Karnataka HC halts ED move to seize Mallya property

In a major setback to the Enforcement Directorate (ED), the Karnataka High Court (HC) has issued a stay on the proceeding to seize assets worth ~1,411 crore as part of the central agency’s probe into the Vijay Mallya money laundering case. The HC has asked ED to file a reply by September 27.

With this, the investigation has hit one more legal hurdle. ED’s attempt to bring Mallya (pictured) back to the country has faced several other legal issues, with the India-UK Mutual Legal Assistance Treaty (MLAT) and “extradition” treaties. The next hearing in the case is scheduled for September 28.

The order came after United Breweries (UB) filed a writ petition against the enforcement agency on September 19, and urged the court to grant an interim stay in the adjudicating proceedings.

The ED in June had attached nine assets of Mallya and UB, worth ~1,411 crore, under anti-money laundering laws, in connection with the ~950-crore IDBI Bank loan fraud case.

The nine assets and properties were in Chennai, Bengaluru, Kodagu and Mumbai. The properties included UB City in Bengaluru, one residential apartment in south Mumbai, 4.5 acres of factory plot in Chennai and 27 acres of coffee plantation in Kodagu. Apart from this, ~34 crore in banks, indirectly held by Mallya, was also attached. Mallya owns 52.3 per cent stake in UB — personally as well as through firms such as Watson and McDowell Holdings. Confirming the development, an ED official said, “The proceeding in the case is put on hold till the matter concludes.”

UB, in the appeal, contended the cause of action and demanded several details of the case including Kingfisher Airlines balance sheet, the IDBI Bank loan documents and other files that the agency has possession of.