Vijay Mallya
Vijay Mallya
File Photo

Fugitive liquor baron Vijay Mallya has suffered yet another setback at the Supreme Court. The apex court on Monday rejected Mallya's application filed by his United Breweries Holdings Limited (UBHL) challenging a Karnataka High Court order upholding the closing of the company for recovery of dues payable by Kingfisher Airlines.

During the court hearing, a division bench comprising Justice UU Lalit and Ashok Bhushan refused to give relief to the company. Senior advocate Mukul Rohatgi, representing the State Bank of India (SBI)-led consortium of banks, informed the court that around Rs 3,600 crore has been recovered from the absconding Mallya but 11,000 crore is yet to be recovered.

Rohatgi claimed that the Enforcement Directorate (ED) should not have attached the assets of the company as these were encumbered assets and thus the banks' first claim on the properties.

Senior Advocate CS Vaidyanathan, appearing for United Breweries, had submitted before the top court that since the company's assets exceeded the total debt, it was not the case wherein the company should be directed to wind up.

Vaidyanathan insisted that the ED had attached many assets of the company, as a result of which none was available to the banks.

Earlier, the top court had said that?it would examine whether assets of a company which have been attached by the authorities following legal proceedings can be considered for liquidation to settle financial liabilities.

The court had observed this after Vaidyanathan had submitted that the company's assets in totality are far greater than its liabilities.

On March 6, the high court had rejected the offer of Mallya for settlement of debts of now defunct Kingfisher Airlines terming it as 'not bona fide and made in good faith' and dismissed the appeal of UBHL against the order of winding up of the company.

UBHL had claimed that the market value of the company's assets is more than the debts.

The high court said that many of the assets proposed by the UBHL in the offer of settlement were attached either by the ED under PMLA or by the Debt Recovery Tribunal and it cannot prohibit the statutory authorities from discharging their functions and order sale of assets.

UBHL owes over Rs 6,000 crore and compound interest to SBI-led consortium of banks and the lenders have moved the courts and debt recovery tribunal with winding up petitions to recover their dues.
The lenders to Kingfisher Airlines had filed the case against UBHL seeking dues from the now defunct airline.

UBHL had given corporate guarantees for loans to run Kingfisher, which has virtually caused the collapse of Mallya's liquor empire. Mallya owns 52.34 per cent in United Breweries Holdings Limited.

Earlier, the Debt Recovery Tribunal here had ordered the SBI-led consortium of banks to start the process of recovering over Rs 6,203 crore, at 11.5 per cent annual interest rate, from the embattled tycoon and his companies in another Kingfisher Airlines case.

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