Vijay Mallya declared bankrupt by London High Court; Indian banks can now realise debt
London, Jul 26: A British court on Monday granted a bankruptcy order against Vijay Mallya, paving the way for a consortium of Indian banks led by the State Bank of India (SBI) to pursue a worldwide freezing order to seek repayment of debt owed by the now-defunct Kingfisher Airlines.
"As at 15.42 [UK time], I shall adjudicate Dr Mallya bankrupt," Chief Insolvencies and Companies Court (ICC) Judge Michael Briggs said in his ruling during a virtual hearing of the Chancery Division of the High Court.
"I have to decide if there is a real prospect of payment of petition debt in full within a reasonable period of time there is insufficient evidence that [Mallya's asset realisations in India] will pay the debt in full within a reasonable period of time, Judge Briggs noted, in reference to defence arguments pointing to a restoration process in India following a Prevention of Money Laundering Act (PMLA) court order for the attachment of Mallya's assets.
"In my judgment, the sums provided to date are conditional there is no evidence Dr Mallya will return to India to deal with the criminal trial and seek to unlock the allocation of realisations which have been made," the judge concluded.
The 65-year-old businessman, wanted in India on fraud and money laundering charges, remains on bail in the UK while a "confidential" legal matter, believed to be related to an asylum application, is resolved in connection with the unrelated extradition proceedings.
During the course of Monday's hearing, Judge Briggs asked Mallya's barrister, Philip Marshall, if there was any "indication" if his client intended to return to India to deal with the criminal proceedings and was told that there was no such indication.
The Indian banks, represented by the law firm TLT LLP and barrister Marcia Shekerdemian, had argued for the bankruptcy order to be granted in favour of the Indian banks who are owed over GBP 1 billion and pointed out that the long-drawn legal battle would complete its third birthday in September this year".
"The Petitioners [banks] say enough is enough. They have not been paid in full and no part of their debt is the subject of a serious dispute warranting the dismissal or further adjournment of the petition. A bankruptcy order should be made, with no further delay, the banks' legal team argued.
"The sum of GBP 1.05 billion remains due. Even if one were to treat his interest challenge as having any relevance (which it does not, whether as a matter of discretion or otherwise) a sum of close to GBP 0.5 billion is due Moreover, even if the assets received by the Petitioners provisionally were to be treated as payment towards the Debt (which they should not be), the sum of circa GBP 0.52 billion (INR 5,336.39 crores) would still remain due to the Petitioners. Even on that footing, therefore, the Petitioners are entitled to a bankruptcy order, they argued.
Once a bankruptcy order is made in the UK, there is an automatic vesting of all of the bankrupt's assets in a Trustee in Bankruptcy, whose role is to investigate their affairs and establish their true assets and liabilities, with a view to selling relevant assets and paying back the bankrupt's creditors. Under UK law, a bankrupt person must cooperate with the Trustee in Bankruptcy.
Such a person is prohibited from obtaining credit for more than GBP 500 without disclosing their bankrupt status, or acting as the director of a company without the court's permission.
A bankrupt person is also automatically discharged from their bankruptcy after one year unless an order is made suspending this discharge.
Immediately after the order was handed down on Monday, Mallya's barrister sought a stay followed by an adjournment of the order while legal challenges remain ongoing in the Indian courts. However, the requests were turned down by the judge, who also declined an application seeking permission to appeal against the bankruptcy order as he found there was no "real prospect of success" of such an appeal.
Mallya's counsel, who has indicated plans to pursue an appeal against the bankruptcy order in the higher appellate court, had argued that the Indian banks were pursuing the same debt against him both in India and the UK.
He said: "It is the Petitioners who have chosen to seek to ride two horses, by pursuing enforcement measures for themselves in India even as they seek to invoke a class insolvency remedy here.
"Any bankruptcy order, by contrast, would be self-evidently unjust and cause irreversible harm to Dr Mallya, notwithstanding the (at least) serious doubt which exists as to whether any further sum in fact remains unpaid or outside the Petitioner's power to realise."
The petitioners were made up of SBI-led consortium of 13 Indian banks, including Bank of Baroda, Corporation bank, Federal Bank Ltd, IDBI Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Punjab & Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank, United Bank of India and JM Financial Asset Reconstruction Co. Pvt Ltd.
The debt in question comprises principal and interest, plus compound interest at a rate of 11.5 per cent per annum from 25 June 2013.
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Balendra Shah's RSP makes history, registers landmark victory in Nepal elections
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Kathmandu (PTI): Rapper-turned-politician Balendra Shah's RSP is all set to form the next government in Nepal after securing sweeping victory in crucial general elections on Saturday, decimating the established parties in the politically fragile nation.
Popularly known as Balen, the 35-year-old prime ministerial candidate of the Rastriya Swatantra Party (RSP) defeated four-time prime minister KP Sharma Oli, the chair of Nepal's legacy party, the Communist Party of Nepal (Unified Marxist–Leninist) -- CPN-UML -- by a huge margin of about 50,000 votes in Jhapa-5 constituency.
Balen, 35, secured 68,348 votes against 74-year-old Oli's 18,734, the Election Commission (EC) said.
He is expected to be the next prime minister of Nepal, reflecting a public mood of rejection of established parties. The RSP, which was formed in 2022 by Ravi Lamichhane, has won 72 seats out of the 90 seats for which results were declared by 9:30 pm, according to the Election Commission (EC).
