Winning Bizness Desk

Mumbai.Bombay High Court urges Vijay Mallya, banks to end decade-long dispute

The Bombay High Court has urged fugitive businessman Vijay Mallya and a consortium of banks led by State Bank of India (SBI) to bring their long-running commercial dispute to an end, warning that keeping the matter unresolved could have a direct and adverse impact on the country’s economy. The court also sought details from the Enforcement Directorate (ED) on the current status of its investigation and the properties attached in the case.

Justice Milind Jadhav, hearing Mallya’s petition, said a dispute that has continued for nearly a decade should now be taken to its logical conclusion. The court observed that commercial disputes often contain the solution within themselves and urged both sides to move away from prolonged complications and look for a practical settlement.

Court seeks details on attached assets

The proceedings relate to Mallya’s challenge to orders concerning properties attached by the ED. In 2020, Mallya challenged an order of the special Prevention of Money Laundering Act (PMLA) court that allowed a consortium of banks led by SBI to use properties attached by the agency.

Mallya is accused of defaulting on loans of around ₹9,000 crore taken from several banks for the now-defunct Kingfisher Airlines (KFA).

The case involves several key developments:

• Mallya left India for the UK in March 2016.
• He was declared a fugitive economic offender in 2019.
• Authorities were given powers to seize his assets under the Fugitive Economic Offenders Act (FEOA).
• The Indian government has been seeking his extradition from the UK.

Court earlier refused relief before return

The latest observations come after earlier proceedings involving Mallya’s challenge to his declaration as a fugitive economic offender. In February, a bench headed by Chief Justice Shri Chandrashekhar and Justice Gautam Ankhad heard two petitions filed by him under the FEOA.

During the February 12 hearing, the court made it clear that it would not consider Mallya’s petitions until he returned to India and surrendered to the jurisdiction of the court. The position underlined the difficulties Mallya faces in obtaining relief while remaining outside the country.

At the next hearing on February 18, Mallya said restrictions imposed by English courts meant he was currently unable to say when he would be able to return to India.

Mallya cites Supreme Court rulings

Senior advocate Amit Desai, appearing for Mallya, relied on Supreme Court judgments to argue that constitutional courts can decide writ petitions even in the absence of the petitioner.

He therefore urged the court to hear and decide the two petitions separately, rather than keeping them pending solely because Mallya is not physically present in India.

The broader dispute, however, remains linked to recovery of the money owed to the banks and the status of properties attached by investigative agencies.

What the Fugitive Economic Offenders Act means

The FEOA was introduced to deal with economic offenders who leave India to avoid arrest and criminal proceedings. The law gives authorities stronger powers to proceed against their assets, including properties located in India and abroad.

Under the law, courts can:

• Attach properties even before the completion of proceedings.
• Take steps to seize assets belonging to a fugitive economic offender.
• Allow such assets to be sold or auctioned.
• Use the proceeds to help recover money owed to banks and other creditors.

The Bombay High Court’s latest observations therefore seek to push a dispute that has remained unresolved for almost a decade towards a practical and final outcome, while the ED has been asked to provide an updated account of its investigation and the attached properties.