Bengaluru, January 19: Closing a three-year long legal battle between the SBI led Consortium of 17 banks and Liquor baron Vijaya Mallya, the Debt Recovery Tribunal (DRT) today allowed the banks to start the process of recovering Rs 6203 crore loan from his assets.
Allowing a joint petition filed in June 2013 by banks consortium, the Tribunal’s Presiding Officer K Sreenivasan said, “I hereby ask the bankers to start the process of recovery of Rs 6,203 crore at the interest rate of 11.5 per cent per annum from Mallya and his companies including UBHL, Kingfisher Finvest and Kingfisher Airlines.”
After the proceedings, SBI counsel told reporters that tribunal has directed the banks to initiate the recovery proceedings by attaching the properties of Mallya and the airline for defaulting on loans up to Rs 9,091 crore, including compound interest.
Mallya is currently living in UK and left the country on March 2 last year after the consortium moved the Tribunal in February last year to expedite the hearing on its recovery petition.
When beleaguered Mallya did not respond to the Tribunal’s earlier directives, the consortium in June 2016 sought a recovery certificate from it to sell off his properties in lieu of the defaulted loans to his airline.
SBI and state-run Punjab National Bank had declared Mallya, the airline and its holding firm UBHL (United Breweries Holdings Ltd) as “wilful defaulters” in 2015.
Besides SBI, other state-run and private banks that gave loans to Kingfisher include State Bank of Baroda, State Bank of Mysore, Axis Bank, Corporation Bank, Federal Bank, Indian Overseas Bank, Jammu and Kashmir Bank, IDBI Bank, Punjab National Bank, Punjab and Sind Bank, UCO Bank and United Bank of India.
On March 7, 2016, the Tribunal ordered British liquor major Diageo plc not to pay Mallya the $75 million (Rs 504 crore) as a severance package to quit its Indian arm United Spirits Ltd till it decided on the debt recovery case.