Mallya continues to evade law, asset recovery does not end money laundering case: ED to HC

Mumbai: Vijay Mallya continues to evade the legal process in India and the recovery of debts by banks does not invalidate the money laundering case against him, the Enforcement Directorate has told the Bombay High Court.

The agency filed an affidavit on September 8 in response to a petition moved by the former liquor baron in 2020 seeking closure of criminal proceedings against him.

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Mallya had argued that his dispute with the banks stood settled after the lenders recovered the outstanding debts.

The ED, however, said movable and immovable assets worth Rs 14,131.6 crore had been handed over to the SBI-led consortium, but the recovery did not result in the cancellation or dropping of money laundering charges against him.

According to the agency, Mallya left India in March 2016 and failed to appear before the investigating authority despite repeated summons. A non-bailable warrant was also issued against him.

The businessman was declared a proclaimed offender in November 2016.

"Applicant (Mallya) continues to evade the process of law and has not returned to India or submitted himself to the jurisdiction of the competent criminal court," the ED said in its affidavit.

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The agency further said that despite the High Court asking whether Mallya intended to return to India and submit himself to the jurisdiction of the court, he remained elusive in his responses.

"The criminal prosecution launched pursuant to the investigation under the PMLA is not rendered infructuous merely because the claimant banks have subsequently recovered substantial amounts from the assets restored to them," the affidavit said.

The ED said restoration of assets under the Prevention of Money Laundering Act was a statutory mechanism intended to allow legitimate claimants to recover their losses.

Mallya is accused of laundering money and misappropriating at least Rs 3,500 crore from the Rs 9,000 crore in bank loans extended to his now-defunct Kingfisher Airlines.

The ED had provisionally attached Mallya's properties in 2016.

In 2019, a special court allowed SBI and other lender banks to use Mallya's attached movable assets for recovering the outstanding debt. The assets included shares in United Breweries Holdings Ltd (UBHL).