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

The Economic Times - - Companies: Pursuit Of Profit -

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

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