LONDON: liquor tycoon in debt Vijay Mallya Friday stepped up his fight against bankruptcy in UK courts, arguing that the banks’ amended bankruptcy petition against him was not in effect as banks could not lose the security they had on his assets in India because he was against. the public interest in India to do so since the money it had borrowed was “public money”.
A consortium of Indian banks, led by State Bank of India, is seeking to bankrupt the Indian businessman in Britain to appoint a bankruptcy trustee with broad powers to investigate his assets around the world and recover the Rs 11,000 crore he owes them under a personal guarantee that gave for loans Kingfisher Airlines before it went out of business.
On April 9, 2020, banks were ordered to file an amended bankruptcy petition agreeing to waive any collateral they hold on its assets in India in the event of a bankruptcy order, in order to comply with UK insolvency laws. Banks are appealing to this order.
But Philip Marshall QC, representing Mallya, told the Company and Insolvency Tribunal on Friday that under Indian law banks would not be allowed to give up their security on Mallya’s Indian property should a ruling be issued. bankruptcy in the UK, as the money it owed was slow public money from nationalized banks. His argument was that any bankruptcy decision issued as a result of the amended petition would therefore be “formulated on a false premise”.
He pointed to various judgments in India relating to Mallya, including the DRT is PLMA rulings, which found that banks held collateral on Mallya’s assets above other secured creditors, including Diageo, as well as above the Direction of execution, due to the fact that they slow down public money. “Indian banks are not allowed to assert before this court that there is no public interest in maintaining security when they have taken the opposite position in Indian proceedings,” Marshall said.
Marshall added that much of the Rs 11,000 crore was “principal debt interest” and Mallya he was challenging this interest in the Indian courts. “If we look at this and consider the realization of your assets to meet the petition debt as well as the assets of the joint debtors, then you don’t end up with enough amount to keep the bankruptcy petition and therefore the security issue is very significant,” “He said.
He also pointed out that there is no recognition of cross-border insolvency in India. “There is no legislation allowing for the recognition of a British bankruptcy trustee in India, so how can a trustee work effectively to achieve security located in India if it cannot be released?”
Marcia Shekerdemian QC, representing the banks, said: “There is no general rule of public policy in India that prevents a bank from giving up on security and this is nowhere in Indian statutes. How can a bank not manage the security. how do you want your safety? ”
The Chief Justice of the International Criminal Court, Briggs, reserved the judgment.