Court examines quashing of Special PMLA Court order on confiscated assets; SBI and Enforcement Directorate to respond.
In a significant development, the Bombay High Court has issued notices to the State Bank of India (SBI) and the Directorate of Enforcement in connection with the ongoing legal proceedings involving businessman Vijay Vittal Mallya. The court is examining a criminal application seeking to quash the Special PMLA Court's order that allowed the confiscated assets of Mallya to be utilized for debt recovery by a consortium of banks.
The application, originally filed in January 2020, has resurfaced as part of efforts to address old pending matters. It challenges the PMLA Court's decision from December 31, 2019, in the context of the Enforcement Case Information Report (ECIR) No. ECIR/03/MEZO/2016. Senior Advocate Mr. Amit Desai, representing Mallya, argued that the proceedings have become redundant due to subsequent asset dealings and settlements. He asserted that Mallya's civil liabilities have been substantially resolved, with banks recovering approximately Rs. 15,000 crore against an initial claim of Rs. 6,203 crore, including interest.
Mr. Desai highlighted that most of Mallya's assets identified by the Enforcement Directorate have been addressed, necessitating the closure of this commercial dispute. He also mentioned the significance of relying on the Reserve Bank of India's audit of Mallya's accounts.
The court, presided over by Justice Milind N. Jadhav, issued the notice to SBI, the lead bank in the consortium, and the Deputy Director of the Directorate of Enforcement. The notice aims to clarify the developments highlighted by Mr. Desai and ascertain further progress in the ECIR case. The matter is scheduled to be revisited on September 9, 2026, when the court will decide on the subsequent course of action after hearing from the Directorate of Enforcement.
Additionally, the court granted Mallya the liberty to file an additional affidavit detailing developments since the original application was filed. This affidavit will be served to both SBI and the Directorate of Enforcement for their responses.
In a related application, Kamsco Industries Pvt. Ltd., represented by Mr. Desai, is also involved in proceedings against SBI. The court directed SBI to provide a copy of its reply to the applicant before the next hearing date. This move comes after Mr. Desai informed the court about the absence of service of the reply from SBI.
The case highlights ongoing legal complexities surrounding asset recovery and civil liabilities, marking a crucial phase in the efforts to resolve financial disputes involving high-profile figures like Vijay Mallya.
Bottom line:-
Criminal Applications seeking quashing of the Special PMLA Court's order allowing confiscated assets for debt recovery - Issues relating to settlement, asset recovery, and civil liabilities highlighted - Notice issued to Respondent No. 1 (SBI) and Respondent No. 13 (Directorate of Enforcement) for further development in the ECIR case.
Statutory provision(s): Prevention of Money Laundering Act, 2002
Vijay Vittal Mallya v. State Bank of India, (Bombay) : Law Finder Doc id # 2960905
