Businessman Vijay Mallya was declared bankrupt by the London High Court on Monday, with a consortium of Indian banks led by the State Bank of India (SBI) winning the case related to recovering debt from loans paid out to Mallya’s now-defunct Kingfisher Airlines.
The verdict opens the doors for Mallya’s assets to be seized. Mallya said he would appeal against the HC order, but he was refused permission for the same.
“As at 15.42 [UK time], I adjudicate Dr Mallya bankrupt," Chief Insolvencies and Companies Court (ICC) Judge Michael Briggs said in his ruling during a virtual hearing of the Chancery Division of the High Court.
During a virtual hearing in May, the London HC had upheld an application to amend the banks’ bankruptcy petition, in favour of waiving their security over the embattled businessman’s assets in India. The petition dated back to 2018.
The banks had accused the 65-year-old businessman of trying to kick matters into the long grass and called on the bankruptcy petition to be brought to its inevitable end.
Mallya remains on bail in the UK while a confidential legal matter, believed to be related to an asylum application, is resolved in connection with the unrelated extradition proceedings.
Meanwhile, the SBI-led consortium of 13 Indian banks, which also includes Bank of Baroda, Corporation bank, Federal Bank Ltd, IDBI Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Punjab & Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank, United Bank of India and JM Financial Asset Reconstruction Co Pvt Ltd as well as an additional creditor, have been pursuing a bankruptcy order in the UK in relation to a judgment debt, which stands at over GBP 1 billion. Mallya’s legal team contended that the debt remains disputed and that the ongoing proceedings in India inhibited a bankruptcy order being made in the UK.
The debt in question comprises principal and interest, plus compound interest at a rate of 11.5 per cent per annum from 25 June, 2013. Mallya has made applications in India to contest the compound interest charge.
(With PTI inputs)