Non-Bailable Warrant Issued Against Vijay Mallya in Loan Default Case

A special court in Mumbai has issued a non-bailable warrant (NBW) against Vijay Mallya in a Rs 180-crore loan default case involving Indian Overseas Bank (IOB). The NBW was issued on June 29 by Judge S.P. Naik Nimbalkar of the special CBI court, with the detailed order released on Monday.

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The Central Bureau of Investigation (CBI) has accused Mallya, the promoter of the now-defunct Kingfisher Airlines, of causing a wrongful loss of over Rs 180 crore to IOB by wilfully defaulting on payments. The embattled liquor tycoon, already declared a fugitive economic offender in a money laundering case by the Enforcement Directorate (ED), currently resides in London. The Indian government is seeking his extradition.

CBI's Allegations and Court's Observations

The CBI claims that Mallya dishonestly defaulted on loan repayments, causing a wrongful loss of Rs 141.91 crore due to defaults and an additional Rs 38.30 crore from converting loans to shares. The agency also alleged that loans availed by Kingfisher Airlines from IOB between 2007 and 2012 were diverted for purposes other than intended.

The court noted that multiple NBWs had been issued against the 68-year-old businessman, citing his status as a fugitive. "This is a fit case to issue an open-ended NBW against him to secure his presence," the court stated. The CBI's plea highlighted that Mallya continues to evade legal processes in India while residing in England.

Loan Restructuring and Diversion Allegations

According to a recent chargesheet filed by the CBI, Kingfisher Airlines had obtained credit facilities from IOB under an agreement. In August 2010, the Reserve Bank of India (RBI) directed State Bank of India (SBI) to consider restructuring Kingfisher Airlines' existing facilities as a one-time measure for the aviation sector. Consequently, IOB and other lenders restructured these facilities through a Master Debt Recast Agreement (MDRA).

The allegations include false promises and diversion of loans for purposes other than those intended. The CBI court took cognisance of the chargesheet and issued process summons against Mallya and five other accused. However, the agency pressed for an NBW against Mallya, citing his fugitive status.

Legal Proceedings and Extradition Efforts

Mallya left India in March 2016 amid multiple allegations of loan defaults and money laundering. In January 2019, he was declared a Fugitive Economic Offender by a special court under the Prevention of Money Laundering Act (PMLA). The Indian government continues efforts to extradite him from London.

The court observed that issuing process summons would serve no purpose given Mallya's absconding status and pending NBWs in other cases. Thus, it deemed it appropriate to issue an open-ended NBW to secure his presence.

The ongoing legal proceedings highlight India's efforts to bring Vijay Mallya back to face charges related to significant financial misconduct.