Instead of clearing loan, Mallya diverted $40 million to family trusts, banks tell SC

R Sedhuraman 

Legal Correspondent

New Delhi, January 11

The Supreme Court on Wednesday sought liquor baron Vijay Mallya’s response within three weeks to the charge that he misappropriated 40 million dollars by giving it to his family trusts instead of repaying bank loans amounting to Rs 9,000 crore.

A Bench comprising Justices Kurian Joseph and AM Khanwilkar posted the next hearing for February 2 as the consortium of 17 banks pleaded that Mallya had received 40 million dollars from Diageo, a liquor firm based in Britain, on February 25, 2016, by selling one of his companies.

The defaulter, who has since fled to Britain, transferred the funds to trusts run by his children in violation of judicial orders.

The Bench was hearing the plea of the banks led by the State Bank of India (SBI) to take action against Mallya for committing contempt of court.

Earlier, the defaulter’s senior counsel CS Vaidyanathan had pleaded that his client did not mention the receipt of 40 million dollars in his response to the court notice on the contempt petition by the banks as the Bench had asked him to disclose only the assets and liabilities, not revenue and expenditure.

Unconvinced, the Bench had said Mallya was not getting the spirit of the court order. Since he was facing charges of contempt of court he should have come clean, disclosing the details of assets in full, instead of finding excuses to withhold information.

Arguing for the banks, Attorney General Mukul Rohatgi had pleaded that Mallya was trying to deceive the court and the banks by playing tricks on the Bench.

The banks had given loans to his companies—the now defunct Kingfisher Airlines, United Breweries and Kingfisher Finvest (India) Ltd.