Loan default case: CBI court issues NBW against Vijay Mallya

Vijay Mallya. File pic

A special court in Mumbai has issued a non-bailable warrant (NBW) against fugitive businessman Vijay Mallya in a Rs 180-crore loan default case linked to Indian Overseas Bank (IOB).

The NBW was issued against Mallya on June 29 by special CBI court judge SP Naik Nimbalkar and a detailed order was made available on Monday.

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Citing other non-bailable warrants issued against the 68-year-old businessman after taking into account CBI submission, and his status as a "fugitive", the court noted, "this is a fit case to issue an open-ended NBW against him to secure his presence".

The CBI, probing the case, has claimed the promoter of the now defunct Kingfisher Airlines caused a wrongful loss of more than Rs 180 crore to the government-run bank by "wilfully" defaulting in payments.

The embattled liquor tycoon, who has already been declared a fugitive economic offender in a money laundering case probed by the Enforcement Directorate(ED), currently resides in London and the Indian government is seeking his extradition.

The warrant was related to a cheating case registered by the CBI for alleged diversion of loans availed by the then-operational Kingfisher Airlines from IOB between 2007 and 2012.

As per a chargesheet filed in the case in the court recently by the central agency, these credit facilities were issued to the grounded private carrier by the bank under an agreement.

The Reserve Bank of India (RBI) had in August 2010 directed the complainant bank (in the case) State Bank of India (SBI) to consider the proposal of Kingfisher Airlines Ltd (KAL) for restructuring of existing facilities by relaxing the concerned guidelines as a one-time measure for the aviation sector, the probe agency said in the document.

Accordingly, the lenders, including IOB, restructured the existing credit facilities to KAL through a Master Debt Recast Agreement (MDRA). The agreement was signed between the KAL and a consortium of 18 banks.

The allegations in the case pertain to false promises, diversion of loans for the purposes other than it was availed, the CBI said.

The accused dishonestly and with intent to cheat, "wilfully" defaulted on the repayment obligations under the aforesaid loans and caused a wrongful loss of Rs 141.91 crore on the account of default on loans, the chargesheet claimed.

The probe agency further alleged that an additional wrongful loss of Rs 38.30 crores was caused on the account conversion of loans to shares.

Taking cognizance of the charge-sheet, the CBI court issued process (summons) against Mallya and five other accused in the case.

However, the probe agency pressed for issuance of an NBW against Mallya, saying "the accused is a fugitive and an absconder".

Citing multiple cases where NBWs and summonses have been issued against the embattled businessman, the CBI's plea said he is presently living in England and "continues to subvert the process of law in India."

Considering the CBI submission, the court said Mallya has absconded, declared a fugitive and NBWs are pending for execution against him in other cases. So no purpose will be served by issuing process (summons) to him.

"This is a fit case to issue an open-ended NBW against accused Mallya for securing his presence," it observed.

The former Rajya Sabha MP was declared a Fugitive Economic Offender in January 2019 by a special court for cases under the Prevention of Money Laundering Act (PMLA).

Mallya, accused of defaulting on multiple loan repayments and money laundering, left India in March 2016.

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