The Federation of Indian Banks, led by the State Bank of India (SBI), has returned to the High Court in London to hear a bankruptcy petition against liquor tycoon Vijay Mallya, after airlines continued to recover loans from non-performing Kingfisher loans.
At a virtual hearing before Chief Bankruptcy and Institutions Court (ICC) Judge Michael Briggs on Friday, both sides dismissed retired Indian Supreme Court judges as expert witnesses to Indian law in support of and against their arguments for the bankruptcy order against Mallya in the UK.
Although the banks argued for the right to waive the security on Indian assets involved in the case in order to recover their debt in the UK, the 65-year-old businessman’s lawyers argued that the public money held by the government was in question. Banks owned in India are exempt from such security discount.
“As a business entity, a bank has the right to use its business acumen to determine what it wants to do with its security,” said Marcia Scherdemian, a lawyer who represents SBI and others.
He cross-examined retired Judge Deepak Verma, who had deposited the video link from India on behalf of Mallya, to ensure that the banks could not waive the protection of Indian assets and then follow the bankruptcy order under English law relating to public money and public interest in this case.
In his cross-examination by Mallya’s barrister Philip Marshall, reverse Judge Gopal Gowda argued that banks had the right to drop their security to pursue unpaid arrears.
The exchange between the lawyers heated up at several points during the virtual trial, and Mallya followed suit, emphasizing the question-and-answer approach that Judge Briggs focused on expediting the proceedings.
However, in this case the depositors do not have time to complete the submissions, which is now postponed to the date not agreed in the New Year.
Meanwhile, Marshall has again raised the issue of access to funds held in court since the sale of a French property to Mallya, who can no longer afford the legal fees of the next trial because he no longer has sources of income from his consulting work.
The SBI-led consortium of 13 Indian banks, including Bank of Baroda, Corporation Bank, Federal Bank Limited, IDBI Bank, Indian Overseas Bank, Jammu and Kashmir Bank, Punjab & Sind Bank, Punjab National Bank, Mysore State Bank and Yuko. Bank, United Bank of India and J.M. Financial Asset Restructuring Pvt Ltd started operations against Mallya in December 2018.
The case is under ongoing investigation as part of their efforts to recover about 1, 1.14 billion in unpaid debts.
Meanwhile, Mallya is out on bail, before the UK Home Office deals with a “secret” legal issue before UK Home Secretary Priti Patel can sign the extradition demanded by the Indian government on charges of fraud and money laundering by Kingfisher Airlines.