ED says no objection to restoration of Mallya's properties to banks

The Enforcement Directorate (ED) on Tuesday told a special court in Mumbai that in "public interest" it had no objection to the liquidation of fugitive businessman Vijay Mallya's properties by a consortium of banks led by the State Bank of India (SBI), which had lent about Rs 9,000 crore to Mallya's now defunct Kingfisher Airlines. The central probe agency submitted its affidavit in response to an application filed by the consortium last month seeking the release of Mallya's assets under the amended Section 8 (8) of the PMLA Act.

As per the amendment, a special court may allow restoration of properties even during the trial phase in certain cases. However, the affidavit also made it clear that "in case the court deems it fit to allow the application", the banks will have to give an undertaking to return the amount claimed by them to the court or to the complainant without delay "in the unlikely event" of Mallya winning the trial.

According to The Economic Times, the lenders want to liquidate Mallya's assets to claim Rs 6,203.35 crore along with interest of 11.5 per cent per annum payable since 2013. The banks claimed a "legitimate interest" in all the properties belonging to Mallya, Kingfisher Airlines, United Breweries Holdings and Kingfisher Finvest India Ltd, including movable and immovable properties.

In its affidavit filed before special PMLA Judge MS Azmi, the ED said it had left it to the best judgement of the court to grant the prayer made by the bank consortium. "In light of these facts and circumstances, it is prayed that the court may graciously be pleased to allow the instant application in the interest of justice and/or pass any such order that it deems fit in the interest of justice," the ED submitted.

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The agency further said that since all the applicants, except one, were public banks - "thus carry with themselves a sovereign guarantee" - and the money sought to be recovered was public money, restoration of assets in their favour was in public interest.

The Mumbai special court has reportedly adjourned the matter till March 13. "The banks want to encash the assets at the earliest so as to bring the money back into the system. Recently, the DRT (Debt Recovery Tribunal) also allowed attachment and sale of the properties," senior counsel Nitin Pradhan, who represented the banks, told the daily. "The court has asked Mallya and other parties staking claim on the confiscated properties to file their say by then [March 13]."

Also read: Vijay Mallya to appeal against UK Home Secretary's extradition order

Significantly, the ED's nod comes a day after Mallya's extradition to India was approved by the UK Home Secretary. However, the liquor baron still has fourteen days from the date of the order to appeal against his extradition before the High Court, something he has decided to do.

Furthermore, Mallya still has three more courts to appeal to before exhausting his options. The next court is the Crown Court from where it will lead to the Queen's Bench of High Court of Justice followed by the UK Supreme Court. So this is one extradition that is unlikely to happen in a hurry, if at all. No wonder the bank consortium wants to get a head start on the recovery drive.

With PTI inputs

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