Absconding business tycoon Vijay Mallya has been legally declared a ‘Fugitive Economic Offender’ in the Rs 9,000 crore loan default case by a special court in Mumbai on Saturday.
On the other hand, banks now seem to be keen to consider Mallya’s offer of repayment provided they remain the primary beneficiaries.
With this judgement against Mallya, the government is authorised to confiscate his properties, the order on which will be decided on February 5. This is the second legal setback for Mallya after the Westminster Magistrates Court in London passed an order allowing his extradition to India.
The order was passed by M S Azmi, Special Prevention of Money Laundering (PMLA) judge under section 12 of the act, which makes Mallya the first businessman to be declared under the new anti-fugitive law. Mallya has the right to challenge the order within 30 days under Section 17 of the FEO act.
The ED alleged that Mallya had taken 3,000 bags when he left India, as he had the intention of fleeing the country. His counsel Amit Desai filed an affidavit countering the charge. He claims that Mallya had gone with him for a meeting with only five pieces of luggage and his attempts to pay money were thwarted.
ED counsel D P Singh has alleged that Mallya did not present any evidence for his claim of going to Geneva for a World Motor Sport Council meeting on March 4, 2016. Mallya has submitted another affidavit that includes the minutes of the meeting in Geneva, and also that the date was decided in a previous meeting in December 2015.
A fugitive economic offender is a person against whom an arrest warrant has been issued for involvement in economic offences involving at least Rs 100 crore or more and he or she has left India to avoid prosecution. A similar outcome is being sought by the ED in the US$ 2 billion Punjab National Bank fraud case against Nirav Modi and his uncle Mehul Chowksi.
Mallya had sought a stay on the hearing of this plea but it was rejected in both the special PMLA court and the Bombay High Court. He has also contested the extradition order.
Meanwhile, banks seem to be finally considering the offer of Mallya to settle dues, a prospect that they had refused earlier. A consortium of banks led by the largest lender SBI has filed a memo in the Karnataka High Court to consider the repayment offer. The memo states that if the banks consider the repayment offer, their dues should get the first priority. While Mallya wants the sale of assets to be done under a court monitored committee, banks want the Debt Recovery Tribunal to take over.