Supreme Court questions Mallya on assets, transfer of USD 40 mn to kids

Source: The Hitavada      Date: 10 Mar 2017 09:14:04


Mar 9,


LIQUOR baron Vijay Mallya, who is presently in the United Kingdom, was on Thursday posed searching questions by the Supreme Court which asked him about the “truthfulness” of his disclosure of assets and transfer of USD 40 millions to his children.
A bench of Justices Adarsh Kumar Goel and U U Lalit put for the queries during the day-long hearing after which it reserved the orders on two pleas of lending banks seeking contempt action and a direction to him
to deposit USD 40 million received from offshore firm Diageo respectively.

“You answer us whether you have disclosed your assets truthfully? Did you violate the Karnataka High Court order (restraining Mallaya from transferring and alienating assets) by transferring USD 40 million,” the bench asked senior advocate C S Vaidyanathan, representing Mallya. At the outset, the bench also posed several queries to the consortium of lending banks led by State Bank of India and asked it whether any criminal proceedings have been initiated against Mallya.
“Was any security taken at the time of giving the loan? Was the security adequate? If not, then why the loan was advanced without sufficient security.

“Is it not a case of misrepresentation with regard to security?,” the bench asked.
The court then asked Mallya as to why he did not disclose the receipt of USD 40 million from London-based company Diageo Plc and subsequent transfer of money to trusts to which his three children were the beneficiaries.

The banks have alleged that Mallya concealed the facts and diverted the money to his son Siddharth Mallya and daughters Leanna Mallya and Tanya
Mallya in “flagrant violation” of the orders passed by the Karnataka High Court.
Attorney General Mukul Rohatgi and senior advocate Shyam Divan, appearing for the banks, contended that unless Mallya deposits USD 40 million before this court, he does not deserve to be heard and, moreover, he needed to appear personally as the contempt notice has already been issued.

“He did not disclose the USD 40 million deal with Diageo to this court. He took the Supreme Court for a ride, cares two hoots for the courts,” Rohatgi said.
In response to the query as to how the orders of the court would be enforced, he said that the Government is seeking deportation of Mallya from the UK.

Divan, who initiated the arguments, referred to various orders passed by the Debt Recovery Tribunal (DRT), the High Court and the Supreme Court and said that the DRT has passed a decree in favour of the banks and the amount to be recovered is approximately Rs 9,200 crores.

At present the question is to bring USD 40 million back and a direction be issued to this
effect, he said, adding “Mallya must appear in person before this court”.
There was a specific order of the High Court that Mallya will not transfer or alienate any movable and immovable assets to any person, he said.
“What will happen to remaining amount,” the bench asked.

Instead of filing a response to the contempt notice, Mallya has filed an application seeking recall of the notice itself, Divan said, adding “there should not be any subversion of orders of this court and the high court”.
Divan also referred to the orders of the apex court and said that Mallya was asked to file an affidavit giving complete details of the assets and despite these directions, he did not disclose receipt and subsequent transfer of USD 40 million to his children.