Indian banks win bankruptcy appeal in Vijay Mallya case in UK

An key legal action against Vijay Mallya, the former owner of Kingfisher Airlines, has been won in London by a group of Indian banks, led by the State Bank of India (SBI). The case concerned Mallya's recovery of a sizable debt following the failure of his airline. Options for home loans

Anthony Mann, a judge at the London High Court, made the announcement on Wednesday. The bankruptcy ruling against Vijay Mallya is still in effect as a result of his decision in favor of the Indian banks. For the banks, this is a significant step in recovering their funds.

What Is the Case About?

Following a decision by the Debt Recovery Tribunal (DRT) in India, Indian banks sued Mallya in the UK back in 2017.  Due to Mallya's personal guarantee for Kingfisher Airlines' loans, the DRT has ordered him to repay more than GBP 1.12 billion, or around Rs 11,000 crore.

 In the United Kingdom, the banks filed for bankruptcy against Mallya in 2018.  Mallya attempted to halt it by claiming that the banks had security on his assets and that he had previously offered enough assets in India that had been confiscated by the Enforcement Directorate(ED).

What Happened in the Court?

A UK court ruled in 2020 that the banks did have security over Mallya's assets, which partially invalidated the bankruptcy petition.  However, the banks appealed that decision, and they were granted permission to do so in 2021.  Additionally, they amended their bankruptcy petition to state that they would relinquish any claim to Mallya's Indian assets in the event that he was found bankrupt.

 Mallya resisted this modification, claiming it violated Indian law and public policy.  However, the UK court ruled in April 2021 that the modification was lawful and did not violate any Indian regulations.

Now, in the latest ruling, the High Court has:

• Allowed the banks’ appeal that they do not hold security on Mallya’s assets
• Rejected Mallya’s attempt to challenge the bankruptcy order
• Said the bankruptcy order against Mallya stands firm

What the Banks’ Lawyers Said

The law firm TLT LLP, which represents the banks, said this decision is very important. It proves that the banks were right to file the bankruptcy case and that the assets taken by the ED in India don’t cancel the debt under English law.
Nick Curling, legal director at TLT, said, “This is a big win for the banks. We have been working on this case since 2017.”

What Vijay Mallya’s Side Says

Mallya, who filed for bankruptcy in July 2021, is currently pursuing a different legal path. He has applied to the UK court to have the bankruptcy judgment revoked, claiming that the assets in India were sufficient to cover the banks' payments.

Mallya will keep fighting, according to his attorney Leigh Crestohl, who has also filed a separate petition in India's Karnataka High Court. He requests that the banks provide a detailed report on their recovery efforts.

Meanwhile, Mallya is still out on bail in the UK. He is also involved in a private legal matter, which is believed to be related to his asylum request in the UK. This is separate from his extradition case to India, where he is wanted on charges of fraud and money laundering.