The Supreme Court on Tuesday held businessman Vijay Mallya guilty of contempt of court for transferring $40 million to his children in violation of the court's order.
The apex court directed Mallya, who is at present in the United Kingdom, to appear before it on July 10 to argue on the quantum of punishment in the matter. India had recently asked Britain to ensure early extradition of Mallya, who is an accused in a bank loan default case of over ₹9,000 crore involving his defunct Kingfisher Airlines.
"We have found respondent number 3 (Mallya) guilty of contempt of court on two grounds," a bench comprising Justices AK Goel and UU Lalit said.
The order came on a plea by consortium of banks led by the State Bank of India (SBI), which had said that Mallya had allegedly transferred $40 million received from British firm Diageo, to his children in "flagrant violation" of various judicial orders.
The apex court had on March 9 asked the liquor baron about the "truthfulness" of his disclosure of assets and the transfer of money to his children.
The bench had reserved its order on two pleas of lending banks seeking contempt action and a direction to Mallya to deposit $40 million received from offshore firm Diageo respectively.
The banks have alleged that Mallya concealed the facts and diverted the money to his son Siddharth Mallya and daughters Leanna Mallya and Tanya Mallya in "flagrant violation" of the orders passed by the Karnataka High Court.
The bench had also posed several queries to consortium of banks and asked it whether any criminal proceedings have been initiated against Mallya.
However, it is unlikely that Mallya would attend the hearing on July 10. Mallya had been briefly arrested on April 18, which he had rubbished off tweeting as “usual Indian media hype”. On Tuesday, however, he hadn’t commented on the Supreme Court verdict till this story was published.
India had given a formal extradition request for Mallya as per the Extradition Treaty between India and the UK through a note verbale on February 8.
The extradition process from the UK, however, involves a number of steps including a decision by the judge whether to issue a warrant of arrest. In case of a warrant, the person is arrested and brought before the court for preliminary hearing, followed by an extradition hearing before a final decision is taken by the secretary of state. That is, this is likely to be a long, tedious process.
The court had asked Mallya as to why he did not disclose the receipt of $40 million from London-based company Diageo Plc and subsequent transfer of money to trusts to which his three children were the beneficiaries.
Attorney General Mukul Rohatgi and senior advocate Shyam Divan, appearing for the banks, had contended that unless Mallya deposited $40 million before this court, he didn’t deserve to be heard and, moreover, he needed to appear personally as the contempt notice had already been issued.
Divan had referred to various orders passed by the Debt Recovery Tribunal (DRT), the High Court and the Supreme Court and, said that the DRT had passed a decree in favour of the banks and the amount to be recovered is approximately ₹9,200 crore.
With NH Web Desk inputs