Vijay Mallya. Photo: AP
London: Businessman Vijay Mallya suffered another legal setback on Wednesday as the London High Court dismissed his appeal against a bankruptcy order issued in July 2021. The case revolves around a staggering £1.28 billion debt owed by Mallya to a consortium of Indian banks, including the State Bank of India.
The case dates back to 2017 when the banks registered the DRT's judgment in the English courts, which pertained to a personal guarantee Mallya had provided in relation to loans made to Kingfisher Airlines. The banks then served Mallya with a bankruptcy petition in September 2018, which he opposed on multiple grounds.
In April 2020, London's Insolvency & Companies Court (ICC) ruled that the banks held security over Mallya's assets, rendering the bankruptcy petition partially defective under Section 269 of the Insolvency Act 1986. The banks appealed this finding, and in March 2021 Justice Snowden permitted them to bring the security appeal, which was heard this year and has now been concluded.
In the interim, the banks amended the bankruptcy petition, agreeing they would relinquish any security held if Mallya was declared bankrupt. Mallya had opposed this amendment, arguing it was contrary to Indian law and public policy. However, in April 2021, the ICC ruled that the amendment was not contrary to Indian law or public policy.
Mallya is also pursuing a separate annulment application in the UK courts, which is expected to be taken up for a directions hearing in October.
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