Banks Allowed To Utilise Vijay Mallya's Movable Assets To Clear Debt

A special Mumbai Court has permitted a consortium of 15 banks led by the State Bank of India (SBI) to utilise seized assets of former liquor baron Vijay Mallya towards repayment of his debt. Court also said the ruling has been stayed till January 18, until which all parties affected by the order can appeal to the Bombay High Court.

The assets, comprising financial securities like shares of the United Breweries Holdings Ltd (UBHL), were attached by the special Prevention of Money Laundering Act (PMLA) court in 2016 when it declared Mallya a proclaimed offender.

ED Sources:Prevention of Money Laundering Act Court in Mumbai allowed banks that lent money to Vijay Mallya to utilize seized assets. Court also said ruling has been stayed till January 18,until which all parties affected by the order can appeal to the Bombay High Court(file pic) pic.twitter.com/oMSrtR8K56

— ANI (@ANI) January 1, 2020

Under provisions of the Criminal Procedure Code, a court orders attachment of a person's movable assets after he or she has been declared a proclaimed offender.

A person against whom a warrant has been issued can be declared a proclaimed offender if the court believes that he or she has absconded or is evading execution of warrant.

The consortium of banks earlier filed an application before the special court, seeking release of Mallya's movable assets to utilise them for repayment of loans given to him.

Senior counsel Rajeev Patil, appearing for the consortium, said the special court on Tuesday lifted the attachment on the movable assets.

Senior counsel Amit Desai, appearing for Mallya, said the court has ordered lifting of attachment of assets, which are UBHL shares.

"However, we do not know if the court has ordered for the assets to be restored to SBI or the consortium. We are waiting for the order copy for further clarity," Desai said.

Mallya, who is accused of money laundering by the Enforcement Directorate, fled India in March 2016 and is now based in London. The lenders in their application said they want to liquidate assets to claim over Rs 6,000 crore.