SC Re­jects Mallya’s Plea Against ED Pro­ceed­ings

But the court sought ex­pla­na­tion from ED on at­tach­ment of prop­er­ties

The Economic Times - - Pure Politics - Sa­man­waya.Rau­tray @times­

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.

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