'Mallya can't use pendency of plea on settling dues'

The Supreme Court on Monday made it clear that fugitive industrialist Vijay Mallya cannot cite pendency of his offer to settle dues of over Rs 9,000 crore as a ground to avoid insolvency proceedings in a London court.

A bench of Chief Justice S A Bobde and Justices B R Gavai and Surya Kant issued the clarification after Solicitor General Tushar Mehta contended Mallya was using pendency of the matter before the top court to avoid judgement in insolvency proceedings initiated by the major lender SBI before the London Court.

“Mallya said the proposal to pay back money was pending, though he did not pay a single rupee,” Mehta pointed out.

On this, the bench said, “pendency of the matter here shall not be used for seeking adjournment in any other proceedings anywhere in the world.”

The top court put the plea made by Mallya and his company United Breweries for consideration on Friday.

Mallya challenged a Bombay High Court's order declining to stay the proceedings initiated by the Enforcement Directorate for the confiscation of properties, including “untainted assets” after Kingfisher Airlines became defunct with thousands of crores of bank debt.

Mallya, facing extradition proceedings in the United Kingdom, had challenged the vires of the Fugitive Economic Offenders Act, 2018 before the Bombay high court on the ground that the law sought to confiscate all properties of a fugitive economic offender. On April 24, 2019, the high court issued notice to the Attorney General but refused to stay the proceedings before the special court started on a plea by the Enforcement Directorate for the confiscation of properties.

The ED had invoked provisions of the Fugitive Offenders Act, 2018 against Mallya, who had evaded the authorities after defaulting to pay back the loan of over Rs 9000 crore to the banks.

The apex court had on July 14, 2017 refrained from passing sentence against industrialist Mallya in the contempt case as the Union government could not produce him, citing extradition proceedings. On May 9, 2017 the court had held him guilty of contempt of court.