SC to hear banks' plea agnst transfer of USD 40 mn by Mallya

The Supreme Court today said it would hear next week the plea of a consortium of banks that USD 40 million, which liquor baron Vijay Mallya had allegedly transferred to his children, needed to be brought back. A bench, comprising Justices Adarsh Kumar Goel and U U Lalit, considered the submission of senior advocate Shyam Divan, representing the consortium led by State Bank of India, that USD 40 million Mallya had allegedly received from British firm Diageo in February last year and transferred to his children in "flagrant violation" of various judicial orders, including those passed by passed by the Debt Recovery Tribunal and the Karnataka High Court.

The court decided to hear the matter on March 9. The banks prayed that orders be passed to "secure the deposit of the said amount of USD 40 million before this court or the DRT forthwith, pending disposal of the further recovery proceedings." The bench, on January 11, had granted three weeks to Mallya to file an affidavit in response to the plea of banks. Divan said the banks had also filed a plea seeking initiation of contempt proceedings against Mallya.

It is a matter of record that Mallya and his firm owe over Rs 6,200 crore to the banks and the money should have been deposited here, he had said. In October last year, the court had rapped Mallya for not making full disclosure of his overseas properties and had asked him to do so within a month. The bench had also pulled up Mallya for not giving details of USD 40 million which he had allegedly received from British firm Diageo in February last year, saying it was of the "prima facie view" that proper disclosure as per its earlier order was not made.

The consortium of banks including SBI had alleged that the USD 40 million belonged to the consortium of banks which was now stashed in Mallya's Swiss bank account and said it should be brought back to India or the Supreme Court. The banks had on August 29 last year told the Supreme Court that Mallya had deliberately not made full disclosure of his assets including the USD 40 million he received on February 25 from Diageo.

It had asked Mallya, who owes over Rs 9,000 crore to around 17 banks, to deposit a "substantial amount" with it to "prove his bonafide" that he was "serious" about meaningful negotiations and settlement.