In yet another blow to ‘wilful defaulter’ Vijay Mallya, Debt Recovery Tribunal on Thursday ordered the SBI-led consortium of banks to start the process of recovering over Rs 6,203 crore, at 11.5 per cent annual interest rate, from the embattled tycoon and his companies in the Kingfisher Airlines case.
“I hereby ask the bankers to start the process of recovery of Rs 6203,35,03,879 crore and 42 paise at the interest rate of 11.5 per cent per annum from Mallya and his companies, including UBHl, Kingfisher Finvest and Kingfisher Airlines,” DRT Presiding Officer K Sreenivasan said in his order here.
At the jam-packed, newly rented space of DRT which was inaugurated only this morning, the Presiding Officer disposed of 20 Interlocutory Applications (IAs), including several by Mallya and his firms.
The lenders had moved DRT in 2013 to recover dues from the defunct airline.
SBI had filed three other applications, including one seeking Mallya’s arrest and impounding of his passport, for ‘defaulting’ on loans.
Sreenivasan decreed that if, in spite of the sale of the properties mentioned in schedules, the OA (the Original Application) amount was not fully realised, then the applicant bank was at liberty to proceed against the person and other properties of the defendants as required under law and also as advised.
In the event of failure of defendants to pay the OA amount, the applicant bank was at liberty to sell the hypothecated, mortgaged, movables and immovable properties described in schedule of the main petition, according to law as sought by the applicant bank, he said.
The PO also said: “The applicant bank shall file latest memo of calculation of OA amount together with interest, costs etc, to be paid by defendants duly taking into account the amounts, if any, paid by the defendants and or amount realised by sale of assets, etc, during the intervening period after filing the OA, to enable the office to prepare Recovery Certificate for the amount to be paid by the defendants to the applicant bank.”
Sreenivasan said that the office is directed to issue Recovery Certificate as sought by the applicant bank in the OA and “do the needful as required under law forthwith”.
The order brings an end to the nearly three-year legal battle in the Tribunal by the consortium, comprising 17 banks, to recover the money owed to them by the defunct airlines.
Mallya had been declared as wilful defaulter by several banks.
On ‘lifting of corporate veil’, Sreenivasan said it was intriguing as to why Kingfisher Finvest should worry about its veil being lifted when according to them they are so independently doing their own business and sale of the shares was only a part of their whole business.
The bankers had filed IA seeking lifting of corporate veil to pierce the protection against personal liability enjoyed by individuals controlling Kingfisher Finvest.
The doctrine of lifting of Corporate Veil means disregarding the corporate personality and looking behind at the persons controlling the company.
Sreenivasan further said if only what they have stated was true, Kingfisher Finvest should not be complaining on this aspect and should have lifted the veil themselves voluntarily and proved their innocence/independence as contended.