LONDON: Indebted liquor tycoon Vijay Mallya stepped up his combat in opposition to chapter within the UK courts on Friday, claiming that the banks’ amended chapter petition in opposition to him didn’t arise in legislation because the banks couldn’t forfeit the safety they held over his property in India as a result of it was in opposition to the general public curiosity in India to take action as the cash he had borrowed was “public cash”.
A consortium of Indian banks, led by State Financial institution of India, is in search of to make the Indian businessman bankrupt in Britain so as to appoint a chapter trustee with wide-ranging powers to research his worldwide property and claw again the Rs 11,000 crore he owes them by advantage of a private assure he gave for loans for Kingfisher Airways earlier than it went out of enterprise.
The banks have been ordered on April 9, 2020 to submit an amended chapter petition agreeing to waive any safety they maintain over his property in India within the occasion a chapter order is made, so as to adhere to UK insolvency legal guidelines. The banks are within the strategy of interesting that order.
However Philip Marshall QC, representing Mallya, informed the Insolvency and Firms Courtroom on Friday that beneath Indian legislation the banks wouldn’t be allowed to surrender their safety over Mallya’s Indian property, within the occasion a chapter order is made within the UK, as the cash he owes was public cash lent by nationalised banks. His argument was that any chapter order made on account of the amended petition can be thus “made on a false premise”.
He pointed to varied judgments in India regarding Mallya, together with the DRT and PLMA judgments, which discovered that the banks held safety over Mallya’s property above different secured collectors together with Diageo, in addition to above the Enforcement Directorate, owing to the very fact they lent public cash. “It’s not open to the Indian banks to say earlier than this court docket there is no such thing as a public curiosity in them holding safety once they have adopted the alternative place in Indian proceedings,” Marshall stated.
Marshall added that a lot of the Rs 11,000 crore was “curiosity to the precept debt” and Mallya was difficult that curiosity within the Indian courts. “If we take a look at that and contemplate the realisation of his property to satisfy the petition debt in addition to property of joint debtors then you definately don’t find yourself with an quantity adequate to keep up the chapter petition and so the query of safety could be very vital,” he stated.
He additionally identified that in India there is no such thing as a recognition of cross-border insolvency. “There isn’t a laws to allow recognition of an English chapter trustee in India so how can a trustee work successfully to get on the safety situated in India if it can’t be launched?”
Marcia Shekerdemian QC , representing the banks, stated: “There isn’t a normal rule of public coverage in India that forestalls a financial institution from giving up safety and that’s nowhere within the Indian statutes. How can a financial institution not take care of its safety because it needs?”
Chief ICC Decide Briggs reserved judgment.