EMBATTLED businessman Vijay Mallya has instructed his lawyers in the UK to pursue an annulment application against his bankruptcy order, with his legal team set to argue that India’s central finance minister Nirmala Sitharaman’s statement in parliament in December last year gives the order a n “unreal quality”.
UK justice Anthony Mann reserved judgment, to be handed down at a later date, after hearings on three interlinked appeals that are related to Mallya’s bankruptcy order concluded at the high court in London last week.
The judge heard a set of complicated arguments involving a consortium of banks led by the State Bank of India (SBI) seeking repayment of an estimated judgment debt of around £1.05 billion owed by the 69-year-old businessman’s now-defunct Kingfisher Airlines.
Mallya is wanted in India on fraud and money laundering charges.
“From Mallya’s perspective, these English bankruptcy proceedings have an unreal quality,” Leigh Crestohl, managing partner of Zaiwalla and Co, Mallya’s new lawyers, said.
“Evidence has now come to light that shows that the banks’ debt has not only been paid but, moreover, the banks have recovered in excess of what was due from Dr Mallya,” Crestohl said, citing Sitharaman’s statement in India’s parliament on December 17 last year.
The Indian cabinet minister confirmed to MPs that “a sum of `14,131.6 crore has been collected and restored to the banks”, he said.
Crestohl said “it must be presumed” that the public sector banks will accept the accuracy of the minister’s statement made in parliament.
“This is why immediately after instructing Zaiwalla and Co in place of his previous lawyer Reynolds Porter Chamberlain last week, Dr Mallya has now applied to annul the bankruptcy order on that basis. He intends to pursue that application regardless of what the court may decide on the appeals that were heard this week,” added Crestohl.
Mallya took to social media a day after Sitharaman statement in the Lok Sabha (lower house of India’s parliament) to claim he was “entitled to relief” in the matter.
In a post on X on December 18 last year, he said: “Unless the ED (Enforcement Directorate) and banks can legally justify how they have taken more than two times the debt, I am entitled to the relief which I will pursue.”
In the UK last week, justice Mann heard appeals related to a decision of Chief Insolvencies and Companies Court (ICC) judge Michael Briggs, made in the context of bankruptcy proceedings initiated by the banks against Mallya around six years ago.
The first appeal or the security appeal, challenges judge Briggs’ conclusion that the banks were “estopped by reason of an Indian court judgment” from denying that they hold security over certain of Mallya’s assets.
Two further appeals against the amendment of the bankruptcy order and the July 2021 bankruptcy order itself were also heard alongside, with Zaiwalla and Co lawyer Kartik Mittal and barrister Mark Watson-Gandy appearing on behalf of Mallya in court.
The hearings in the case of the State Bank of India and Others date back to May 2018 when the banks were granted a worldwide freezing order (WFO) based on a judgment of the Bangalore Debt Recovery Tribunal (DRT).
Since then, there have been a series of hearings, which led to a bankruptcy order on July 26, 2021. Appeals against that order and related matters have remained ongoing ever since.
India has made an extradition request for Mallya who remains on bail in the UK while a “confidential” legal matter believed to be related to an asylum application is resolved. He has long denied wrongdoing and argued that the Indian banks have been pursuing the same debt owed by his defunct airline both in India and the UK.
