Why claiming for more even after recovering ₹14,131 crore against ₹6,203-crore Kingfisher Airlines debt, Karnataka HC questions consortium of banks

The High Court of Karnataka has raised questions about the ongoing claims by a consortium of banks against Vijay Mallya, the former head of Kingfisher Airlines, following their recovery of assets worth ₹14,131.6 crore from him. The case concerns the loan of ₹6,203 crore that Kingfisher Airlines had taken from the banks, which has been almost fully recovered.

The court noted that Finance Minister Nirmala Sitharaman had informed the Lok Sabha that the assets and UBL shares had been returned to the consortium of banks. After the Division Bench comprising Justice D.K. Singh and Justice T.M. Nadaf allowed two petitions filed by Diageo Holdings Netherlands B.V., they questioned the banks' continued pursuit of 2.09 crore shares of United Breweries Ltd. (UBL) held by Mallya and his son.

The court observed that Vijay Mallya's lavish lifestyle and personal indulgence seemed to interfere with resolving the banks' claims against the loan amount. While allowing the petitions, the court also affirmed that the pledge of the UBL shares in favor of Standard Chartered Bank (SCB), UK, which had been acquired by Diageo, held a higher priority over the banks' claims. The court dismissed the DRAT's claim that Diageo was part of the Mallya group, stating that this was contrary to the records.