Vijay Mallya moves Karnataka High Court, urges banks to stop charging interest on amounts already recovered

The banks have argued that all recoveries made remained temporary, until the liquor baron submitted to the court jurisdiction.

Bengaluru: Fugitive liquor baron Vijay Mallya on Tuesday requested the Karnataka High Court to direct banks to stop charging interest on amounts already recovered from him and the Kingfisher Airlines.

Meanwhile, the banks have argued that all recoveries made remained temporary until Mallya submitted to the court jurisdiction.

Justice Lalitha Kanneganti posted the matter to November 12 granting time to the advocate for the Official Liquidator to file a statement of objections.

In his petition, Mallya has sought a direction to the banks to provide him the details regarding amounts realised and the details of original owners of the assets utilised for realising the amounts in terms of the amended recovery certificate issued by the Debt Recovery Tribunal (DRT) on April 10, 2017. He has also sought a statement of assets either belonging to him, firms or third parties, which are available and unutilised for the purpose of satisfying the debt owed under the amended recovery certificate. He has stated that additional recovery proceedings are still being carried out against him even after the recovery.

Senior Advocate Sajan Poovayya, appearing for MaltMallya, submitted that recoveries already exceeded the owed amount. He cited a press release issued by the Enforcement Directorate on July 16, 2021, stating that Rs 7,181 crore has been recovered. He said that the Finance Ministry’s report for 2024-25 has also confirmed the restoration of the complete amount and that Rs 14,000 crore assets were restored to the banks. The lender banks cannot claim that recovery made through court cannot be construed as final recovery, he argued.

On the other hand, Senior Advocate Vikram Huilgol, representing the banks, submitted that all recoveries remained temporary until Mallya, declared a fugitive, submitted to the court jurisdiction. He said the banks were bound by statutory schemes treating recoveries as provisional, since various proceedings, orders of attachment under the provisions of Prevention of Money Laundering (PMLA) Act, have been in place since June 2016.

During the hearing, the court noted that finality would only be attained when Mallya faced the proceedings. The court also pointed out an Apex Court order questioning relief to a non-resident petitioner. To this, senior advocate Poovayya said that the petitioner was bound by an English court order preventing his departure from the United Kingdom (UK) and this fact was brought to the notice of the Apex Court.