Vijay Mallya loan default case: DRT orders SBI-led consortium to initiate recovery proceedings
The DRT also initiated recovery proceedings against Mallya-owned Kingfisher Airlines
The Debt Recovery Tribunal (DRT) ob Thursday ordered the State Bank of India-led consortium to start proceedings against liquor baron Vijay Mallya on banks vs Vijay Mallya case. The DRT also initiated recovery proceedings against Mallya-owned Kingfisher Airlines. Reports also say that the tribunal is likely to start the attachment of Mallya's properties. The banks have to recover Rs 6,203 crore in addition to an interest rate of 11.5% per annum.
The SBI on June 2016, pleaded before DRT to grant recovery certificate to initiate recovery proceedings against Mallya for debts from him in the bank default cases. PTI had then quoted SBI Counsel Nagananda as saying: “We have not been able to trace the money (USD 40 million) which was transferred to Mallya by Diageo Plc and subsidiaries. Therefore, we request the honourable Tribunal to grant us recovery certificate to start proceedings against Mallya to recover our debts from him.”
He had made the plea together making a submission on its application for recovery proceeding against Mallya and his companies before DRT Presiding Officer C R Benakanahalli.
Kingfisher Finvest's counsel on its reply had submitted that the firm was neither a party nor a guarantor for the loans taken by Kingfisher Airlines, United Breweries Holding Limited (UBHL) and Mallya was just a pledgor, and no action can be taken against a pledgor.
Mallya, whose now obsolete group Kingfisher Airlines owes Rs 9,000 crore (Rs 90 billion) to a consortium of 17 banks led by SBI and had fled the country on March 2.