‘Blindingly obvious’ that banks broke rules for Kingfisher loans: UK judge

Presiding over a hearing at Westminster Magistrates' Court in London, Judge Emma Arbuthnot described the case as a "jigsaw puzzle" with different pieces of "massive evidence" to be put together, but said she was now able to see the picture "more clearly" than a few months ago.

The judge said she would seek further clarification from India on certain documents, but described as “blindingly obvious” the prosecution’s contention about the banks not following their own rules when it came to lending decisions relating to Mallya.

"There are clear signs that the banks seem to have gone against their own guidelines [in sanctioning some of the loans]," she said, "inviting" the Indian authorities to explain the case against some of the bank officials involved because that relates to the "conspiracy" point against Mallya.

The hearing continued to focus on the admissibility of evidence, following a hearing in January, with the defence barrister Clare Montgomery attacking the structure of the prosecution’s case, which she said rested on police statements that didn’t have underlying material, documents with “no evidence of provenance” whose relevance one had to judge by inference from 161 witness statements, which rested on “expo facto” analysis that wouldn’t meet criteria of admissibility in a UK court.

The 62-year-old businessman, whose extradition India is seeking to face charges of fraud and money laundering worth around Rs9,000 crore, watched the proceedings from the dock.

The Crown Prosecution Service (CPS), arguing on behalf of the Indian government, laid out their arguments on the admissibility of some of evidence submitted by the Indian authorities.

Pointing out that Mallya had "chosen not to give evidence" in the case, CPS counsel Mark Summers rejected the defence claims on the evidence as "nonsense".

"The government of India has established by other copious evidence a prima facie case of fraud," he said.

The judge is expected to rule on the admissibility of evidence and set a timeframe for her final verdict. However, the matter could be delayed over further clarifications required on the source of some of the emails submitted as evidence by the Indian authorities.

Mallya's counsel Montgomery argued that evidence that was claimed as a "blueprint of dishonesty" by the CPS was in fact privileged conversation between Mallya and his lawyer about "legal advice in clear contemplation of litigation" and hence should be inadmissible.

On a separate category of evidence presented by the Indian government, Mallya's team questioned the reliability of investigating officers in the case and pointed to over 150 pages of "near identical material" purporting to be statement of witnesses taken under Section 161 of the Indian Criminal Procedure Code.

"They do not appear to be in any way an account of things that witnesses would have said but rather seem to be somebody else's analysis put into the mouths of the witnesses, down to the spelling mistakes," Montgomery said, adding that the documents were "identically reproduced" with not only the same words but also the same typing errors.

The judge did not seem to be convinced by this argument and said she had found only two or three cases of mistakes but did not see a "problem" in the preparation of the statements.

Judge Arbuthnot had also sought further clarifications related to availability of natural light and medical assistance at Barrack 12 of Mumbai Central Prison on Arthur Road, where Mallya would be held if he is extradited from Britain.

The CPS indicated to the judge that the government had provided all the necessary clarifications along with photographs of the two cells that comprise Barrack 12.

The extradition trial, which opened at the London court on 4 December, is aimed at laying out a prima facie case of fraud against the tycoon, who has been in the UK since he left India in March 2016. It also seeks to prove that there are no "bars to extradition" and that Mallya is assured a fair trial in India over his now-defunct Kingfisher Airlines' default on loans from a consortium of Indian banks.

Mallya's defence team has deposed a series of expert witnesses to claim he had no "fraudulent" intentions and that he is unlikely to get a fair trial in India.

Mallya was arrested by Scotland Yard on an extradition warrant in April 2017 and has been out on bail on a bond worth £650,000. Chief magistrate Arbuthnot is expected to pronounce her verdict in the case by May this year.

If she rules in favour of the Indian government, the UK home secretary will have two months to sign Mallya's extradition order. However, both sides will have the chance to appeal in higher courts in the UK against the chief magistrate's verdict.