SC rejects Mallya plea against being declared wilful defaulter by UBI

The Supreme Court on Tuesday rejected Vijay Mallya's plea to strike down the decision by the United Bank of India (UBI) to declare him a wilful defaulter over his failed Kingfisher Airlines, dealing a blow to the former liquor baron who has been fending off banks trying to recover some Rs7,000 crore worth of loans.

A two-judge bench of Justices A R Dave and U U Lalit summarily dismissed Kingfisher's plea that its chairman Mallya was declared a wilful defaulter by the UBI's grievance redressal committee without giving his lawyer a hearing during the proceedings.

The bench said the objections were now of no consequence as the order declaring him a wilful defaulter had already been passed (See: United Bank becomes first to declare Kingfisher a 'wilful defaulter'). The company could, however, challenge the declaration in appropriate proceedings, the court suggested.

Mallya's lead counsel, Abhishek Manu Singhvi, tried to draw a distinction between a defaulter and a wilful defaulter.

"I have been blacklisted. I can't take any loan. There is a complete ostracism by the financial markets," Singhvi said, accusing UBI of "unnatural conduct" by a public entity. "Do banks function like this? They are painting him (Mallya) black," he said.

However, attorney-general Mukul Rohatgi, appearing for UBI, contested these arguments. "Where is the vested right to a lawyer? He chose not to appear before the committee," he said, and accused the company of diverting public funds, as well as not paying salaries and taxes.

After hearing both sides, the court dismissed Kingfisher's objections as "infructuous", noting the order declaring Mallya a wilful defaulter had already been passed.

Mallya or Kingfisher will now need to move a high court against the UBI action.