Vijay Mallya Seeks Clarity on Bank Recoveries in Karnataka HC
BENGALURU: Fugitive businessman Vijay Mallya has recently turned to the Karnataka High Court (HC) to seek clarity on the recoveries made by banks related to the substantial debt of Rs 6,200 crore owed by his company, Kingfisher Airlines Ltd. Mallya asserts that the recoveries are multiple times greater than the principal debt amount and is requesting detailed information concerning these recoveries.
Justice R Devdas has issued notices to the recovery officer of the Debt Recovery Tribunal (DRT) in Chennai, along with major banks involved, including the State Bank of India (SBI) and Bank of Baroda, which had extended loans to Kingfisher Airlines. The next hearing is scheduled for February 19.
Mallya’s senior advocate, Sajan Poovayya, clarified in court that the petition is not a plea to evade repayment of loans. Instead, it aims to highlight a crucial aspect of the Companies Act: if a debt is fully paid, the guarantor company, United Breweries Holdings Ltd (UBHL), is absolved of any liability, thus allowing for potential revival. However, this revival can only occur once the recovery officer certifies that the debt has been fully recovered.
Poovayya emphasized that despite the recoveries made so far, the banks continue to pursue further recovery actions against UBHL. This situation arises following an order to wind up Kingfisher Airlines, a decision that has been upheld by the Supreme Court.
As the legal proceedings unfold, the complexities surrounding Mallya’s financial obligations and the banks’ recoveries remain a focal point in the Indian corporate landscape.
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