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Massive win for India, UK court orders extradition of Vijay Mallya to India

In what may appear to be a big win for the NDA government, the United Kingdom court today ordered the extradition of Vijay Mallya. Mallya’s extradition notice will now be sent to UK Home Secretary. Vijay Mallya now has 14 days to appeal against the order.

Mallya faces a case of loan default to the tune of Rs 9,000 crore besides allegations of money laundering and diversion of loan funds for purposes other than they were meant for. He was in self-imposed exile in London. He left for the United Kingdom in March 2016 taking advantage of the the dilution in the CBI lookout notice against him.
Mallya was arrested twice and bailed out in London in extradition and money-laundering cases filed by the CBI and the Enforcement Directorate (ED) which has accused him of conspiring to defraud banks through a Rs 9,100 crore loan to Kingfisher Airlines Ltd., a premium airline he founded in 2005 and shut down seven years later. He owes Rs 6,203 crore to 12 banks and the ED has attached his properties worth Rs 8,000 crore. Indian banks got Mallya’s asset frozen through a UK court last year. The asset freeze order had forced Mallya to live on 5,000 pounds a week, but his allowance was increased to roughly 20,000 pounds a week this year.

Mallya had contested his extradition on the grounds that the case against him is “politically motivated” and the loans he has been accused of defrauding on were sought to keep his now-defunct airline afloat. “I did not borrow a single rupee. The borrower was Kingfisher Airlines. Money was lost due to a genuine and sad business failure. Being held as guarantor is not fraud,” he said in his recent Twitter post on the issue. “I have offered to repay 100 per cent of the principal amount to them. Please take it,” the flamboyant businessman tweeted earlier. While dismissing that his intervention has anything to do with the extradition case, it came just days before Judge Emma Arbuthnot is expected to present her ruling in the case. The trial, which opened at the Magistrates’ Court on December 4 last year, has gone through a series of hearings beyond the initial seven days earmarked for it.

It opened with the Crown Prosecution Service (CPS) team, led by Mark Summers, laying out the Indian government’s prima facie case of fraud and money laundering against Mallya. Summers sought to establish a “blueprint of dishonesty” against the businessman and that there are no bars to his extradition on human rights grounds.
Mallya’s defence team, led by Clare Montgomery, deposed a series of experts in an attempt to prove that the erstwhile Kingfisher Airlines’ alleged default of bank loans was the result of business failure rather than “dishonest” and “fraudulent” activity by its owner. The court was also told that a consortium of Indian banks, led by the State Bank of India (SBI), rejected an offer by the liquor baron in early 2016 to pay back nearly 80 per cent of the principal loan amount owed to them.

While the CPS argued that Mallya never intended to repay the loans he sought in the first place because his airline’s demise was inevitable, the defence tried to establish that Kingfisher Airlines was suffering from consequences of a wider global financial crisis around 2009-2010 and that its failure was a result of factors beyond the company’s control. “There are clear signs that the banks seem to have gone against their own guidelines [in sanctioning some of the loans],” the judge had noted during the course of the trial
In relation to the defence’s attempts to dispute Indian prison conditions as a bar to Mallya’s extradition on human rights grounds, the judge had indicated to the CPS that she did not require any further information in reference to the prison conditions awaiting Mallya at Barrack 12 of Mumbai’s Arthur Road Jail after seeking a video of the cell.
Mallya will be lodged in one of the high security barracks located in a two-storey building inside the prison complex, which also housed 26/11 Mumbai attack terrorist Mohammad Ajmal Kasab. A high security cell has been kept ready at the jail located in central Mumbai.
Last week, Mallya pleaded with Supreme Court to stay the Enforcement Directorate initiated proceedings to declare him a ‘fugitive economic offender’. Mallya got partial success as a bench of Chief Justice Ranjan Gogoi and Justice Sanjay K Kaul, after hearing his counsel Fali S Nariman, agreed to entertain his appeal against a Bombay high court order refusing him relief but said “there will no stay on the proceedings”.
Mallya sought to draw the court’s attention to provisions of the Fugitive Economic Offenders Act, which allowed the government to confiscate his properties even as they have already been attached by the ED under the Prevention of Money Laundering Act. Nariman said when properties attached under PMLA were auctioned, debtors would have a claim on the money so raised. However, under the FEO Act, debtors would have no claim over sale proceeds of the attached properties as the entire money went to the government.


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