RSP's seats include a clean sweep in all 10 constituencies of Kathmandu district even as it is leading in 52 seats across the country, the EC data showed.
Legacy parties failed to convince voters for whom the major issues included fighting corruption and an end to nepotism apart from a generational change in political leadership of the Himalayan nation.
The Nepali Congress (NC) won 10 and was leading in eight seats; the CPN-(UML) won just four seats and is leading in eight; the Nepali Communist Party (NCP) won two seats and is leading in five, the Shrama Shakti Party (SSP) was leading in three seats, and the Rastriya Prajatantra Party (RPP) won one seat, the EC data showed. Among the winners is one independent.
Nepal witnessed about 60 per cent voter turnout during the March 5 elections to the House of Representatives. The counting of votes started late Thursday night and as of 9:30 pm Saturday, counting was in progress in the remaining of the total 165 constituencies, the Election Commission said.
The election was being closely watched by India, which is hoping for a stable government in the politically fragile Himalayan nation to take forward the developmental partnership between the two sides.
Prime Minister Narendra Modi on Saturday congratulated the people and government of Nepal for the successful conduct of elections. “It is heartening to see my Nepali sisters and brothers exercise their democratic rights so vibrantly. This historic milestone is a proud moment in Nepal's democratic journey,” Modi said in a post on X.
Modi also said that as a close friend and neighbour, India remains steadfast in its commitment to working closely with the people of Nepal and its new government to scale new heights of shared peace, progress and prosperity.
Oli, who too was projected as the PM face of the CPN-UML, wished Balen for a full five year tenure for his government in the Himalayan nation that has seen 14 governments in the last 18 years.
“Balen babu, congratulations for the victory. I wish your five year tenure be trouble free, successful and hearty congratulations,” Oli wrote in his social media post and attached a 2022 photo showing him gifting a tabla to Balen after the rapper-turned-politician won Kathmandu mayor's election as an independent.
The RSP, which projected Balendra Shah 'Balen' as its prime ministerial candidate and had organised its first election campaign in Janakpur in Madhesh, is heading towards a clean sweep of the province.
‘Balen’, as he is popularly known, projected himself as the “son of Madhesh” during the campaign, with the party launching the campaign with 'Ab ki bar Balendra Sarkar' (This time there will be Balendra’s government) tagline.
Of the total 32 seats in eight districts of Madhesh province, the RSP has won eight and is leading in 22 other constituencies, the EC said.
The party is also making a clean sweep in the Kathmandu Valley winning all 10 seats of Kathmandu district and two in Bhaktapur and two in Lalitpur district.
The party is also leading in the remaining one seat of the Kathmandu Valley with a huge margin, possibly as a result of a massive road show led by Balen in all 15 constituencies on the last day of the election campaign.
RSP chairman Lamichhane won with a huge margin from Chitwan-2 constituency, marking his third consecutive victory with 54,402 votes against his nearest rival NC's Mina Kumari Kharel, who received 14,564 votes.
According to the Election Commission, former prime minister and NCP leader Pushpa Kamal Dahal Prachanda won from Rukum Purba district by securing 10,240 votes against his rival Lilamani Gautam of CPN-(UML), who got 3,462 votes.
RPP's Gyanendra Shahi won from the Jumla constituency of Karnali province by defeating his closest rival Naresh Bhandari of the NCP and became the only candidate of the pro-monarchist RPP to have secured a seat in the House of Representatives.
The election also saw 10 women candidates win, nine of them from the RSP while one from NC.
Meanwhile, the RSP is also leading in proportional voting system with the party bagging 474,266 votes followed by Nepali Congress with 160,384. The CPN (UML) has received 127,841, Nepali Communist Party 65,363, the RPP 34,154, and Shrama Shakti Party 17,437 votes till now.
Out of a total of 275 members of the Parliament, 165 are being elected through direct voting, while the remaining 110 through a proportionate method.
Around 3,400 candidates were vying for 165 seats under direct voting, and 3,135 candidates for 110 seats through proportionate voting.
The Gen Z youth, through their two-day intensified protests on September 8 and 9 last year, ousted Prime Minister Oli of the CPN-(UML), who was heading a coalition government with the backing of Nepali Congress that enjoyed nearly two-thirds majority support.
Though Balen was a popular choice to lead the interim government after Oli's ouster, he declined to lead the interim administration, saying he would prefer to contest the parliamentary election for a full term.
In January, he joined the RSP and was soon declared the party's prime ministerial candidate.
The major issues raised by Gen Z before and during the election campaign were anti-corruption, good governance, an end to nepotism, generational change in political leadership, etc.
Sunil Babu Pant, former MP and a political analyst, said, “The victory of Rastriya Swatantra Party in the March 5 elections and the expectation that Balen Shah could emerge as Nepal's next Prime Minister reflects the people's deep rooted frustration with the old political order and their hope for a new direction.”
“As Balen assumes the country's leadership, his first responsibility must be to demonstrate that corruption will not be tolerated under any circumstances,” he said.
Balen will also face a complex geopolitical challenge, Pant said, adding, “He must prove that he is not a puppet of any external power, western or otherwise. Nepal's leadership must carefully balance relations with all global actors and pursue an independent foreign policy that prioritises the national interest.”
