Vijay Mallya has lost his appeal against a UK bankruptcy order related to more than £1bn in debts owed to a group of Indian banks.
The decision marks a major legal setback for the embattled Indian tycoon, who has been fighting bankruptcy and extradition proceedings in Britain for years.
The High Court in London on Tuesday upheld a 2021 order that declared Mr Mallya bankrupt, rejecting his argument that the debts had effectively been repaid through the seizure of his assets by Indian authorities.
“The bottom line,” judge Anthony Mann ruled, “is that the bankruptcy order stands.”
The long-running case centres on loans made by a consortium of Indian banks, led by the State Bank of India, to Mr Mallya’s now-defunct Kingfisher Airlines.
In 2017, the banks secured a ruling from India’s Debt Recovery Tribunal giving them £1.12bn based on personal guarantees made by Mr Mallya.
The ruling was later registered in the UK and formed the basis of the bankruptcy petition filed in 2018.
Mr Mallya challenged the petition, but the Insolvency and Companies Court ruled against him in July 2021. His subsequent appeals against that order have now been definitively rejected.
TLT, the firm representing the banks, welcomed the ruling. “This is a significant result for the banks,” said Nick Curling, legal director at TLT, according to the Press Trust of India.
“TLT are pleased to have delivered this outcome, having acted for the banks since 2017 in relation to the DRT judgment of £1.12bn obtained against Dr Mallya.”
One of the key issues in the appeal was whether the banks held valid security over Mr Mallya’s assets. The 2020 ruling by the Insolvency Court had concluded they did, rendering the bankruptcy petition partly defective under UK insolvency law.
The banks contested that decision. The High Court ruled in their favour, finding that their position on security was lawful and that the asset recoveries did not satisfy the debt under English law.
In 2021, the banks amended their petition to relinquish any security they might hold if the bankruptcy order were upheld. Mr Mallya opposed this amendment, arguing that it contravened Indian law and public policy. But the court dismissed this argument and upheld the amendment.
Mr Mallya, 69, is separately seeking to annul the bankruptcy order through a fresh application scheduled for a directions hearing in October. His legal team has vowed to continue the fight.
“Mallya will, on this basis, pursue with vigour his application to annul the Bankruptcy Order in England in conjunction with proceedings in the Karnataka High Court to compel the banks to provide an accounting and come clean,” Leigh Crestohl of Zaiwalla & Co, representing the Indian businessman, said.
Mr Mallya, who previously co-owned the Formula One team Force India and was once dubbed the “King of Good Times” in India, fled to the UK in 2016 amid mounting allegations of financial wrongdoing.
He is also contesting extradition to India, where he faces charges of fraud and money laundering linked to the collapse of Kingfisher Airlines in 2012.
Although his last formal appeal against extradition was rejected in 2020, the court noted that the order “has still not been enforced”.
Judge Mann observed that “apparently Dr Mallya is still resisting extradition on other bases which have yet to be resolved”.
Mr Mallya remains on bail in the UK while an undisclosed legal matter, believed to be related to an asylum claim, is ongoing.
Mr Mallya denies the allegations he faces in India.
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