LONDON: Fugitive economic offender Vijay Mallya has failed to have a court order freezing £259,000 (Rs 2.34 crore) in his UK bank account overturned despite arguing it is oppressive, thwarts his ability to meet his living and legal expenses and breac
4/18/2019

NMN | London | Thursday | 5:30 PM | April/18/2019 

 

But the 63-year-old has managed to prevent the 13 Indian banks to whom he now owes nearly Rs 11,000 crore (£1.142 billion) from getting their hands on the money until at least 2020.

A hearing on whether to make an interim third party debt order on Mallya’s UK ICICI bank account final — which would have forced ICICI to hand over the £259,000 to the banks immediately — has been adjourned until after the hearing of Mallya’s bankruptcy petition, scheduled in December.

The banks had obtained the interim third party debt order attaching £259,000 on January 14, 2019.

At a hearing on April 3, the banks had applied to make the order “final”, arguing they were Mallya’s largest creditor and he was running up debts whilst “continuing to lead a lavish lifestyle”.

But Mallya’s barrister, John Brisby QC, applied to have the interim debt order set aside and to oppose it being made “final”, arguing that £259,000 was “peanuts” relative to the judgment debt and the banks had on September 11, 2018, presented a bankruptcy petition against Mallya but not disclosed this in their application, nor had they disclosed Mallya’s £1.6 billion (Rs 14,000 crore) settlement offer in the Karnataka high court, which he said was effective security against the judgment debt and would pay off all his creditors. Nigel Tozzi QC, representing the banks, said the banks did not accept that the judgment debt was secured in India and when and if the offer would be approved was uncertain.

Handing down judgment on Wednesday, Master Cook (the judge) said: “I adjourn the hearing of the application for a third party debt order to after the hearing of the bankruptcy petition in December.”

He said the interim third party debt order would remain in force.

Cook said he found that “it was not material for the court to know of the bankruptcy petition at this stage” nor of the Karnataka HC offer. The judge was also not convinced Mallya was suffering hardship and said: “he has not made any application for a hardship order”.

 

He said the bankruptcy proceedings were only relevant to whether the order should be made final. “In this case the grounds for making an interim debt order were strong. There was an undisputed and unpaid judgment for a substantial sum of money.”

 

At the April 3 hearing the court had heard that Mallya owed his personal assistant £84,000 (Rs 76 lakh) and a business acquaintance £128,000 (Rs 1.15 crore). He also owes £267,000 (Rs 2.41 crore) in taxes to HMRC and his preference was to use the £259,000 to pay these creditors off. He also owes an undisclosed sum to his previous lawyers, Macfarlanes, and £175,000 (Rs 1.58 crore) in costs to the Indian banks for an earlier case. But yet he spends £1,000 (Rs 90,000) a week on groceries.

Cook said given there were supporting creditors and other people who may be affected by the bankruptcy proceedings, adding, “The proper thing to do is to adjourn.”

“I note that Dr Mallya has made no voluntary payment to date and has failed to pay the costs order against him made in August 2018 whilst continuing to incur substantial legal costs in opposing the claimants’ efforts to enforce their judgment,” the judge said. He said, “whether the judgment debt is effectively secured by the attachments made in India must be left to the hearing of the bankruptcy petition”. He said there was one supporting creditor — Investec to whom Mallya owes £3.4 million (Rs 30 crore) — and there were “likely to be other creditors.”

Mallya, meanwhile, took to Twitter to say, “Every time that I say I am willing to pay 100 per cent back to the PSU bank, media say I am spooked, terrified etc. of extradition. I am willing to pay either way whether I am in London or an Indian jail. Why don’t the banks take the money I offered first? ... I have offered to pay back 100 per cent but am being criminally charged instead.”

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