The High Court in London on Thursday deferred hearings on a plea by a consortium of banks, led by the State Bank of India, seeking that businessman Vijay Mallya be declared bankrupt, to enable them to recover a loan of around £1.145 billion (Rs 10,832 crore) from him, PTI reported on Friday.
Mallya faces fraud and money laundering charges resulting from the collapse of his defunct company Kingfisher Airlines. The liquor baron fled India and moved to London in March 2016. Mallya owes Indian banks more than Rs 9,000 crore.
Justice Michael Briggs of the insolvency division of the High Court granted Mallya relief on Thursday, ruling that he should be given time till his petitions to the Supreme Court of India and his settlement proposal before the Karnataka High Court are determined. This would allow Mallya to pay his debts to banks, the judge said.
“This bankruptcy petition is by any measure extraordinary,” Justice Briggs said. “The banks are pressing for a bankruptcy order at a time when there are extant proceedings in India. In my judgement the banks are secured, at least in part.”
Justice Briggs had heard arguments from both sides in December last year. The petitioners cited a villa in France, assets spread across the British Virgin Islands, a trust registered in St Kitts & Nevis and the Indian Empress super yacht in Malta as examples of Mallya’s worldwide assets.
In Thursday’s verdict, the judge said legal cases Mallya was pursuing in India have a reasonable chance of success. “Although the petition to the Supreme Court and proposal before the Karnataka High Court are not guaranteed to succeed, they are genuine,” he said.
The judge said that both parties to the case have agreed to a hearing after June 1, as a definite date cannot be set due to the coronavirus pandemic.
India submitted an extradition request to the United Kingdom in February 2017 after Mallya made his self-imposed exile clear. In July, the United Kingdom High Court allowed him to challenge his extradition order.
On January 1, 2020, a court in Mumbai allowed the banks to utilise Mallya’s movable assets to recover the money they are owed. On January 6, the Supreme Court said Mallya cannot cite the pendency of his plea in the top court to delay insolvency proceedings in courts “anywhere else in the world”.