Is Mallya set to face Indian courts soon?

IN PERSPECTIVE

The Vijay Mallya extradition case has generated a lot of buzz in the country as he has turned from the “king of good times” to the poster boy of the recent breed of fugitive business tycoons after he fled the country in March 2016. The Government of India made a formal extradition request to Britain in February 2017. The UK High Court, by its judgement on April 20, dismissed the appeal filed by Mallya against the judgement of December 10, 2018 judgement of Westminster Court paving the way for him to be extradited to India. After the dismissal of the appeal, Mallya filed an application seeking permission to approach the Supreme Court of the United Kingdom, which was also rejected by the UK High Court on May 14, thus setting a 28-day deadline for him to be extradited. That deadline expires on June 12.

Extradition is based on the maxim ‘aut punier aut dedere’. That is, the offender must be punished by the State of refuge or surrender to the State which can and will punish him. There were broadly three allegations against Mallya: Conspiracy to commit fraud; making false representations; and money laundering. The SDJ (Senior District Judge) Court, Westminster, as well as the Queens Court Divisional Bench of the UK High Court dealt with the allegations comprehensively.

Mallya’s appeal before the UK High Court was admitted only on the ground of Section 84(1) of the UK Extradition Act, 2003, a case where a person has not been convicted. Essentially, the UK High Court had to decide whether a ‘prima facie’ case has been made so as to require the person to face trial. The grounds of Mallya’s appeal – that the case against him was politically motivated and of poor prison conditions in India -- were rejected.

On examination, the UK High Court was convinced that prima facie, a strong case exists against Mallya. Interestingly, the courts arrived at this conclusion by examining the essence of Mallya’s conduct both after and before taking the loan in order to decide his complicity prima facie. Evidence recorded under section 161 of CrPC, 1973 (India) is not admissible directly before Indian courts, being hearsay evidence. However, interestingly, section 84(2) and (3) of the Extradition Act (UK) allows for such evidence, along with oral evidence, to be admitted. Moreover, the UK High Court held that documents which, even if not authenticated by the makers/witness, are admissible under section 202(5) of the UK Extradition Act. Examination of section 161 evidence, along with seized emails between Mallya and his executives at Kingfisher Airlines and UB Group, tightened the noose around him. The courts found clear evidence that a reasonable jury would be likely to convict Mallya for the alleged offences if they were committed in the UK.

The alleged co-conspirators at IDBI Bank also flouted even the basic rules of the bank to lend money to Mallya. On this, the SDJ Court remarked that “various continuing failures were by a design and with a motive (possibly financial), though not clear from evidence, or it is a case of Bank who were in the thrall of this (flashy) ostensibly billionaire playboy who charmed and cajoled these bankers into losing their common sense”.

There was clear evidence of loan money being used and diverted for purposes other than for which the loans were sanctioned (a round robin), thereby establishing a prima facie offence of money laundering.

Significantly, the rules of recording evidence in an extradition request before the UK courts is different to that in India, which would make it really difficult for fugitive absconders such as Nirav Modi to escape the clutches of the law. Another interesting takeaway from the judgement is that it is not necessary to show direct evidence of the involvement of the fugitive offender for a prima facie case to be made out. This practice adopted by English Courts is welcome because getting direct evidence against economic offenders is often difficult because these crimes are committed smartly and covered under layers and a maze of paper trail. In such cases, the essence of conduct and circumstantial evidence must be given due weightage to deduce culpability of the accused, as was done in Mallya’s case.

Learning lessons from many alleged offenders going absconding, Parliament enacted the Fugitive Economic Offenders Act, 2018, whereby a person can be declared a fugitive economic offender in case of an offence involving Rs 100 crore or more and the proceeds of crime in India as well as abroad can be attached. In the case of Mallya as well, the UK High Court had passed an order allowing seizure of his properties in the UK in July 2018. The progressive manner in which the UK courts have dealt with the Mallya extradition case, coupled with the stringent provisions of the Fugitive Economic Offenders Act, 2018, will make it really difficult for other economic offenders who chose to flee to the UK.

It is likely that Mallya has applied for asylum in the UK to earn a temporary reprieve. But he is unlikely to succeed, but as per section 39(3) of the Extradition Act, 2003, a person cannot be extradited unless his asylum request is finally determined. Apart from this, he may approach the European Court of Human Rights, citing fear of inhumane treatment in Indian prisons, a fear which has been allayed, again at the extradition hearing itself. All these tactics are purely dilatory, meant to delay the inevitable. Perhaps the time has come to tweak the rules of evidence in India in cases of economic offences so as to ensure that justice is done timely in such cases. In Mallya’s case, we may have to wait for some more time before he faces the Indian courts.

(The writer is an Advocate on Record in the Supreme Court of India)