LONDON: Indebted liquor tycoon Vijay Mallya stepped up his combat in opposition to chapter within the UK courts on Friday, claiming that the banks’ amended chapter petition in opposition to him didn’t arise in regulation because the banks couldn’t forfeit the safety they held over his belongings in India as a result of it was in opposition to the general public curiosity in India to do so because the money he had borrowed was “public money”.
A consortium of Indian banks, led by State Bank of India, is searching for to make the Indian businessman bankrupt in Britain to be able to appoint a chapter trustee with broad-ranging powers to research his worldwide belongings and claw again the Rs 11,000 crore he owes them by advantage of a private assure he gave for loans for Kingfisher Airlines earlier than it went out of enterprise.
The banks had been ordered on April 9, 2020 to submit an amended chapter petition agreeing to waive any safety they maintain over his belongings in India within the occasion a chapter order is made, to be able to adhere to UK insolvency legal guidelines. The banks are within the course of of interesting that order.
But Philip Marshall QC, representing Mallya, advised the Insolvency and Companies Court on Friday that underneath Indian regulation the banks wouldn’t be allowed to surrender their safety over Mallya’s Indian property, within the occasion a chapter order is made within the UK, because the money he owes was public money lent by nationalised banks. His argument was that any chapter order made because of this of the amended petition would be thus “made on a false premise”.
He pointed to varied judgments in India referring to Mallya, together with the DRT and PLMA judgments, which discovered that the banks held safety over Mallya’s belongings above different secured collectors together with Diageo, in addition to above the Enforcement Directorate, owing to the very fact they lent public money. “It is not open to the Indian banks to say before this court there is no public interest in them holding security when they have adopted the opposite position in Indian proceedings,” Marshall stated.
Marshall added that a lot of the Rs 11,000 crore was “interest to the principle debt” and Mallya was difficult that curiosity within the Indian courts. “If we look at that and consider the realisation of his assets to meet the petition debt as well as assets of joint debtors then you don’t end up with an amount sufficient to maintain the bankruptcy petition and so the question of security is very significant,” he stated.
He additionally identified that in India there is no recognition of cross-border insolvency. “There is no legislation to enable recognition of an English bankruptcy trustee in India so how can a trustee work effectively to get at the security located in India if it cannot be released?”
Marcia Shekerdemian QC , representing the banks, stated: “There is no general rule of public policy in India that prevents a bank from giving up security and that is nowhere in the Indian statutes. How can a bank not deal with its security as it wishes?”
Chief ICC Judge Briggs reserved judgment.
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