The Supreme Court on Tuesday agreed to urgently hear a plea by a consortium of banks, led by SBI, for a restraint order to prevent liquor baron Vijay Mallya, who owes them over Rs. 9,000 crore, from leaving the country.
A Bench, led by Chief Justice of India T.S. Thakur, ordered that the case be listed for hearing on March 9 after Attorney-General Mukul Rohatgi sought an urgent audience. The action followed a Karnataka HC decision refusing to grant them an ex parte interim order against Mr. Mallya, the U.K.-based Diageo Plc and United Spirits Limited.
The banks told the Supreme Court that the threat to their financial interests were so immediate and grave that the High Court should have passed the interim order without first hearing the embattled industrialist and others, including the debtor firm Kingfisher Airlines Limited.
“The High Court of Karnataka, at Bengaluru, by its impugned order has failed to protect the interests of the petitioner banks who are yet to recover an amount in excess of Rs. 9,000 crore from the respondents,” the banks said.
The banks want the Supreme Court to pass an interim order to freeze Mr. Mallya’s passport or direct him not to leave the jurisdiction of this country without the court’s permission.
Before moving the High Court, the banks had filed four pleas in the Debt Recovery Tribunal (DRT) in Bengaluru, seeking freezing of Mr. Mallya’s passport, an arrest warrant against him and issuance of a “garnishee order against Respondent Nos. 10 [Diageo Plc] and 11 (United Spirits Limited) from disbursing $75 million.” They had also sought a directive that Mr. Mallya disclose his assets on oath.
The DRT had heard arguments on only one plea and did not consider the other pleas related to freezing of the passport and restraining Mr. Mallya from leaving country, the banks said in their appeal.
The banks had moved the DRT in the backdrop of Mr. Mallya’s recent resignation from the chairmanship of United Spirits. Diageo Plc, the current owner of the liquor company, has agreed to pay Mr. Mallya $75 million (roughly Rs. 515 crore) as severance package.