While as many as 17 banks are looking for him to recover a bad debt of `9,000 crore, liquor baron Vijay Mallya has quietly left the country and is believed to be sojourning in london. Informed by the Centre about Mallya’s ‘flight’, the Supreme Court on Wednesday issued notice to the Rajya Sabha member for recovery of the amount.
led by prime lender State Bank of India, the 17 banks had apprehended this possibility and for this reason demanded in their petition on Tuesday to urgently restrain Mallya from leaving the country and in the alternative, freeze his passport.
As the Bench of Justices Kurian Joseph and Rohington F Nariman took up the petition for hearing on Wednesday, Attorney General Mukul Rohatgi informed the court, “I have been informed by CBI (probing a case against him) that the day we moved an application on March 2 before Debts Recovery Tribunal to block his passport, he left the country.” He said that the day Mallya tweeted to settle the outstanding amounts he left the country that very day.
Rohatgi asked the court to summon the corporate honcho as his assets abroad are far in excess of the loan amount. The Bench decided to issue notice personally to Mallya and his company United Spirits limited and in addition, directed the same to be mailed to his official Rajya Sabha address in order to effect his response on the petition by March 30. At the request of the A-G, the court allowed the notice to be sent to Mallya through the Indian High Commission in london, which he often visits due to his business interests.
The court did not allow the request to summon Mallya initially as it wished to receive his response on the petition. “We will issue notice. You call him and then we will see,” the Bench said. Mallya had secured varying loan amounts from 17 banks on the condition of repayment and had even given a personal guarantee on December 21, 2010 promising repayment.
The Bench wondered how things came to such a pass. It asked Rohatgi, “How did banks lend so much loan without securing against his assets.” The AG informed the court that only one-tenth of the loan amount was secured. There was also a practical difficulty the banks faced as the loans were secured against the now-defunct Kingfisher Airlines and in this business the brand and the logo carries a value which itself runs into thousands of crores.
The Bench wished to know whether the procedure to loan such big amounts was violated in this case as it again asked the AG, “When banks advance big loans, they generally secure against some fixed assets.” Rohatgi clarified that the loan was secured against the Kingfisher logo that had good brand value. Moreover, he pointed out that Mallya has throughout assured he would repay them. “We are not for anybody’s blood. But he should appear. All we want is a disclosure from him on repayment.”