In a major blow to liquor baron Vijay Mallya, the Karnataka High Court on Friday ordered winding up of Kingfisher Airlines Limited (KFL) for recovering US $6 million (Rs 41 crore) due to a UK-based company, which was supplying rotable aircraft components to the airline.
The court also directed the official liquidator to take possession of the assets of the defunct airline in terms of the provisions of the Companies Act, 1956, and submit a report in this regard within four weeks.
Justice Vineet Kothari passed the order while allowing a petition filed by Aerotron Ltd, a company based in West Sussex, UK. The court said that it would shortly release detailed reasons.
The KFL was required to pay US $6,023,724.01 to Aerotron Ltd as on July 4, 2012, of which US $5,192,483.80 was the principal amount.
Petitioner-company Aerotron had moved the court in 2012 seeking winding up of the airline for recovering the amount due to it, while complaining that the airline had failed to pay the amount despite repeated reminders.
The KFL, it was stated in the petition, had admitted the liability and signed a settlement agreement to clear the entire amount, around US $5 million, payable to Aerotron Ltd on a monthly instalment basis between March and October 2012. However, the KFL failed to make payment, even as per the settlement.
“Admittedly, the said amount has not been paid within the time provided in the agreement between the contending parties or even thereafter. Thus, satisfied that KFA was unable to pay its debts, the court orders the winding up of the airline company,” the judgment stated.
Aviation regulator Director General of Civil Aviation had cancelled the airline’s flying licence on October 21, 2012, after it suspended operations since October 1 following an indefinite strike by its employees, including crew.