Vijay Mallya Moves Karnataka High Court, Seeks Loan Recovery Accounts from Banks

Fugitive businessman Vijay Mallya has filed a petition in the Karnataka High Court, seeking loan recovery accounts from banks. Mallya, who is currently living in London and facing extradition efforts by the Indian government, claims that banks have already recovered more than twice the loan amount he owed. His legal counsel argues that despite this, the recovery process is still ongoing, and he is still being labeled as an economic offender.

Senior advocate Sajan Poovayya appeared on behalf of Mallya, presenting his case before the High Court bench led by Justice R Devadas. The court has issued notices to the banks and loan recovery officers, seeking their response on the matter.

Mallya’s Legal Arguments: Claims of Over-Recovery

According to Mallya’s counsel, the total loan amount due was ₹6,200 crore, but the banks, along with the Enforcement Directorate (ED), have recovered ₹14,000 crore. The petition argues that:

The Finance Minister had informed the Lok Sabha about this over-recovery.
The Loan Recovery Officer previously stated that ₹10,200 crore had been recovered, yet banks continue their recovery efforts.
A request has been made for banks to submit statements of recovered loan amounts to ensure transparency.

Based on these arguments, Mallya contends that he is being unjustly pursued, despite his debts being cleared multiple times over.

Finance Minister’s Statement on Loan Recovery

During a Lok Sabha session on December 18, 2024, Finance Minister Nirmala Sitharaman provided details on major financial recoveries by the ED. She stated that:

The ED successfully restored properties worth ₹22,280 crore in cases involving major economic offenders.
₹14,131.6 crore linked to Vijay Mallya was returned to public sector banks.

Despite this official acknowledgment of significant recoveries, Mallya argues that he is still being unfairly labeled as a fugitive economic offender and has not been granted any relief.

Why Did Vijay Mallya Escape from India?

Vijay Mallya, once a successful businessman and owner of Kingfisher Airlines (KFA), left India in March 2016 after defaulting on multiple loans taken from Indian banks. His downfall stemmed from financial mismanagement, corporate debt, and allegations of money laundering and fraud.

Key Reasons Behind His Exit:

1️⃣ Kingfisher Airlines' Collapse

Kingfisher Airlines, launched in 2005, faced massive financial losses due to mismanagement, high operational costs, and regulatory issues.
By 2012, the airline shut down, leaving thousands of employees unpaid.

2️⃣ Unpaid Bank Loans

Mallya had taken loans from multiple Indian banks totaling ₹9,000 crore, primarily for Kingfisher Airlines.
The State Bank of India (SBI) led a consortium of lenders seeking loan recovery.

3️⃣ Allegations of Money Laundering & Fraud

The Enforcement Directorate (ED) and Central Bureau of Investigation (CBI) accused Mallya of misusing loan funds for personal luxury rather than for the airline.
He was charged under the Prevention of Money Laundering Act (PMLA).

4️⃣ Declared a Fugitive Economic Offender

In 2018, he became the first person to be declared a “Fugitive Economic Offender” under India’s new Fugitive Economic Offenders Act.
This allowed the government to confiscate his assets to recover public money.

Mallya’s Stand: Fighting for Relief in Court

Mallya has consistently maintained that he never intended to defraud banks and that he has repaid more than what was owed. In a post on X (formerly Twitter), he stated:

“The Debt Recovery Tribunal adjudged the Kingfisher Airlines debt at ₹6,203 crore, including ₹1,200 crore in interest. The Finance Minister announced in Parliament that banks, through the ED, have recovered ₹14,131.60 crore from me. Yet, I am still labeled an economic offender. Unless the ED and banks can legally justify how they have taken more than two times the debt, I am entitled to relief.”

Mallya’s petition in the Karnataka High Court is part of his ongoing legal battle to challenge his status as a fugitive economic offender and seek transparency in loan recovery proceedings.

What’s Next in Mallya’s Case?

1️⃣ February 2025 – The Karnataka High Court will review the responses from banks and loan recovery officers.
2️⃣ Extradition Efforts – The Indian government continues to push for Mallya’s extradition from London, where he currently resides.
3️⃣ Legal Battle Continues – The case remains one of the most high-profile financial fraud cases in India, with significant implications for banking transparency and legal accountability.

Vijay Mallya’s legal fight is far from over, as he continues to seek relief from Indian courts while the government remains firm on holding him accountable for his financial misconduct.

Conclusion: A Landmark Case in India's Financial History

The Vijay Mallya case highlights critical issues in India's financial sector, from corporate debt mismanagement to legal loopholes that allow economic offenders to flee the country.

While Mallya claims to have repaid his loans, banks and enforcement agencies argue that public money must be recovered legally. The upcoming court hearings will determine whether he receives any relief or remains on India’s list of fugitive economic offenders.

Stay tuned for further updates on this high-profile case. 🚨⚖️

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