Mallya to Challenge Govt’s Move to Revoke Passport in Delhi HC
Mallya unlikely to return to India in the immediate future for fear of safety. He feels he’s the victim of a campaign that wants to make him a scapegoat for bad loan burden of banks: Sources
Mumbai/Delhi: Vijay Mallya will challenge the government’s decision to revoke his passport in the Delhi High Court as it violates his constitutional rights, said persons close to the businessman, adding that he’s unlikely to return to India in the immediate future as he fears for his safety. Mallya’s lawyer also said on Tuesday that he wasn’t likely to come back to the country soon during arguments in the Supreme Court.
The Indian foreign ministry said it has started deportation proceedings but experts said this effort was likely to run into difficulties in the UK.
Unless the government assures him of fair treatment and safe passage, Mallya will remain overseas, the persons said. Mallya, who left India on March 2, feels he’s the victim of a campaign that wants to make him a scapegoat for the burgeoning bad loan burden of banks, despite having all along sought to reach a settlement with the lenders. Apart from this, the Enforcement Directorate wants to question him about money laundering accusations.
As he had not presented himself for questioning despite being summoned three times, ED pushed the external affairs ministry to first suspend and then revoke his passport. Mallya had told the ED that he could be questioned by video conference, an offer that the agency turned down. Meanwhile, the Rajya Sabha ethics committee has recommended his expulsion from the house before his term ends on June 30.
One of the persons cited above questioned why ED and the foreign ministry felt the need to intervene while Mallya is negotiating with the banks and the court is yet to take a decision. “Do they want Mallya or the money? We get the feeling that the Indian agencies and regulators are more eager to play to the gallery," the person said. The banks appear to be under pressure to target him, he added.
A 17-bank grouping led by State Bank of India says it’s owed more than .₹ 9,000 crore on loans given to Kingfisher Airlines, which Mallya founded. While that case is in the Supreme Court, lenders are also looking to sell some of the assets Mallya pledged against the loans to Kingfisher Airlines, which stopped flying in 2012.
The person cited above referred to the example of David Headley, a US terrorist of Pakistani origin, testifying in an Indian court by video conference. “Why can’t Vijay Mallya, who is being treated as a criminal for a business failure, (do the same)?” said one of Mallya’s legal advisers on condition of anonymity. The person went on to say: “We are convinced that he is being targeted… Video conferencing under oath is a legal option accepted by countries across the world. At a time Mallya is willing to repay banks the principal amount of .₹ 4,000 crore – the highest offered by any promoter of a defaulting company — his passport has been revoked.”
ED officials said they were following protocol. "We are in fact helping banks by getting Mallya to come to India.” The foreign ministry declined to comment. An official said off the record: “Our job in this case was to revoke Mallya's passport and deal with deportation. We do not deal with financial issues.”
Getting Mallya extradited from the UK will be difficult, said Zulfiqar Memon, founder of law firm MZM Legal. Memon has extensive experience in UK extradition cases.
“I can tell you that the UK legal system is extremely fair and does not get influenced by the sensationalisation of a case. As much as Vijay Mallya will have to make out a good case to oppose extradition, the Indian government has an uphill task to extradite him,” Memon said. “Our experience in contesting the Nadeem Saifi extradition in London has made it evident on how difficult it can be for the Indian government to fight extradition in London, with limited resources as against a battery of powerful UK-based extradition experts, which I am sure Vijay Mallya will engage."
Emails and calls to Mallya went unanswered. He has maintained that he’s not guilty of any wrongdoing.
Mallya fears he will be detained by the ED or CBI (Central Bureau of Investigation) the moment he lands in India, said one of the people cited above. “Where is the justice? Mallya does not see the possibility of a fair trial. The weekend developments led by the ED and MEA (ministry of external affairs) reflect a prejudiced system,” he alleged.
When Mallya had earlier met senior SBI officials, an informal understanding was reached that he would repay up to .₹ 4,500 crore, but later the banking consortium, perhaps under the pressure from the ministry, never pursued this, said the person.
As for the .₹ 900 crore from IDBI that’s the subject of the ED inquiry, Mallya has provided all details. “But ED continues to accuse him of diverting funds out of the country. That is a bogus claim,” said one of those cited above.
This issue is about maintaining the institutional credibility of the banking system, said Ramesh Vaidyanathan, managing partner of law firm Advaya Legals. "The government is keen to paint this as a case of individual misdemeanour and not a systemic failure." TV Mohandas Pai, chairman of Manipal Global Education and former Infosys director, said the reason the Mallya debt issue turned into such a high-profile controversy was the $75 million payout he received from Diageo for walking away from United Spirits. He also said the matter had made other businessmen jittery.
“It is a debt issue and the DRT has to take care of the issue. Why is the government using state or sovereign powers to threaten a business failure? Revoking passport is an infringement of civil liberties under our constitution,” Pai said. “Let the Supreme Court hear the case and deal with it fast. I have great regard for this government but this has put an element of fear in India Inc. that they cannot stand up to the government. Make Mallya pay his debts but do not use the IT (income tax), ED or CBI (Central Bureau of Investigation) to deal with a business loss. It is the bank's business to deal with it, not the government's.” Reserve Bank of India governor Raghuram Rajan, spearheading the move to get banks to clean up their books, has said that there is a need to keep moral judgment out of the exercise. “What's happening on the NPA (non-performing asset) front... this becomes loaded with a lot of morality — are these good people, bad people? I think one should take out the morality from the NPA clean-up," he said earlier this month.
The government has said previously that there is need to distinguish between defaults that have occurred because of bad business decisions and those stemming from poor economic conditions.
(Additional reporting by Dipanjan Roy Chaudhury)
Reserve Bank of India governor Raghuram Rajana said that there is a need to keep moral judgment out of the exercise
Kala Vijayraghavan & Maulik Vyas