UK High Court declares Vijay Mallya bankrupt to recover loans to Indian banks
The UK High Court on Monday ordered bankruptcy against fugitive businessman Vijay Mallya, paving the way for a consortium of Indian banks led by the State Bank of India (SBI) to pursue a worldwide freezing order, so that now – The defunct Kingfisher Airlines.
“by 15.42 hrs” [UK time]”I declare Dr Mallya insolvent,” Chief Insolvency and Companies Court (ICC) Judge Michael Briggs said in his judgment during the virtual hearing of the Chancery Division of the High Court here.
Indian banks, represented by the law firm TLT LLP and barrister Marcia Scheckerdamian, argued for bankruptcy orders in favor of Indian banks.
Currently, Mallya is out on bail in the UK, while a “confidential” legal case, believed to be related to an asylum application, is resolved in relation to unrelated extradition proceedings.
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His barrister Philip Marshall sought an adjournment as well as a stay of the order, while legal challenges continue in Indian courts.
However, the requests were turned down by the judge, who concluded that there was “insufficient evidence” that the loans would be fully refunded to the petitioners within a reasonable time.
He also put forward an application seeking permission to appeal against the bankruptcy order, which Judge Briggs denied because the appeal had “no real prospect of success”.
The petitioners were made up of an SBI-led consortium of 13 Indian banks including 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 India, and Bank of Baroda. Mysore, along with UCO Bank, United Bank of India and JM Financial Asset Reconstruction Company Pvt Ltd, as well as an additional creditor, were pursuing a bankruptcy order in connection with a judgment loan in the UK, which is over GBP 1 billion .
Mallya’s legal team argued that the debt remains disputed and the ongoing proceedings in India obstruct a bankruptcy order in the UK.
The loan in question includes principal and interest, as well as compound interest at the rate of 11.5 percent per annum, as of June 25, 2013. Mallya has applied to India to counter compound interest charges. (with PTI inputs)
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