A direction by Chief Justice of India S A Bobde, Justice B R Gavai, and Justice Surya Kant to the Karnataka high court asked the latter to expeditiously settle the matter of assets deposited before it by Mallya for liquidation, and thereby payment to creditors ‘preferably not later than three months’.
It will be interesting to see the view of the London high court, if the settlement of his dues to Indian creditors is imminent, reports Ashis Ray.
Beleaguered Indian businessman Vijay Mallya’s lawyers could utilise a recent order by the Supreme Court to seek mitigation at hearings on his extradition to India.
These commence at the Royal Courts of Justice or the High Court of England and Wales in London on February 11.
In July last year, an appeal by Mallya was admitted by the high court -- but only to challenge the evidence of fraud presented by the prosecution to the Westminster magistrates’ court, which ordered his deportation to India in December 2018.
This was followed by the former British home secretary Sajid Javid approving his extradition in February 2019.
Mallya, who relocated to London in 2017, controlled Kingfisher Beer in India, where he is still a substantial shareholder. He, however, collided with difficulty after failure of Kingfisher Airlines, leaving the carrier with a debt of around Rs 9,000 crores to various Indian banks.
Mallya is liable in this respect, as he provided a personal guarantee in order to secure at least a part of the facilities.
Indian authorities also accused him of obtaining a portion of the loan fraudulently, and of unlawfully siphoning off money abroad. The magistrates’ court upheld the charges on both counts.
Now, a direction issued by Chief Justice of India S A Bobde, Justice B R Gavai, and Justice Surya Kant on the 10th of this month to the Karnataka high court asked the latter to expeditiously settle the matter of assets deposited before it by Mallya for liquidation, and thereby payment to creditors. Mallya has claimed the assets placed at the courts' disposal are worth around Rs 13,000 crores.
According to the order of the three judges, all parties involved in the litigation agreed that the appeal by Mallya “pending before the Karnataka high court at Bengaluru, be disposed of by the high court as early as possible, preferably not later than three months from today” -- which means 10th April.
A source close to Mallya saw this as favourable.
It will be interesting to see the view of the London high court, if the settlement of his dues to Indian creditors is imminent.
The Central Bureau of Investigation and the Enforcement Directorate of the ministry of finance in their arguments before the magistrates’ court took the stand that Mallya had no intention to repay the money borrowed by Kingfisher Airlines from Indian banks.
Sarosh Zaiwalla, senior partner at London solicitors Zaiwalla & Co said: “High court hearings in such cases is generally continuous, and in this instance could take around a couple of days. The judge or judges will then reserve their judgement for 7-14 days before delivering it.”
He added the fraud aspect being reviewed is significant, as this was a key element in the magistrates’ court granting extradition.
Since the verdict of the lower court was so sweepingly against Mallya, there was doubt as to whether the High Court would entertain an appeal by the defendant at all. Now the question is, if the high court reiterates the magistrate court’s judgement, what further options would Mallya have?
He could still approach the United Kingdom’s Supreme Court. If this application, too, fails, he can conceivably, as long as Britain has not actually exited the European Union, petition the European Court of Justice.
As of now, Britain and the EU aim to part on January 1, 2021. This, though, is subject to the two entities arriving at agreements on innumerable issues in a mere 11 months, including the future trading relationship from the present situation of the UK being a member of the EU single market.
Last week, Javid, currently the chancellor of the exchequer, rather rattled the markets by saying they should not be expecting “alignment” with the EU in a post-Brexit trading scenario.
Last Wednesday at the World Economic Forum in Davos, the new president of the European Commission Ursula Von Der Leyen hinted to the BBC that EU-UK trade negotiations could take longer if Britain preferred a competitive future.
Photograph: PTI Photo.