Loan fraud: Heated argument in DRT as SBI lawyer calls Vjay Mallya 'shameless'

Bengaluru, Jun 15: A heated argument ensued in the Debt Recovery Tribunal today after counsel for consortium of banks led by SBI called some defendants, including Vijay Mallya, "shameless" over the issue of disclosure of the balance sheets in the case.

While taking up the three Interlocutory Applications (IAs) of Kingfisher Finvest by the DRT's Presiding Officer C R Benakanahalli, counsel for bankers assailed the defendants including Mallya, United Breweries Holdings Limited and Kingfisher Airlines Limited, saying: "If you (defendants) want to prove our charges of fraud wrong, you should disclose the balance sheets. It has not been done and we have to deal with such persons- they are shameless."

Sajan Poovaiah, counsel for Kingfisher Finvest, hit back at bankers' counsel, saying the bankers have been shameful in their endeavours to give loans to Mallya even after he had defaulted.

"I object to the unparliamentary words used by bankers' counsel. If he resorts such a language I will also give it back in the same coin," Poovaiah said.

"In fact it has been the bankers who are shameless, who doled out money belonging to the people, to a person who has defaulted in repaying loans. And they did not take due diligence in recovering loans. I appeal to the tribunal to direct the bankers counsel to take back the word," he said.

In a counter submission, bankers' counsel said he used the unparliamentary words not against Kingfisher Finvest but other defendants.

Making submissions earlier, Poovaiah asked the tribunal to dismiss bankers' plea seeking 'Lifting of Corporate Veil' by arguing that the original application did not mention it.

The bankers had pleaded before the DRT for Lifting of Corporate Veil to pierce the protection against personal liability enjoyed by individuals controlling the company.

The doctrine of Lifting of Corporate Veil means disregarding the corporate personality and looking behind the persons controlling the company.

As soon as the proceedings started, counsel for State Bank of India pleaded: "After going through the list of IAs, at least two IAs needs immediate attention for it has direct bearing on the original application."

"The other IAs are procedural in nature and could be heard in short time. Also other IAs are in different high courts, Supreme Court and DRAT across India," the counsel said.

Counsel said all attempts to recover dues from Mallya are being made, but he was thwarting their attempts to take over his properties by seeking adjournments in courts, and hence the Kingfisher Finvest India's IAs could be heard at the disposal stage of the final hearing.

Also, Diageo Netherlands Holdings appealed to the presiding officer to hear their application on priority basis.

Diageo Netherlands pleaded their application relates to the pledging of shares of USL to the lenders which banks have not released.

Mallya, whose now-defunct group company Kingfisher Airlines owes over Rs 9,000 crore (Rs 90 billion) to 17 banks, had left the country on March 2 and is in the UK.

ED, on June 11, had attached assets worth Rs 1,411 crore of Mallya and one of his companies in connection with its money laundering probe in the alleged IDBI bank loan default case.