Fugitive tycoon Vijay Mallya has approached the Karnataka High Court, alleging that banks have recovered far more than the ₹6,200 crore debt his company Kingfisher Airlines Ltd owed them. He has requested details of the recoveries made by the lenders.
On Wednesday, Justice R Devdas issued notices to the Debt Recovery Tribunal (DRT), Chennai, along with State Bank of India (SBI), Bank of Baroda, and other banks that had granted loans to Kingfisher Airlines. The court has adjourned the hearing to February 19.
Legal Arguments: Reviving UBHL
The petition was filed not to contest the repayment of the loan but to determine whether the debt has already been fully recovered, said senior advocate Sajan Poovayya, representing United Breweries Holdings Ltd (UBHL), a guarantor company.
Poovayya told the court, “Under the Companies Act, if a debt has been fully paid, the guarantor company, UBHL, is no longer liable and can be revived. However, for that to happen, the recovery officer must issue a certificate stating that the debt has been cleared.”
He further argued that recoveries from Kingfisher Airlines were still ongoing, but there had been no formal declaration of whether the principal debt had been fully repaid.
Background: The Kingfisher Debt Crisis
Mallya, once a high-profile entrepreneur, left India in 2016 amid allegations of financial fraud and unpaid loans linked to Kingfisher Airlines, which ceased operations in 2012. Indian banks had declared Mallya a wilful defaulter, and a series of legal battles followed as authorities sought to recover funds from his businesses and assets.
The Enforcement Directorate (ED) and Central Bureau of Investigation (CBI) have accused Mallya of financial mismanagement and money laundering, with efforts underway to extradite him from the UK to face trial in India. Meanwhile, Indian banks have been auctioning his assets, including properties, shares, and luxury items, to recover the loan amounts.
Bank Recoveries: More Than the Debt?
Mallya’s legal team argues that the total amount recovered by banks has surpassed the original loan amount, yet recoveries continue. While some banks claim they are still in the process of retrieving dues, Mallya has demanded an official statement on whether the outstanding debt has been settled.
The case will now be heard on February 19, with the court seeking responses from the concerned banks and the Debt Recovery Tribunal (DRT), Chennai.
Key Takeaways
Vijay Mallya claims banks have recovered more than the ₹6,200 crore debt from Kingfisher Airlines.
Karnataka HC has issued notices to DRT Chennai, SBI, Bank of Baroda, and other lenders.
Mallya’s legal team argues that his firm UBHL should be revived if the debt is fully repaid.
The next court hearing is scheduled for February 19.
