Vijay Mallya loses bankruptcy petition amendment High Court battle in UK

A consortium of Indian banks led by State Bank of India (SBI) on Tuesday moved a step closer in ir attempt to recover debt from loans paid out to Vijay Mallya’s now-defunct Kingfisher Airlines after High Court in London upheld an application to amend ir bankruptcy petition, in favour of waiving ir security over businessman’s assets in India.

Chief Insolvencies and Companies Court (ICC) Judge Michael Briggs handed down his judgment in favour of banks to declare re is no public policy that prevents a waiver of security rights, as argued by Mallya’s lawyers.

At a virtual hearing, July 26 was set as date for final arguments for and against granting a bankruptcy order against Mallya after banks accused him of trying to “kick matters into long grass” and called on “bankruptcy petition to be brought to its inevitable end”.

“I order that permission be given to amend petition to re as follows: ‘ Petitioners (banks) having right to enforce any security held are willing, in event of a bankruptcy order being me, to give up any such security for benefit of all bankrupt’s creditors’,” Justice Briggs’ judgment res.

“re is nothing in statutory provisions that prevent Petitioners from giving up security,” he notes.

Mallya’s barrister, Philip Marshall, h referenced witness statements of retired Indian judges in previous hearings to reiterate that re is “public interest under Indian law” by virtue of banks being nationalised.

However, Justice Briggs found no impediment to creditors relinquishing ir security under Indian law because of engagement of a “principle concerning public interest” and favoured submissions me by retired Indian Supreme Court judge Gopala Gowda at a hearing in December 2020 in this regard.

“In my judgment simple stance taken by Justice Gowda that Section 47 PIA 1920 is evidence of ability of a secured creditor to relinquish creditor’s security is to be preferred,” ruling notes.

Indian banks, represented by law firm TLT LLP and barrister Marcia Shekerdemian, were also granted costs in totality for petition hearings, as “overall successful” party in case.

“Dr Mallya should have been extrited by now. He was refused permission to go to Supreme Court in May last year,” Shekerdemian pointed out, in reference to one of Mallya’s defence planks that cases against him are “politically motivated”.

65-year-old businessman remains on bail in UK while a “confidential” legal matter, believed to be related to an asylum application, is resolved in connection with unrelated extrition proceedings.