Temporary relief for Vijay Mallya

Vijay Mallya won a minor victory on Saturday in his ongoing fight to prevent banks from declaring him a wilful defaulter with Kingfisher Airlines securing a stay from the Calcutta High Court on the decision of United Bank of India.

The Kolkata-based bank had earlier named Mallya along with directors of Kingfisher Airlines, Subhas Gupte, Anil Kumar Ganguly, Ayani Kurassi and Ravindranath Nedungadi, as wilful defaulters after the grounded airlines failed to pay up loans taken from the bank.

The bank has been directed to file its affidavit-in-opposition by November 3 and the petitioners have been directed to file their reply one week thereafter. The next date of hearing has been fixed for November 10.

The timing of the stay is crucial as Mallya along with his ally Saroj Poddar on Friday renewed their effort to safeguarding management control of Mangalore Chemicals and Fertilizers and to ward off a takeover attempt from Sailesh Mehta of Deepak Fertilisers.

If the defaulter tag got stuck on Mallya it would have been difficult for him to continue as chairman of MCF as well as other group companies.

While UBI has already declared Mallya a wilful defaulter, State Bank of India's forensic audit revealed Kingfisher diverted funds to Formula One.

With his Special Leave Petition before the Supreme Court being turned infructuous, the apex court earlier directed Mallya to pursue legal remedies against United Bank before the Kolkata High Court.