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United Breweries (Holding) Ltd of businessman Vijay Mallya on Wednesday moved a Division Bench of the Karnataka High Court challenging the order for winding up the company for its failure to pay admitted liabilities to the unsecured and secured creditors, including the banks, as per its corporate guarantee extended to Kingfisher Airlines Ltd (KFA).
The Court asked the company’s counsel to seek instruction on how much amount the company can deposit for taking up the hearing of the appeal against the order for winding up.
The Bench comprising Chief Justice Subhro Kamal Mukherjee and Justice Budihal R.B made oral observations in this regard when an appeal filed by UBHL against the February 7, 2017, order passed by a single judge bench for winding up of the company on a petition filed by consortium of banks led by the State Bank of India.
The single judge bench had declared that “UBHL is a commercially insolvent company and is unable to meet its admitted financial obligations and square up its admitted liability towards the petitioning creditors”.
When Senior Counsel Uday Holla, appearing for UBHL, pointed out that it is a going company, the Bench orally said that the company needs to deposit some amount to show its bonafides, while also observing that the company can also make a “fair one-time settlement” offer to the consortium of banks.
“We know that winding up of any company is not good as it affects several employees but interest of creditors is also important...”, the Bench added.
To this, Holla said that an one-time settlement offer was already made by the company, while also pointing out that a deposit of around ₹1,280 crore, received from sale of shares, is already with the High Court’s registry during the pendency of petitions filed for winding up of UBHL.
However , Senior Counsel SS Naganand told the Bench that an offer for settlement of dues was submitted during the proceedings pending before the Supreme Court but the offer was not acceptable to the banks.
He also pointed out that “fair settlement” is only being “tweeted” (referring to Mallya’s tweets in this subject), but nothing has been offered to the banks other than what has been told to the apex court.
The Bench adjourned hearing till March 22, while asking the UBHL counsel to seek instruction on the amount to be deposited for enabling the Bench to hear the company’s appeal.
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