Liquor tycoon-turned-fugitive economic offender Vijay Mallya's grip on his prized London home is looking shaky with the UK High Court recently rejecting many of the arguments against bank foreclosure put forward by his legal team. Swiss bank UBS has sought repossession of the property at Cornwall Terrace over the non-payment of a five-year 20.4 million pound (about Rs 185.4 crore) mortgage loan.
According to The Times of India, the 62-year-old ex-billionaire, his 31-year-old son Sidhartha and his 92-year-old mother Lalitha currently live in this townhouse overlooking Regent's Park in central London. UBS is seeking an order for possession against the three family members and an order for payment of the sum due against Rose Capital Ventures Limited. Mallya's team claims the bank called in the loan ahead of an agreed period, but the bank says that it is within its rights to call in the mortgage for non-payment.
While a 10-day trial in the case has been scheduled for May next year, on Wednesday, Chief Master Marsh of the business and property courts of the High Court in London ruled on the UBS' application to strike out parts of arguments Mallya and his co-defendants had put forward in their amended defence dated May 11, 2018.
The court found substantially in favour of the bank, and Marsh ruled that all defence arguments except one should be "struck out" as they were "bound to fail". He also concluded that he can see no basis upon which the defendants should be given an opportunity to amend their defence. "They have had an ample opportunity to explain their case in answers to UBS' request for information. The case they put forward is not curable by simple amendments," Marsh added.
"I accept that the change of solicitors put the defendants' legal team under considerable pressure. However, I am not satisfied that the defendants have shown a good reason for seeking an adjournment. It seems to me that the defendants are largely the authors of their current misfortune," the judgment read. Moreover, the judicature has reportedly issued an order asking Mallya to pay a hefty amount of 88,000 pound to UBS Investment Bank.
The daily added that as per the judgement, Rose Capital purchased the derelict property in 2005, when the British Virgin Islands-registered company had no connection to the Mallya family. The property was used for offices and was purchased with a view to it being converted back to residential use. Two years later, Gladco Properties Inc, which is owned by the Sileta Trust, a Mallya family trust created by Lalitha, purchased shares in Rose Capital.
Planning permission to convert the property to residential use was granted in 2008 and refurbishment works commenced the following year to turn it into "a high class home for Dr Vijay Mallya and his family members and United Breweries Group corporate guests", the judgment states. Rose Capital mortgaged the property to UBS as security for the interest-only loan of 20.4 million pound by a mortgage deed dated March 27, 2012. The property was not inhabited until sometime after March 2012.
"UBS is pleased with the decision. Given that proceedings are ongoing, it would be inappropriate to comment further," the bank said in a statement.
Meanwhile, Mallya remains on bail on an extradition warrant executed by Scotland Yard last year on fraud and money laundering charges brought by the Indian government, amounting to nearly Rs 9,000 crore. A ruling in his extradition case is expected at Westminster Magistrates' Court in London next month.
With PTI inputs
Edited by Sushmita Agarwal