Fugitive Indian businessman Vijaya Mallya declared bankrupt by UK High Court

The UK High Court on Monday has declared Indian fugitive businessmanVijay Mallya bankrupt.

This comes as a major development for a consortium ofIndian banks as the bankrupt orders will pave way for them to pursue a worldwidefreezing order to seek repayment of debt owed by the now-defunct KingfisherAirlines.Notably, a consortium of Indian banks is led by the StateBank of India (SBI).

"As at 15:42 (UK time), I adjudicate Dr. Mallyabankrupt," Chief Insolvencies and Companies Court (ICC) Judge MichaelBriggs said in his ruling during a virtual hearing of the Chancery Division ofthe High Court in London.

Despite the latest bankruptcy order, Vijay Mallya remainson bail, in the UK while a ‘confidential’ legal matter, apparently related to an asylum application is resolved in connection with the unrelated extraditionproceedings.

During the hearing, the consortium of Indian Banks representedby law firm, TLT LLP and barrister Marcia Shekerdemian argued for the bankruptedorder to be granted in their favor.

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The petitioners were made up of an SBI-led consortium of 13banks, including Bank of Baroda, Corporation Bank, Federal Bank Ltd, IDBI Bank,Indian Overseas Bank, Jammu & Kashmir Bank, Punjab & Sind Bank, PunjabNational Bank, State Bank of Mysore, UCO Bank, United Bank of India, and JM FinancialAsset Reconstruction Co. Pvt Ltd as well as an additional creditor had beenpursuing a bankruptcy order in the UK in relation to a judgment debt whichstands at over GBP 1 billion.

It has been learnt from the reports, fugitive businessmanhas sought a stay as well as an adjournment of the order while legal challengesare underway in the Indian courts. Perhaps, the request was dismissed by thejudge, who concluded that there was “insufficient evidence” that the debt willbe paid back to the petitioners within a stipulated period of time.

Moreover, Vijay Mallya also moved the High Court with anapplication seeking permission to appeal against the bankruptcy order; however,it was refused by Judge Briggs due to “no real prospect of success” of anappeal.

As of now, the defunct-Kingfisher Airlines owner, Mallya’sdebt comprises of principal and interest, plus compound interest at a rate of11.5 percent per annum from 25 June 2013. Pertinently, Vijay Mallya has madeapplications in India to contest the compound interest charge.