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SC issues notice to Mallya; AG says has left country on Mar 2

The Supreme Court on Wednesday issued a notice to Vijay Mallya on a petition by a consortium of 17 banks seeking impounding of his passport.

The court has allowed notice be served to Mallya through his official Rajya Sabha email ID through Indian High Commission at London & his counsel & Co.

Attorney General Mukul Rohatgi told the court that Mallya left the country on March 2, 2016. He told the SC that Mallya’s assets abroad are far in excess to loans taken by him.

The Supreme Court questioned why loans were given to Mallya when he was a defaulter and was facing proceedings in court of law.

A group of banks led by the State Bank of India moved the apex court on Tuesday seeking to restrain Mallya from leaving India.

On Tuesday, Finance Minister Arun Jaitley threw his weight behind the lenders, saying each penny lent must be recovered.

“Well, I think it’s not only a legal but a moral obligation that every banking institution in India has to recover the last pie,” Jaitley said.

The government cannot accept a “situation where 15 or 20 people are sitting on so much money of the banks, that the ability of the banks to lend to thousands of others” get severely impacted, he said.

“Whatever steps the banks will take in this matter, the government of India will stand behind them but also actively encourage them to protect their own interest which is also the larger public interest because the public money is involved in the banks,” Jaitley said.

“After all, I am taxing the people of India to put money into the capital of the banks,” he added.

This came after the Debt Recovery Tribunal (DRT) barred Vijay Mallya from accessing USD 75 million (Rs 515 crore) exit payment from Diageo over the loan default case. The Enforcement Directorate also registered a money laundering case over a loan default with IDBI .

DRT, allowing a plea by State Bank of India, restrained Diageo from disbursing the money for now and set March 28 as the next date of hearing. The public sector bank had sought DRT’s intervention in seeking the lenders’ first right on the severance payout from Diageo.

Earlier, SBI had filed a plea seeking Mallya’s arrest and impounding of his passport. Mallya’s defunct Kingfisher Airlines owes Rs 7,800 crore to a consortium of 17 banks led by SBI.

Reacting to this news, HP Ranina, Sr Advocate at Supreme Court told CNBC-TV18 that this is a normal procedure followed by the apex court in order to hear the other side and in case Vijay Mallya does not willfully turn up then summons will be issued to him.

(With inputs from CNBC-TV18)