Top
state-run lender SBI today sought arrest of Vijay Mallya, and also
impounding of his passport, as the bank approached Debt Recovery
Tribunal seeking action against the UB Group promoter for defaulting on
loans.
Top state-run lender SBI
today sought arrest of Vijay Mallya, and also impounding of his passport, as
the bank approached Debt Recovery Tribunal seeking action against the UB Group
promoter for defaulting on loans. State Bank of India (SBI), that heads the
consortium of 17 lenders to the grounded Kingfisher Airlines, moved the Debt
Recovery Tribunal in Bengaluru against the airline's chairman Mallya in its bid
to recover over Rs 7,000-crore dud loans from him. According to sources, SBI
has moved four applications at the DRT in Bangalore, seeking impounding
Mallya's passport, getting him arrested, securing the lenders' first right on
the payout from Diageo and getting full disclosure of his assets in the country
and abroad. The immediate objective of the lenders moving the DRT is to secure
a first right on the USD 75-million severance package that Mallya will be
getting for quitting Diageo-owned United Spirits (USL) as its chairman last
week. An SBI official confirmed to PTI that they have moved the DRT seeking
right on USD 75 million severance package, as the borrower Mallya who has
already been declared by the bank a wilful defaulter, has decided to leave the
country and settle down in London. Mallya and Kingfisher Airlines owed Rs 7,800
crore to a consortium of 17 lenders led by State Bank which had an exposure of
over Rs 1,600 crore to the now defunct airline. Since January 2012, the loan
was not serviced. Other lenders include Punjab National Bank , Bank of
Baroda , Canara Bank , Bank of India , Central Bank of
India , Federal Bank , Uco Bank and Dena Bank among
others. Last year, SBI declared Mallya as wilful defaulter. Last month, Punjab
National Bank had also declared him, his group holding company United Breweries
Holdings and the long-defunct Kingfisher Airlines as wilful defaulters. As part
of a deal, Diageo said it would pay USD 40 million immediately to Mallya with
the balance being payable in equal installments over the next five years. It
will also absolve Mallya of all liabilities over alleged financial lapses at
the company founded by his family.
According
to a 24 February PTI report, loans worth Rs.11,700
crore given by SBI have been locked up as non-performing assets because 1,160
defaulters had wilfully decided not to repay.
“When an
individual has provided a personal guarantee in favour of a bank, banks proceed
to enforce such guarantees by seeking a disclosure of all assets of the
guarantor,” said Deep Roy, associate partner at Economic Laws Practice.
“They
have a subsequent right to attach relevant assets of a guarantor till the time
the dues are adequately paid,” he said.
He
declined to comment on whether banks can seek the issue of an arrest warrant as
he is not familiar with the facts of the case.
“Under
Section 10 (3) (e) of the Passport Act 1967, the passport authority may impound
or revoke the passport if proceedings in respect of an offence alleged to have
been committed by the holder of the passport or the travel document are pending
before a criminal court in India,” Roy added.
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