New Delhi: Embattled businessman Vijay Mallya was held guilty of contempt by the Supreme Court on a plea by a consortium of banks led by the SBI, for his failure to furnish details of all his assets.
A bench comprising justices Adarsh Kumar Goel and U.U. Lalit directed Mallya, who is presently in the United Kingdom, to appear before it on July 10 to argue on the quantum of punishment in the matter.
The offense of contempt of court entails a maximum imprisonment of up to six months or a fine of upto Rs 2,000 or both.
"We have found Vijay Mallya guilty of contempt of court on two grounds," the bench said, adding, "We give him an opportunity to argue on the quantum of punishment for which he must remain present in the court on July 10".
India had recently asked Britain to ensure early extradition of Mallya, who is an accused in a bank loan default case of over Rs 9,000 crore involving his defunct Kingfisher Airlines.
The apex court's order came on a plea by the consortium of banks, led by the State Bank of India (SBI), which had said that Mallya had allegedly transferred $40 million received from British firm Diageo, to his children in "flagrant violation" of various judicial orders.
The banks had argued before the court that Mallya had willfully disobeyed the orders and had made "vague" disclosure about his assets.
The top court had on March 9 asked the liquor baron about the "truthfulness" of his disclosure of assets and transfer of money to his children.
The bench had reserved its order on two pleas of lending banks seeking contempt action and a direction to Mallya to deposit $40 million received from offshore firm Diageo respectively.
The banks have alleged that Mallya had concealed the facts and diverted the money to his son Siddharth Mallya and daughters Leanna Mallya and Tanya Mallya in "flagrant violation" of the orders passed by the Karnataka High Court.
The bench had earlier posed several queries to the consortium of banks and asked it whether any criminal proceedings have been initiated against Mallya.
The court had asked Mallya why he had not disclosed the receipt of $40 million from London-based company Diageo Plc and subsequent transfer of money to trusts to which his three children were the beneficiaries.
Attorney general Mukul Rohatgi and senior advocate Shyam Divan, appearing for the banks, had contended that unless Mallya deposited $40 million before this court, he does not deserve to be heard and, moreover, he needed to appear personally as the contempt notice has already been issued.
Rohatgi had also argued that the government was seeking deportation of Mallya from the UK.
Divan had referred to various orders passed by the Debt Recovery Tribunal (DRT), the High Court and the Supreme Court and said that DRT has passed a decree in favor of the banks and the amount to be recovered is approximately Rs 9,200 crores.
There was a specific order of the High Court that Mallya will not transfer or alienate any movable and immovable assets to any person, he had said.
The bench had asked as to how the DRT's decree to recover Rs 9,200 crore would be executed, to which the Attorney General had said "God knows, how will it get the money back," adding that Mallya has taken this court for "a ride".
The bench had also asked senior counsel C.S. Vaidyanathan, who was appearing for Mallya, about the response on the contempt notice.
The lawyer had said that an application for recall of the order has been filed and according to him, no contempt is made out and hence, the plea itself can be considered as the reply.
Mallya's counsel had also said the money which came from Diageo belonged to his children and not him.
"Somebody who is faced with a default of Rs 6,200 crore and suppose if he gets Rs 3,000 crore, he should have given it to repay the dues," the bench had said.
However, Mallya's counsel had maintained that the $40 million was not covered under the injunction order.
In October last year, the court had rapped Mallya for not making full disclosure of his overseas properties and had asked him to do so within a month.
The bench had also pulled up Mallya for not giving details of $40 million which he had allegedly received from Diageo in February last year, saying it was of the "prima facie view" that proper disclosure as per its earlier order was not made.
The banks had on August 29 last year told the Supreme Court that Mallya had deliberately not made full disclosure of his assets including the $40 million he received on February 25 from Diageo.