The Supreme Court on Monday dismissed a plea filed by liquor baron Vijay Mallya's United Breweries Holdings Ltd (UBHL) challenging a Karnataka High Court order, to uphold the winding-up of the company for recovery of dues payable by Kingfisher Airlines Ltd.
A bench headed by Justice U.U. Lalit declined to entertain the appeal filed by the UBHL, thus affirming the winding-up of the 102-year-old parent company of the UB Group.
Senior advocate Mukul Rohatgi, representing the consortium of banks led by the SBI, informed the top court that so far around Rs 3,600 crore have been recovered from Mallya and UBHL but Rs 11,000 crore still remained.
Rohatgi contended that the Enforcement Directorate (ED) should not have attached the properties of the company as these were encumbered assets and thus banks had the first claim over them.
The total dues of UBHL to its creditors, as per the Karnataka High Court order in February 2018, are around Rs 7,000 crore.
Justice Lalit observed: "Winding-up is the last resort. It should not be readily accepted that the company is to be wound up. That is why we are giving so much time to you."
Senior advocate, C.S. Vaidyanathan, appearing for the UBHL, argued before the top court that there is more than ample for all creditors and this is not a case for winding-up. He insisted that it was the defence of even the banks that all these assets have been attached by the ED.
Vaidyanathan said the bulk of the assets are in the form of shares and these attachments are at the instance of the banks for the money they had loaned to the tune of Rs 900 crore, which was wrongfully diverted. However, all these assets had been acquired before Kingfisher had even availed of the loan, he added.
Rohatgi contended that Rs 15,000 crore is due now and it is a bogus argument that they have the money. "We have been able to recover Rs 3,595 crore. Rs 11,000 crore are remaining..There is 1,000s of crores worth of gap! No bonafide offer has been made for so many years," he argued.
After a detailed hearing in the matter, the top court dismissed the UBHL petition.
On September 30, the UBHL had told the Supreme Court that it had offered over Rs 14,000 crore to various banks to settle its dues and that the company's assets exceeded its total debt.
Vaidyanathan had submitted before the top court that since the company's assets exceeded the total debt, it was not the case wherein the company should be directed to wind-up.
He insisted that the ED had attached many assets of the company, as a result of which, nothing was available for the banks.
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