First come to India, then we'll hear your plea, Bombay HC tells vijay Mallya
MUMBAI, Dec. 5 -- The Bombay High Court on Thursday told the lawyer appearing for liquor baron Vijay Mallya that it would hear his petition questioning the validity of the Fugitive Economic Offences (FEO) Act, 2018, and seeking various reliefs in relation to the FEO proceedings against him, only after he returns to the country.
"Tell your client to appear in court first, and then we will hear the matter. Take instructions on when he will come," the division bench of Chief Justice Shree Chandrashekhar and Justice Gautam Ankhad told senior advocate Amit Desai, who appeared for the absconding liquor baron, and posted his petition and connected pleas for further hearing on December 23.
Mallya, accused of defrauding nationalised banks to the tune of crores of rupees, fled the country in March 2016, around a year after the CBI registered the first criminal case against him in connection with loans taken by Kingfisher Airlines Ltd, from a consortium of banks led by IDBI Bank.
The Banking Securities & Fraud Cell of the Central Bureau of Investigation (CBI-BS&FC) had registered a First Information Report (FIR) in July 2015, charging him with criminal conspiracy, criminal breach of trust and criminal misconduct relating to Rs.900 crore in loans disbursed by IDBI Bank to Mallya's airline, where he is named as one of the accused. Based on another complaint, by the consortium of banks under the leadership of the State Bank of India, another FIR was registered in August 2016.
During the investigation, it was revealed that Mallya, as chairperson of Kingfisher Airlines, had allegedly committed gross irregularities in securing loans from banks, and diversion and laundering of funds.
He was also alleged to have siphoned off large sums of money, and parked it outside India to dodge the law here. After enactment of the FEO Act in 2018, proceedings were initiated against Mallya under the law, prompting him to file a petition before the high court. The petition seeks a declaration that the enactment was unconstitutional.
The Enforcement Directorate (ED) has filed a reply to his petition, seeking a declaration that all orders, including those for the confiscation of his properties, under provisions of the FEO Act, be made subject to the outcome of the pending petition.
In its reply filed through additional solicitors-general, SV Raju and Anil Singh, the ED said Mallya cannot seek protection while continuing to evade summons to come to India. It added that Mallya had allegedly formed a complex web structure of his group companies to indirectly control and alienate the assets to repay the loans. However, when he failed to do so, he filed a suit in the Bombay High Court in 2013, stating that the guarantees were executed under duress, coercion and therefore, should be declared as invalid and unenforceable.
The estimated proceeds of crime generated in the 2016 complaint were to the tune of Rs.1,301 crore, and that of property involved in money laundering was found to be of Rs.9,990 crore, including the share of IDBI Bank. The debt recovery tribunal in January 2017 charged Kingfisher Airlines Rs. 6,203 crore, with interest of 11.50% per annum.
The ED said that Mallya had left the country in March 2016, to avoid joining the investigation. Accordingly, his passport was revoked, and a non-bailable warrant (NBW) was issued against him. Mallya was declared a proclaimed offender in November 2016.
The special court issued a fresh NBW against Mallya in July 2017, and directed him to remain present before the court on August 8, 2017, and on July 30, 2018. However, the warrants remained unexecuted as Mallya failed to return to India "to avoid facing criminal prosecution".
Rejecting Mallya's claim of "drastic measures" against him, the ED said the confiscation model has been approved the world over to follow standards of civil law being preponderance of probabilities. "Merely because an FEO has wealth and resources at his disposal abroad does not mean the legislature cannot dis-entitle such a person, who on one hand absconds and renders the criminal trials against him otiose and on the other hand pursues his civil claims through his lawyers expecting the country to remain a passive observer," the reply said.
Stating that there is nothing arbitrary or unconstitutional about the provision and that Mallya has not demonstrated any facts to support his challenge to the provision, the ED urged the court to dismiss Mallya's plea with exemplary cost and uphold the proceedings before the special court under FEOA, declaring Mallya as a Fugitive Economic Offender....
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