Vijay Mallya and two of his companies — the Kingfisher Airlines Ltd. (KFA) and UB (Holdings) Ltd. — cannot alienate or transfer their movable or immovable properties until the Debt Recovery Tribunal (DRT) disposes of the applications filed by the bankers, seeking to recover payments due to them from KFA and its guarantors. The Karnataka High Court has passed the order while confirming an interim order passed by it two months ago, temporarily restraining them from dispossessing their properties. Justice A. S. Bopanna passed the order on the petitions filed by a consortium of 15 banks, questioning the delay on the part of the DRT to take up for hearing their interlocutory applications to protect their interest pending the process to recover dues from KAL and its guarantors.
Now, the High Court has disposed of the bankers’ plea, pointing out that since in any event their applications would have to be considered and disposed of one way or the other in accordance with law by the DRT, certainly if no ad-interim protection is granted to the petitioners [bankers], their right would be defeated.
Hence, the court said, the interim order — restraining KFA, UBHL, Kingfisher Finvest (India), and Mr. Mallya from transferring, alienating or creating third party rights in respect of movable as well as immovable properties belonging to them — is confirmed till the bankers’ applications are disposed by the DRT. “The DRT may fix its own timeframe for disposal of the applications, which shall be in an expeditious manner,” the court observed.
The consortium of banks had moved the DRT for recovering around Rs.6,500 crore due to them from the KFA.
The petition filed by the consortium for winding up of KFA and UBHL is pending before the High Court.