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The loan recovery proceedings in the Kingfisher Airlines (KFA) case seem to be on the fast track. The Supreme Court on Tuesday listed for hearing on Wednesday a plea by a consortium of 17 banks seeking a direction that Vijay Mallya be restrained from leaving the country.
The consortium of banks, led by SBI, has launched a recovery drive on multiple fronts: the Debt Recovery Tribunal, Karnataka High Court, Bengaluru Civil Court and the Supreme Court — to recover dues.
According to bankers, the recovery proceedings will be a test case for banks to recover loans in other cases, too. They could turn the heat on other large corporates that have defaulted on loans.
Bankers estimate that the dues could have swelled to about ₹9,000 crore (principal plus interest) from about ₹7,000 crore.
According to agency reports, when Attorney-General Mukul Rohatgi, appearing for public sector banks, mentioned the matter for an urgent hearing, the Supreme Court bench comprising Chief Justice TS Thakur and Justice UU Lalit said: “List it for hearing tomorrow.”
Closing in On Monday, the Bengaluru DRT restrained UK-based Diageo plc from paying $75 million to Mallya under the terms of an agreement the company signed with him.
The Presiding Officer of the Tribunal also directed Mallya not to receive temporarily the sum as per the agreement.
It stated that the sum would stand attached till further orders on the proceedings initiated by banks to recover the money borrowed by Kingfisher Airlines.
Further, Diageo plc and Mallya were directed to disclose the details of the agreement to the consortium of banks led by SBI, which has claimed the first right over the $75 million that Mallya is to receive from Diageo.
The Enforcement Directorate has filed a case under the Prevention of Money Laundering Act against Mallya and six other executives of Kingfisher Airlines in connection with the alleged default on a loan of over ₹900-crore from IDBI Bank.
The case is based on an FIR registered last year by the Central Bureau of Investigation (CBI).
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