protect the interest of the petitioner banks which are yet to recover an amount in excess of Rs 9,000 crore from Kingfisher Airlines, United Breweries, Dr Vijay Mallya and Kingfisher Finvest (India) Ltd. – the respondents in the case.
The banks claimed that they had individually advanced loans worth crores to Kingfisher and these had been restructured into one by another agreement on December 21, 2010. UB and Mallya had executed corporate and personal guarantees to repay the amount due by that agreement. This loan had since been declared to be a non-performing asser and recovery proceedings were pending. The banks said that grave miscarriage of justice would be caused if the proceedings are delayed any further or if Mallya succeeds in settling down in London. The bench directed the matter to be listed for further hearing on April 26.