A British court awarded Vijay Mallya a bankruptcy judgment on Monday, clearing the way for a consortium of Indian banks led by the State Bank of India (SBI) to seek recovery of debt owed by the now-defunct Kingfisher Airlines through a worldwide freezing order.
“As of 15:42 (UK time), I adjudicate Dr. Mallya bankrupt,” declared Chief Insolvencies and Companies Court (ICC) Judge Michael Briggs during a virtual hearing of the High Court’s Chancery Division in London.
The Indian banks had pushed for the bankruptcy order to be issued in their favor, represented by the legal firm TLT LLP and barrister Marcia Shekerdemian.
Meanwhile, the 65-year-old businessman remains in the UK on bail until the resolution of a “secret” court matter, thought to be connected to an asylum application, in connection with unrelated extradition proceedings.
His lawyer, Philip Marshall, asked for a stay and a postponement of the judgment while legal challenges in India are still pending. The judge, however, denied the petitions, concluding that there was “insufficient proof” that the debt would be paid in full to the petitioners within a reasonable time.
He also filed an application for permission to challenge the bankruptcy ruling, which Judge Briggs denied since such appeal had no “real chance of success.”
The SBI-led consortium of 13 banks, including Bank of Baroda, Corporation Bank, Federal Bank Ltd, IDBI Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Punjab & Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank, United Bank of India, and JM Financial Asset Reconstruction Co. Pvt Ltd, as well as an additional creditor, had been pursuing a bankruptcy order in the state of Andhra Pradesh.
The legal team for Vijay Mallya claimed that the debt was still contested and that the continuing procedures in India prevented a bankruptcy order from being issued in the UK.
The debt in question is made up of principal and interest, as well as compound interest at a rate of 11.5 percent per year starting on June 25, 2013. In India, Vijay Mallya has filed petitions to challenge the compound interest penalty.
