Mallya rushes to SC to stop government from taking over his assets
Dhananjay Mahapatra | TNN | Updated: Dec 8, 2018, 00:19 ISTHighlights
- SC agreed to entertain Mallya's appeal against a Bombay high court order refusing him relief but said “there will no stay on the proceedings”
- His counsel Fali S Nariman said when properties attached under PMLA were auctioned, debtors would have a claim on the money so raised
Fugitive liquor baron Vijay Mallya NEW DELHI: Holed up in UK to escape the legal process in India to recover Rs 9,000 crore he owes banks, erstwhile liquor baron Vijay Mallya on Friday pleaded with Supreme Court to stay the Enforcement Directorate initiated proceedings to declare him a ‘fugitive economic offender’.
Mallya got partial success as a bench of Chief Justice Ranjan Gogoi and Justice Sanjay K Kaul, after hearing his counsel Fali S Nariman, agreed to entertain his appeal against a Bombay high court order refusing him relief but said “there will no stay on the proceedings”.
Mallya sought to draw the court’s attention to provisions of the Fugitive Economic Offenders Act, which allowed the government to confiscate his properties even as they have already been attached by the ED under the Prevention of Money Laundering Act.
Nariman said when properties attached under PMLA were auctioned, debtors would have a claim on the money so raised. However, under the FEO Act, debtors would have no claim over sale proceeds of the attached properties as the entire money went to the government.
Challenging the Bombay HC’s order declining a stay, Mallya’s petition said, “Refusing to stay hearing of the application under Section 4 of the FEO Act to declare the petitioner (Mallya) a fugitive economic offender and confiscate all his assets (which have been previously attached under the provisions of PMLA) has serious consequences for the petitioner.”
It added, “The two attachment orders have been confirmed by the adjudicating authority under PMLA, against which appeals (by Mallya) are currently pending. The proceedings under PMLA being prior in point of time, no prejudice can be caused to the ED or consortium of banks of any of the other creditors if the SC granted stay of proceedings before the special court under FEO Act.”
Mallya claimed that United Breweries (Holdings) Ltd on June 22 had moved an application, which was supported by him, before the Karnataka HC offering to settle Rs 13,960 crore through sale of identified assets of UBHL, Mallya and his family members under the supervision of a retired HC judge and deposit the sale proceeds prior to determination of the share of creditors.
Mallya got partial success as a bench of Chief Justice Ranjan Gogoi and Justice Sanjay K Kaul, after hearing his counsel Fali S Nariman, agreed to entertain his appeal against a Bombay high court order refusing him relief but said “there will no stay on the proceedings”.
Mallya sought to draw the court’s attention to provisions of the Fugitive Economic Offenders Act, which allowed the government to confiscate his properties even as they have already been attached by the ED under the Prevention of Money Laundering Act.
Nariman said when properties attached under PMLA were auctioned, debtors would have a claim on the money so raised. However, under the FEO Act, debtors would have no claim over sale proceeds of the attached properties as the entire money went to the government.
Challenging the Bombay HC’s order declining a stay, Mallya’s petition said, “Refusing to stay hearing of the application under Section 4 of the FEO Act to declare the petitioner (Mallya) a fugitive economic offender and confiscate all his assets (which have been previously attached under the provisions of PMLA) has serious consequences for the petitioner.”
It added, “The two attachment orders have been confirmed by the adjudicating authority under PMLA, against which appeals (by Mallya) are currently pending. The proceedings under PMLA being prior in point of time, no prejudice can be caused to the ED or consortium of banks of any of the other creditors if the SC granted stay of proceedings before the special court under FEO Act.”
Mallya claimed that United Breweries (Holdings) Ltd on June 22 had moved an application, which was supported by him, before the Karnataka HC offering to settle Rs 13,960 crore through sale of identified assets of UBHL, Mallya and his family members under the supervision of a retired HC judge and deposit the sale proceeds prior to determination of the share of creditors.
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