The Supreme Court on Monday dismissed a plea filed by United Breweries Holdings Limited (UBHL) of liquor baron Vijay Mallya against an order of the Karnataka High Court upholding the winding up of the firm for recovery of dues payable by Kingfisher Airlines Ltd. A bench comprising justices UU Lalit, Vineet Saran and S Ravindra Bhat refused to entertain the plea of the UBHL against the March 6 order of the high court.
The division bench of the high court had upheld the winding up order passed by a single judge on February 7, 2017. Senior Advocate Mukul Rohatgi, appearing for the consortium of banks led by the SBI, submitted that so far around Rs 3,600 crore have been recovered but Rs 11,000 crore was still to be recovered from Mallya and the UBHL.
The senior lawyer said that the Enforcement Directorate (ED) should not have attached the properties of the company as these were encumbered assets and thus banks had the first claim over the assets. Senior Advocate CS Vaidyanathan, appearing for United Breweries, had submitted before the top court that since the company's assets exceeded the total debt, it was not the case wherein the company should be directed to wind up.
Vaidyanathan insisted that the ED had attached many assets of the company, as a result of which none was available to the banks. Earlier, the top court had said that it would examine whether assets of a company which have been attached by the authorities following legal proceedings can be considered for liquidation to settle financial liabilities.
The court had observed this after Vaidyanathan had submitted that the company's assets in totality are far greater than its liabilities. On March 6, the high court had rejected the offer of Mallya for settlement of debts of now defunct Kingfisher Airlines terming it as not bona fide and made in good faith and dismissed the appeal of UBHL against the order of winding up of the company.
UBHL had claimed that the market value of the company's assets is more than the debts. The high court said that many of the assets proposed by the UBHL in the offer of settlement were attached either by the ED under PMLA or by the Debt Recovery Tribunal and it cannot prohibit the statutory authorities from discharging their functions and order sale of assets.
UBHL owes over Rs 6,000 crore and compound interest to SBI-led consortium of banks and the lenders have moved the courts and debt recovery tribunal with winding up petitions to recover their dues. The lenders to Kingfisher Airlines had filed the case against UBHL seeking dues from the now defunct airline.
UBHL had given corporate guarantees for loans to run Kingfisher, which has virtually caused the collapse of Mallya's liquor empire. Mallya owns 52.34 per cent in United Breweries Holdings Limited. Earlier, the Debt Recovery Tribunal here had ordered the SBI-led consortium of banks to start the process of recovering over Rs 6,203 crore, at 11.5 per cent annual interest rate, from the embattled tycoon and his companies in another Kingfisher Airlines case.
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