Vijay Mallya pursues annulment of UK bankruptcy order over ‘unreal quality’

London: Embattled businessman Vijay Mallya believes Indian banks pursuing bankruptcy proceedings against him in the English courts have assumed an “unreal quality” in the wake of Union Finance Minister Nirmala Sitharaman’s recent statement in Parliament and has instructed his lawyers to pursue an annulment application.

It emerged as Justice Anthony Mann reserved judgment, to be handed down at a later date after hearings of three interlinked appeals related to Mallya's bankruptcy order concluded at the High Court in London this 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 GBP 1.05 billion owed by the 69-year-old businessman’s now-defunct Kingfisher Airlines.

“From Dr Mallya’s perspective, these English bankruptcy proceedings have an unreal quality,” Leigh Crestohl, Managing Partner of Zaiwalla and Co–Mallya’s recently appointed lawyers, told PTI.

“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. This was confirmed by the Honourable Finance Minister of India, Shrimati Nirmala Sitharaman, in a statement she made in the Indian Parliament on 17 December 2024, in which she confirmed that a sum of INR 14,131.6 crore has been collected and restored to the banks,” he said.

Crestohl stressed that "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, 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.

Separately wanted in India on fraud and money laundering charges, Mallya took to social media a day after Sitharaman’s Lok Sabha statement to claim he was "entitled to relief" in the matter.

In a post on X dated 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.”

Meanwhile this 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, referred to as the security appeal, challenges Judge Briggs’ conclusion that the banks – represented by TLT LLP and barrister Tony Beswetherick – were “estopped because 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 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 in this case, which led to a bankruptcy order against Mallya on July 26, 2021. Appeals against that order and related matters have remained ongoing ever since.

Separately, concerning India's extradition request, Mallya 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 in India and the UK.