A day after Kingfisher Airlines was declared a willful defaulter by one of the banks that lend credit, the Supreme Court refused to come to the company's rescue and asked the company to challenge the order in a fresh proceeding.
The Kingfisher Airlines (KFA) had objected to the proceedings being carried out by the United Bank of India without hearing him. Although the company had requested to be represented by a legal counsel, he Grievance Redressal Committed of United Bank proceeded on Monday to declare the company and its promoter Vijay Mallya as "willful defaulters".
The bench of Justices AR Dave and UU lalit did not favour hearing the petition as it held it to be "infructuous". It said, "Your grievance has been that Grievance Redressal Committee (GRC) should not decide the matter but they have already decided it, therefore your plea is infructuous now." The Court asked the company to file a fresh appeal against the Monday decision.
Attorney General Mukul Rohatgi who opposed the petition informed the Court that the matter was pending since May this year and not once did the company enter appearance in the proceedings. Senior advocates Abhishek Manu Singhvi and Parag Tripathi argued that the order could not be passed in violation of principles of natural justice. "There are severe penal consequences of being declared as a willful defaulter," the company argued.
However, after the bench said that the plea has become infructuous, the airline counsel submitted that they would challenge the GRC order before the concerned High Court. State-run United Bank of India became the first lender to declare debt-ridden Kingfisher Airlines and its promoter Vijay Mallya as wilful defaulters.
Following the Court order, the company issued a statement that it will "vigorously" pursue the case in Court. In a statement issued on Tuesday, the Vijay Mallya-owned company said, "KFA and its directors will vigorously challenge the decision of UBI" and added that they "strongly deny the allegations of willful default for alleged non-payment of Rs 7.5 crore to UBI."
"KFA and its directors have not been given any opportunity to present their case through lawyers of their choice before UBI who have come to a wrongful ex-parte decision in great haste when the question of legal representation was under challenge," Prakash Mirpuri, Vice President (Corporate Communications) of the UB Group, said.
The airline had accused the UBI of having proceeded post haste to "declare KFA and its directors or erstwhile directors as willful defaulters in respect of an overdraft facility of Rs 7.5 crore."