Debt recovered ‘multiple times over’, says Vijay Mallya; Karnataka HC issues notice to banks

Vijay Mallya challenges banks over excess loan recovery in Karnataka HC

Fugitive businessman Vijay Mallya on Wednesday claimed before the Karnataka High Court that the Rs.6,200 crore debt he owes to banks has been recovered “multiple times over,” and sought a statement, detailing the amounts recovered from him, United Breweries Holdings Limited (UBHL, now in liquidation), and other certificate debtors. The High Court issued a notice to banks in response to the petition filed by Mallya on February 3. Justice R Devdas directed the banks to respond by February 13.

As an interim relief, the petition also sought a stay on any further asset sales by banks under the amended recovery certificate until clarity is provided on the full settlement of the debt. Senior advocate Sajan Poovayya, representing Mallya, argued that the winding-up order against Kingfisher Airlines and its holding company, UBHL, had been upheld at all judicial levels, including the Supreme Court.

Poovayya contended that the debts had already been recovered, yet additional recovery proceedings continued against Mallya. He also informed the court that a debt recovery tribunal (DRT) had ordered Kingfisher Airlines, as the primary debtor, and UBHL, as the guarantor, to pay Rs.6,200 crore.

“That order attained finality. However, between 2017 and now, the Rs.6,200 crore has been recovered multiple times over. According to an admitted statement, as of today, the recovery officer confirms that Rs.10,200 crore has been recovered. Additionally, the official liquidator states that the banks have regained their dues, and even the Finance Minister informed Parliament that Rs.14,000 crore has been recovered,” he stated.

A few months back, Vijay Mallya posted in X also, challenging Finance Minister Nirmala Sitharaman’s speech on recovering money from fugitives like him:

The Debt Recovery Tribunal adjudged the KFA debt at Rs 6203 crores including Rs 1200 crores of interest. The FM announced in Parliament that through the ED,Banks have recovered Rs 14,131.60 crores from me against the judgement debt of Rs 6203 crores and I am still an economic…

— Vijay Mallya (@TheVijayMallya) December 18, 2024

Mallya’s advocate clarified that the petition does not dispute the repayment of loans, but argues that under the Companies Act, once the debt is fully repaid, the guarantor company (UBHL) has no remaining liability and can seek revival. However, this process requires a certification from the recovery officer confirming that the debt has been fully settled, which has not yet been issued. Meanwhile, recoveries continue without clarity on whether the primary debt has been entirely paid, the petition said.

The plea requests the banks to provide a statement detailing the amounts recovered in their favour, along with information about the original owners of the assets used to generate these recoveries, following the amended recovery certificate issued by the DRT on April 10, 2017.

Additionally, it seeks a record of any assets belonging to Mallya, UBHL, or third parties that remain with the banks but have not yet been utilized for loan recovery.

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