The Calcutta High Court today directed that Kingfisher Airlines chairman Vijay Mallya and members of its board of directors may be represented by its law officers or the company secretary on a notice of showcause by United Bank of India (UBI) officials for alleged wilful default on payment of dues of nearly Rs 400 crore.
Justice Dipankar Dutta directed that UBI authorities would have to give 72-hour notice to Kingfisher for fixing a date for the meeting, which was scheduled yesterday, but was adjourned owing to the petition filed by the grounded airline before the high court.
Justice Dutta directed that the company's law officers or the company secretary may appear before the bank authorities on Mallya and other board members' behalf.
Justice Dutta, however, dismissed the petition as without merit.
Kingfisher Airlines yesterday moved the high court challenging a communication by UBI that asked its chairman Vijay Mallya and other board members to meet the bank officials for alleged wilful default on payment of dues.
The airline authorities had in the petition prayed for withdrawal of the notice for wilful default by UBI and that they be allowed a personal hearing along with legal representative on the issue.
They claimed that the bank authorities have refused to allow any legal representative, which would mean a practising lawyer, to accompany Mallya or his board members for the meeting, which was scheduled to be held at the UBI headquarters yesterday.
They submitted that the bank cited the Master Circular of Reserve Bank of India (RBI) which has not kept any provision for such representation.
The counsels claimed that as there was no provision, it was the discretion of the bank concerned, but the UBI has disallowed its contention without citing any reason.
The counsels for UBI submitted that a credit limit of Rs 398.22 crore was sanctioned to Kingfisher Airlines, Bangalore, by the bank.
They alleged that repayment was defaulted and funds were diverted.
It was claimed that a consortium of banks with the lead bank being the State Bank of India had extended loans to Kingfisher. UBI was part of the consortium.