Dismissing Mallya’s appeal, judges found prima facie case 

London: Two cases against Vijay Mallya were heard this month. Mallya is residing in UK on a 1992 indefinite leave to remain certificate.

The first case on 9 April sought to make Mr Mallya bankrupt, held in the High Court of Justice Business before Chief Insolvency and Companies Court Judge Briggs, the numerous petitioners were State Bank of India, Bank of Baroda, Corporation Bank, The Federal Bank Limited, IDBI Bank Limited, Indian Overseas bank, Jammu and  Kashmir Bank Limited, Punjab and Sindh Bank, Punjab national Bank, State Bank of Mysore, UCO Bank, United Bank of India and JM Financial Reconstruction Co.Pvt.Ltd. The Banks base their petition on a foreign judgement debt of £1.05billion which includes 11.5% yearly interest.

Mallya argued: The Banks are secured creditors and there is a failure to state the security on the face of the petition and there is a reasonable prospect that the Debt Recovery Tribunal judgment would be compromised within a reasonable period of time. Mallya claims “the Government of India is under pressure to take action in respect of loans owed to state owned banks. On 6 May 2016, India’s Ministry of Finance sent a letter to the Petitioners directing them to meet with the head of the Central Bureau of Investigation and the head of the Enforcement Directorate in Mumbai. The ED is a law enforcement agency that forms part of the Department of Revenue of IMF. Whilst the CBIs role is to investigate independently from political influence, I consider that there is a lack of independence of the CBI from government ministries and departments.” It is a convoluted case of debt, loan restructuring, security, Mallya’s personal guarantee and assets, and who knew about what. The previous judgments of Shri K. Srinvasan and Justice Manmohan Singh are quoted extensively. Judge Briggs concluded “In my judgment the Banks are secured, at least in part. The petition fails to comply with section 269 of the IA 1986. A bankruptcy order should not ordinarily be made where the petition is defective as a result of such a breach. The breach is capable of cure by amendment. The hearing of the petition should be adjourned for the purpose of amendment and for time to pay the debts in full.” Judge Briggs used a discretion at his disposal to stay proceedings and subsequently by agreement adjourned until after 1 June2020.

For future reference Judge Briggs noted “I record that although an argument of abuse, in the sense that the bankruptcy proceedings are prosecuted for a collateral purpose, was raised in written submissions, Dr Mallya preferred to preserve the argument for another occasion.”

The second case of between Vijay Mallya and the Government of India (GoI)plus the National Crime Agency was heard on 20 April at the High Court of Justice before Lord Justice Irwin and Mrs Justice Elizabeth Laing DBE.
In February 2017 GoI made an extradition request for Mallya, which was certified by UK a week later, Mallya was arrested and granted bail, GoI made additional charges and the request was re-certified in September 2017, Mallya was re-arrested and bailed again. The CBI allegations are of conspiracy and “undue favour” between Mallya and banks, false representations followed by default and unlawful diversion/disbursement of the proceeds of lending. Mallya’s appeal was rejected on all counts except for Senior District Judge Arbuthnot’s (SDJ) decision to send his case to the Secretary of State for extradition as Mallya’s defence claimed “that the SDJ was wrong to find that the evidence amounted to a prima facie case.” Mallya’s defence presented a long argument nit picking and criticising the SDJ’s remarks and conclusions. The Justices exhaustively examined the arguments against SDJ’s judgments and complimented “the careful and methodical way she had marshalled and analysed the evidence.”
The Justices conclusions on misrepresentation, conspiracy and dishonest intention not to repay the loans, were that there were prima facie cases in each, the appeal against extradition was dismissed.
Quoting from my TSG report in August 2019 Mallya still has one possible course of action before the Home Secretary signs the extradition order “If the HC dismisses the appeal Mallya still has the right to apply in writing to the HC, submitting that there is a point of law of general public importance that ought to go to the UK Supreme Court to be heard.

If the HC agreed, it would be a matter for the Supreme Court to decide whether to hear the appeal. If the HC disagreed, extradition ought to take within 28 days, although that time frame may be extended.”
According to Covid-19 Protocol the extradition appeal judgment was remotely circulated to the parties’ representatives by email.