A bench of the Calcutta High Court has refused to hear further or pass an order in a case where Mallya's holding company United Breweries Holdings Ltd (UBHL) is challenging United Bank's decision to name it a wilful defaulter.
While stakeholders await a verdict on whether Vijay Mallya can be legally termed as wilful defaulter, the issue has hit another setback.
A bench of the Calcutta High Court has refused to hear further or pass an order in a case where Mallya's holding company United Breweries Holdings Ltd (UBHL) is challenging United Bank's decision to name it a wilful defaulter.
While the case was filed by UBHL, the decision on this case would have been crucial and the verdict could have gone against it as Reserve Bank of India was made a party to the case.
In an earlier case, the court had turned down United Bank's plea to name Mallya's another company – Kingfisher Airlines – a wilful defaulter.
Justice Dipankar Datta has said that the Bench of the Calcutta High Court was hearing the plea of United Breweries Holdings erroneously for the past one year, and now it has realised that the bench lacks the jurisdiction to do so.
"This writ petition has been heard by this Bench on diverse dates right from July 2015 to June 2016, not noticing that during this period of time it did not have the determination to hear the same. On an erroneous assumption of jurisdiction, this Bench even passed an interim order protecting the interest of the petitioner till the disposal of the writ petition," the judge said in a recent ruling, putting an end to the to the petition filed by UBHL.
Explaining further, justice Datta said determination to hear 'vires' matters lay with the division bench presided over by the Chief Justice.
UBHL is the holding company for Vijay Mallya's ventures, including spirits maker United Breweries. The beleaguered industrialist has drawn flack from lenders to Kingfisher Airlines who are seeking to recover their dues. His financial troubles began to mount after Kingfisher Airlines had to be grounded under big losses and huge debt.
After United Bank, other bigger lenders like Punjab National Bank had named UBHL as wilful defaulter as well.
While Kolkata-based United Bank was the first bank to name Mallya a wilful defaulter, Calcutta High Court nulled UBI's decision due to its failure to follow the norms laid down by Reserve Bank of India to identify a borrower as wilful defaulter.
The bank then named UBHL as a wilful defaulter for being a guarantor to Kingfisher, a decision which was also challenged by Mallya.
This case assumed significance as the role of regulator RBI was also brought into question by the court.
Apart from commenting that "natural justice ought to have been read in the relevant clause of the master circular", the court, a year ago, had asked the Reserve Bank to present itself in the case since the master circular, which detailed the guidelines for proclaiming someone wilful defaulter would require interpretation.
Following this, RBI filed an affidavit-in-opposition and its lawyers expressed its views on the case.
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