Why Vijay Mallya was declared wilful defaulter and proclaimed offender

Mumbai: The Supreme Court on Tuesday started contempt of court proceedings against embattled businessman Vijay Mallya who has been accused of turning into a defaulter of Rs 9,000 crore loans including interest payments.

This is the first time that some provisions of Contempt Of Court proceedings are being slapped on liquor baron who is facing an extradition from the UK where he is fighting a legal battle against it.

The apex court has asked him to appear before the bench on July 10 to pronounce in his present the quantum of punishment. The SC ruling comes in reply to a petition filed by a group of banks led by State Bank of India.

The group of banks had told the top court that Mallya in violation of different court rulings transferred $40 million to his children. Mallya had got $75 million from British company Diageo in form of a severance package for quitting chair of United Spirits. Part of which he transferred to accounts in his children's name.

Wilful Defaulter

Vijay Mallya had taken loans to start now defunct Kingfisher Airlines that ran into trouble after a few years of operations. A group of 17 banks led by SBI claim that Mallya failed to return the loan amount and the interest despite several attempts made by lenders.

Banks claim Mallya owes to them some Rs 9,000 crore money that includes interest payment as well. These lenders started talks through various means and channels and the banks failed to elicit wanted results through talks.

After these failed attempts Mallya was declared by banks as a wilful defaulter. banks declare a customer a wilful defaulter who has the capacity of repayment of loans but despite that withholds payments.

Proclaimed Offender

Apart from a court inquiry, Mallya has been probed by India's anti-money laundering agency Enforcement Directorate that works under the stewardship of department of revenue of Finance Ministry.

As ED was probing Mallya under Prevention of Money Laundering Act, it issued several warrants against him. Mallya who has been living in a self-imposed exile in the UK did not turn up in PMLA court on several occasion, hence flouted court warrants. As a consequence Mallya was declared a proclaimed offender by a special PMLA court in Mumbai.