What the enforcement order in the Mallya asset case means to Indian banks
New Delhi, July 6: The Indian banks scored a major victory after a UK High Court judge issued an enforcement order permitting a consortium of 13 banks to recover funds owned to them by former liquor baron, Vijay Mallya.
The order is a major set back for Mallya who is battling an extradition request made by India, which is also in the process of having him being declared as a fugitive economic offender.
According to the order, the UK High Court Enforcement Officer would be permitted to enter Mallya's properties in Hertfordshire, near London. It permits the officer and his agents entry to Ladywalk and Bramble Lodge in Tewin, Welwyn, where Mallya is currently based. However, it is not an instruction to enter, which means the banks have the option to use the order as one of the means to recover estimated funds of around 1.145 billion pounds.
"The High Court Enforcement Officer, including any enforcement agents acting under his authority, may enter Ladywalk, Queen Hoo Lane, Tewin, Welwyn and Bramble Lodge, Queen Hoo Lane, Tewin, Welwyn, including all outbuildings of Ladywalk and Bramble Lodge to search for and take control of goods belonging to the First Defendant (Mallya)," notes the order by Justice Byran.
"The High Court Enforcement Officer, including any Enforcement Agent acting under his authority, may use reasonable force to enter the Property if necessary," the order also states.
Banks can count on this order while exercising all enforcement options available to them, should it be required.
The order relates to the UK's Tribunal Courts and Enforcement Act 2007 and follows a UK High Court ruling in May, which refused to overturn a worldwide order freezing Mallya's assets and upheld an Indian court's ruling that the Indian banks were entitled to recover funds. It marked the first recorded case of a judgment of the Debt Recovery Tribunal (DRT) in India being registered by the English High Court, setting a legal precedent.
The Consortium of banks include State Bank of India, Bank of Baroda, Corporation bank, Federal Bank Ltd, IDBI Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Punjab & Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank, United Bank of India and JM Financial Asset Reconstruction Co. Pvt Ltd.