Indian banks can recover debt from ‘bankrupt’ Mallya
BUSINESSMAN REFUSED PERMISSION TO APPEAL ORDER
A BRITISH court on Monday (26) granted a bankruptcy order against Indian businessman Vijay Mallya, paving the way for a consortium of banks to pursue a worldwide freezing order to seek repayment of debt owed by the now-defunct Kingfisher Airlines.
“As at 15.42 [UK time], I adjudicate Dr Mallya bankrupt,” chief insolvencies and companies court (ICC) Judge Michael Briggs said in his ruling during a virtual hearing of the Chancery Division of the high court in London.
Led by the State Bank of India (SBI), the Indian banks, represented by law firm TLT LLP and barrister Marcia Shekerdemian, argued for the bankruptcy order to be granted in their favour.
Mallya, 65, remains on bail in the UK while a “confidential” legal matter, believed to be related to an asylum application, is resolved in connection with the unrelated extradition proceedings.
His barrister, Philip Marshall, sought a stay as well as an adjournment of the order while legal challenges remain ongoing in the Indian courts.
However, the requests were turned down by the judge who concluded that there was “insufficient evidence” the debt will be paid back in full within a reasonable period of time. He also put forward an application seeking permission to appeal against the bankruptcy order, which Judge Briggs refused as there was no “real prospect of success” of an appeal.
The petitioners include 13 banks, among them Bank of Baroda, Corporation bank, Federal Bank Ltd, IDBI Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Punjab & Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank, United Bank of India and JM Financial Asset Reconstruction Co. Pvt Ltd.
Mallya’s legal team contended that the debt remained disputed and that the ongoing proceedings in India inhibited a bankruptcy order being made in the UK. The debt in question comprises principal and interest, plus compound interest at a rate of 11.5 per cent per annum from June 25, 2013. Mallya has made applications in India to contest the compound interest charge.