London: A consortium of Indian banks, led by the State Bank of India (SBI), on Friday pleaded strongly to the fugitive liquor businessman Vijay Mallya to be declared bankrupt during a hearing in the London High Court. Mallya owes thousands of crores of rupees loaned for the closed Kingfisher Airlines. In a virtual hearing before Justice Michael Briggs in the Chief Insolvency and Company Court (ICC), the two sides presented their final arguments in the case after amending the insolvency petition filed last year.
Apart from SBI, this group of banks includes Bank of Baroda, Corporation Bank, Federal Bank Limited, IDBI Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Punjab & Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank, United Bank Of India and JM Financial Asset Reconstruction Company Private Limited. Justice Briggs said that he would now consider the details and decide at the appropriate time in the coming weeks.
On the other hand, the fugitive Mallya says that the debt owed on him is ‘public money’, in which case banks cannot declare him bankrupt. Mallya claimed that the bankruptcy petition filed by Indian banks was not within the purview of the law, as banks could not impose a penalty on the security of their assets in India as it was against the public interest in India. Mallya said, ‘The money he borrowed was’ public money’.
Mallya said- ‘the money belongs to the public’
Advocate Philip Marshall, appearing for Mallya in the court, told the Insolvency and Companies Court on Friday that under Indian law, banks will not be allowed to leave security on Mallya’s Indian assets. The money lent by the nationalized banks was public. He argued that any bankruptcy petition made as a result of the amended petition was ‘made on a false basis.
Marshall said, “It is not appropriate for Indian banks to say that there is no interest in the security of Mallya’s assets before this court.” While he was in exactly the opposite position during the proceedings in India. Marshall said that most of the Rs 11,000 crore is ‘interest on debt’ and Mallya is appearing in Indian courts on the issue of that interest.
Marcia Shekedemian, representing the banks, said, ‘There is no general policy of public policy in India which prevents a bank from removing security and which is nowhere in Indian law. How can a bank not deal with the security as it wishes?
