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17 bank consortium files contempt application against Vijay Mallya

Vijay Mallya,

Bengaluru, January 6:

A contempt application was filed by a consortium of 17 banks in the Karnataka High Court today against liquor baron Vijay Mallya, his grounded airline Kingfisher Airlines and UBHL for allegedly violating an undertaking given to the Debt Recovery Tribunal (DRT) that they would not alienate unencumbered assets nor deal with them.

“We have filed a contempt application in the High Court against Kingfisher Airlines, United Breweries Holdings Limited (UBHL) and Dr Vijay Mallya for violating an undertaking given before DRT…,” N Chintan Chinappa, counsel for consortium of banks, told PTI.

As the application came up for hearing before the High Court, Chinappa submitted before Justice N K Patil that an undertaking was given before the DRT that neither would the unencumbered assets be alienated nor dealt with but Mallya went ahead and created pledges in violation.

Taking cognisance of the complaint, Justice Patil ordered notice to Mallya and two other companies in contention and posted the matter for another day.

A consortium of 17 banks, which had collectively lent over Rs 7,000 crore to the crisis-ridden airline, have initiated recovery proceedings under the available legal avenues using the underlining securities which they had.

The securities included shares in multiple group companies and real estate.

In February 2013, bankers publicly stated they had lost faith in the management’s ability to revive the company.

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