Kingfisher Airlines promoter Vijay Mallya faces another litigation in the Calcutta High Court today (July 21), where the company is battling with United Bank of India for not to be classified as wilful defaulter.
A person declared as a wilful defaulter will lose directorship in companies, and will not be able to borrow from any other bank.
As per the regulations of the Reserve Bank of India (RBI), borrowers should be allowed to meet the grievance redressal committee of the bank before classifying them as wilful defaulter as a natural course of justice. But Mallya wanted to meet the grievance cell with a lawyer that the bank has disallowed. The bank's contention is that it should be a meeting exclusively between the bank and the company, without any outsiders.
The grounded Kingfisher Airlines had moved the Calcutta High Court pleading for a lawyer to be allowed to accompany the company officials while meeting the bank grievance cell. The bank alleged that the company is willfully defaulting loan outstanding of Rs 360 crore. Outside the consortium, the bank gave a Rs 60 crore loan to Kingfisher for pre-delivery payment.
The counsels for Kingfisher submitted a plea for withdrawal of the notice for wilful default by United Bank of India, and they be allowed a personal hearing along with legal representative on the issue.
The United Bank of India was the first to take Kingfisher Airlines to court in 2013 when most other banks were giving a long rope to the company. The bank had filed a winding-up petition against the company for "wilful" defaults. The contention of the bankers was that no concerted action was taken by the company to revive its fortunes.
The consortium of 17 banks, led by State Bank of India (SBI), has an outstanding debt of about Rs 4,022 crore from the carrier. On July 18, the Goa Bench of the Bombay High Court allowed SBI-led lenders to initiate action against Kingfisher Airlines by approaching a magisterial court for permission to take possession of the Kingfisher Villa in Goa. In April 2013, a lower court had issued an injunction restraining lenders from taking possession of the Goa Villa of Kingfisher.
The lenders may be allowed to take possession and then sell the villa, depending on the final decision of the district magistrate.
Meanwhile, in another matter, the apex court has held it can allow banks to sell the Kingfisher House in Mumbai and retail the sale proceeds, subject to the final outcome of the ongoing litigation between the airline and lenders.