Adjust Rs 2,000 crore in high court against Mallya's loan to banks: DRT

The Debt Recovery Tribunal (DRT) in Bengaluru advised the State Bank of India (SBI) to explore adjusting Rs 2,000 crore deposited by Vijay Mallya in the Karnataka High Court against unpaid loans by the liquor baron and his companies taken to run the defunct Kingfisher Airlines.

The DRT Presiding Officer C R Benakanahalli made an oral comment that the counsels of SBI, who is representing a consortium of banks, that the adjustment of dues would bring down the liabilities for the banks and also reduce interest. The Tribunal was hearing the arguments of case against Mallya, first filed in 2013, to recover over Rs 7,200 crore dues owed by Mallya and his companies."

Mallya in his application had said that the banks have already received Rs 1,244 crore in pledged shares since April 2013. An additional Rs 1,250 crore has been deposited in Karnataka high court belonging to United Breweries (Holdings) Ltd.

The Tribunal also directed the counsels to stop filing addition interlocutory applications saying that it would make it difficult to comply with the directive of the Supreme Court, which has mandated the case to be completed before July 9.

The Tribunal has set the next day of hearing to June 13.

Mallya, in self-exile in the United Kingdom, owes over Rs 7,200 crore to a consortium of bankers led by SBI for loans taken to run the Kingfisher Airlines. The banks say that Mallya had given personal guarantees apart from pledging his stake in the UB group companies to raise funds for the airline which grounded due to heavy losses.

This resulted in Mallya losing control over his liquor empire to global players - Diageo in spirits and Heineken in beverages. Mallya claims that his UB group has pumped over Rs 4,000 crores in Kingfisher Airlines in addition to the loans taken from banks.

Banks first filed a case in 2013 against Mallya in the DRT in Bengaluru, where the UB group is based, to recover loans. Since then, they have filed an additional 25 applications, 200 including a petition to direct Diageo Plc and United Spirits to stop payment of $ 75 million for a non compete agreement signed with Mallya. Diageo has paid Mallya $ 40 million immediately after the agreement was signed in February.

The Supreme Court has directed Mallya to disclose his and his family assets in India and overseas, while asking the DRT to complete the proceedings before July 9. Mallya says he is keen to settle dues with the banks and also has come up with an offer of settlement, which the banks have yet to decide.