Vijay Mallya gets temporary bankruptcy reprieve at UK High Court amid 'extraordinary plea'

In a relief to Liquor baron Vijay Mallya, High Court in London has deferred hearings on a plea by SBI-led consortium of Indian banks, seeking indebted tycoon to be declared bankrupt to enable m to recover a loan of around GBP 1.145 billion from him. Justice Michael Briggs of insolvency division of High Court granted relief to Mallya, ruling that he should be given time till his petitions to Supreme Court of India and his settlement proposal before Karnataka High Court be determined, allowing him time to repay his debts to banks in full.

Chief Insolvency and Company Court judge Briggs, in his verdict delivered Thursday, said re is obvious vant to banks to pursue this class action at this point in time. "This bankruptcy petition is by any measure extraordinary. banks are pressing for a bankruptcy order at a time when re are extant proceedings in India," re judgment.

"In my judgment banks are secured, at least in part hearing of petition should be journed for purpose of amendment and for time to pay debts in full," it ted. A consortium of Indian public sector banks led by State Bank of India h sought a bankruptcy order against Mallya as part of efforts to recoup around GBP 1.145 billion of unpaid loans from Vijay Mallya.

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Judge Briggs h reserved his judgment after hearing arguments from both sides in December last year over loans to Mallya's w-defunct Kingfisher Airlines. In his judgment, judge concluded that legal cases being pursued by Mallya in India stood a reasonable prospect of success.

"Although petition to Supreme Court and proposal before Karnataka High Court is t guaranteed to succeed, y are genuine. evidence supports view that petitions stand a reasonable prospect of success," he said. According to court document, judgment on bankruptcy petition was produced in December last year and circulated in January this year but its handing-down was journed for furr argument at request of parties.

" parties agreed to a hearing after 1 June 2020. outbreak of COVID-19 has me fixing a date uncertain. In my judgment it is in interests of ministration of justice and in public interest that this judgment be handed down w," ruling ted. While banks h argued for a bankruptcy order to ensure y receive what is owed to m amid a multiplicity of creditors, Mallya's lawyers stressed that Indian banks were identified as secured creditors by Indian courts, which makes bankruptcy petition in UK court unfair.

"Why should we take less than everything we are owed," said Marcia Shekerdemian, barrister for Indian banks, referring Mallya's settlement offers. During hearing last year, court h also heard that banks do t accept former Kingfisher Airlines boss' assertion that most of his assets are in India and to a lesser extent worldwide.

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A villa in France and assets spre across British Virgin Islands, a trust registered in Caribbean nation of St Kitts & Nevis and Indian Empress superyacht in Malta were some of Mallya's worldwide assets referred to during course of hearing. Mallya's legal team, led by barrister Philip Marshall, sought dismissal of bankruptcy petition, arguing that ir client was being unfairly pursued by banks in India and UK on opposite grounds.

"Payment has been inhibited by virtue of intervention by Enforcement Directorate of India banks are seeking a bankruptcy order against Dr. Mallya for n-payment but have created a situation where he can't make a payment," Marshall told court. A previous UK High Court ruling h refused to overturn a worldwide order freezing Mallya's assets and upheld an Indian court's ruling that consortium of 13 Indian banks was entitled to recover funds amounting to nearly GBP 1.145 billion.

banks n launched efforts to recover dues as part of freezing order, with bankruptcy petition aimed at seizing UK-based Mallya's assets to recover dues. Meanwhile, Mallya remains on bail pending a UK High Court ruling in extrition proceedings brought by India in relation to charges of fraud and money laundering amounting to an alleged Rs 9,000 crores.

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