SC Rejects Mallya’s Plea Against ED Proceedings
But the court sought explanation from ED on attachment of properties
New Delhi: The Supreme Court on Friday refused to stay proceedings initiated in a special court in Mumbai against industrialist Vijay Mallya under the Fugitive Economic Offenders Act, but sought an explanation from the Enforcement Directorate on his plea to stop the agency from attaching his properties.
Mallya argued before the top court that the proceedings would have “serious”, “adverse consequences” for him when he had “peacefully handed” over his various assets to a UK court under recovery proceedings initiated against him by a consortium of Indian banks.
The special court had refused to entertain his plea to stop the proceedings citing lack of powers. He approached the Bombay High Court, which in a November 22 order refused his plea, saying he had not made himself available for investigations and kept away from India. This prompted Mallya to go to the top court.
A two-judge bench led by Chief Justice of India Ranjan Gogoi issued notices to the Enforcement Di- rectorate, a finance ministry wing that probes money-laundering cases, seeking a formal explanation on his plea. “Notice, no stay,” Gogoi, who was sitting alongside Justice Sanjay Kishan Kaul, said.
Mallya’s case was argued by senior advocate Fali S Nariman, who contended that despite an earlier order of status quo on attachment, the ED was attaching his properties. “Creditors are entitled to it,” Nariman said. “But the Bombay High Court doesn’t even look into it,” Nariman, who was assisted by lawyers Amit Desai and Ankur Saigal, said.
In his petition, filed through lawyer Mahesh Agrawala, Mallya contended that he had also backed a settlement offer by United Breweries (Holdings) of Rs 14,966.30 crore as on August 28, 2018, seeking the Karnataka High Court’s approval to sell several of his identified assets to pay off creditors.
The businessman said he also handed over to a London court several of his assets, including watches, cars and jewellery. The London proceedings have been initiated by a consortium of Indian banks and the next hearing is on December10, to enforce a ruling in their favour by a Bengaluru court. The Debt Recovery Tribunal there had ordered him to pay up more than Rs 6,000 crore to banks. Back home, Mallya and his now defunct Kingfisher Airlines, are facing multiple proceedings of recovery filed by banks in debt recovery tribunals. That apart the ED has initiated the process of declaring him a fugitive economic offender in the special court in Mumbai.
That court in an order signed on November 3, 2018, refused to hold off on attachment of properties.
Mallya had argued there that an attachment order could not have been passed when there was a status quo order passed by the DRT in Delhi regarding the same properties under the Prevention of Money Laundering Act.