After a protracted legal battle, State Bank of India (SBI) has declared industrialist Vijay Mallya a 'wilful defaulter' for defaults on nearly Rs 7,000 crore loans to the long-grounded Kingfisher Airlines, said the media reports.
"SBI has declared Mallya, Kingfisher Airlines and its holding company United Breweries Holdings as wilful defaulters," sources told PTI.
However, the Supreme Court upheld the High Court verdict and asked SBI to consider this only as "a one-off instance" and allow Mallya's lawyers to represent him at the grievance reddressal committee meeting which was held recently.
However, the lawyers could not satisfactorily present a case of genuine distress of Mallya and his companies in not paying the money they owe to the bankers.
Following this, SBI declared them as wilful defaulters, the source added.
However, Mallya can still challenge the label in the apex court through review petitions, according to banking experts.
Meanwhile, following the development, the 17 lenders to the airline has said they will e-auction the assets of the grounded airline, in their latest bid to part recover their dues of around Rs 7,000 crore and accrued interest on the principal, that not been serviced since January 2013.
The airline, owned by flamboyant liquor baron Mallya, had taken Rs 6,900 crore from a consortium of 17-lenders led by State Bank of India in early 2010 after a second debt restructuring for the airline.
SBI has an exposure of Rs 1,600 crore to the airline.
Out of this, the bankers, which recalled the loan in February 2013, could recover only around Rs 1,100 crore after selling pledged shares of UB Group companies.
Lenders have also decided to auction the assets of the grounded airline in a bid to part recover their dues which have not been serviced since January 2013.
The assets to be e-auctioned on December 7 include the equipment and movable assets of the airline and not the bigger properties like the Kingfisher House here and the Kingfisher Villa in Goa worth around Rs 90 crore, and both have been taken over the lenders in recent past.
In a notice issued here today SBICap Trustee, which is a security trustee for the lenders consortium to the airlines, said it would e-auction the cars, towing machines, forklifts, tractors, fire extinguishers, and iron ladders among others of the airline under their possession.
SBICap Trustee, which is an arm of SBI, has set a reserve price of Rs 65 lakh, and said the auction will be conducted on December 7.
Banks are now charging 15.5 per cent compounded interest on this principal amount, which have not been serviced since January 2013 which would take is overall dues to over Rs 8,000 crore.