Mallya’s ₹14,000Cr Asset Recovery Doesn't Wipe Out PMLA Charges, ED Tells Bombay HC

The central agency, in an affidavit filed on September 8, opposed a 2020 petition by Mallya seeking closure of the criminal cases lodged against him. Mallya had contended that his dispute with the banks stood settled after the lenders recovered their dues.

ED's submissions

The ED said in its affidavit that movable and immovable properties worth Rs 14,131.6 crore had been handed over to the SBI-led consortium of lenders, but that this did not cancel or lead to the dropping of the money laundering charges against Mallya.

The agency stated: "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."

It further said that restoration of assets under the Prevention of Money Laundering Act (PMLA) was a statutory mechanism intended for legitimate claimants to recover their losses, and that this process was separate from the criminal proceedings related to the alleged scheduled offences and money laundering under the Act.

On Mallya's continued absence from India, the ED said he left the country in March 2016 and did not appear before the investigating authority despite repeated summons, following which a non-bailable warrant was issued against him. He was declared a proclaimed offender in November 2016. The agency added that despite queries from the High Court on whether he intended to return to India and submit himself to the jurisdiction of the competent criminal court, Mallya had remained elusive in his replies. "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 agency said.

Mallya is accused of laundering and misappropriating at least Rs 3,500 crore out of loans of around Rs 9,000 crore extended by banks to his now-defunct Kingfisher Airlines. The ED had provisionally attached his properties in 2016, and in 2019 a special court permitted the SBI-led consortium to use the attached movable assets, including shares in United Breweries Holdings Ltd, for recovery of dues.

Mallya's response

Mallya responded to the ED's affidavit through a series of posts on social media. Citing what he described as the agency's own affidavit, he wrote: "Affidavit filed by the ED in the Hon'ble Bombay High Court. Para 7 is the decreed debt and Para 17 shows recovered Rs 14,131.60 crore in 2021!! 5 years on I am still referred to as a fraud who cheated the Banks."

He went on to argue that the amount recovered should settle the matter in his favour, posting a table he claimed showed the statement of account of recovery, and asked: "To all who believe in fair and proper accounting justice please see the following table. Do I still deserve the way I am berated by the media and referred to as a fraudster at the very outset of a journalist's script? Why not start asking when I will get my refund."

He also maintained that his absence from India was not by choice, saying he was "legally prohibited from leaving UK" and describing the Indian government's stance towards him as "grossly unjust." Responding to the mixed reaction to his posts, Mallya wrote: "Thank you all for your mixed replies to my tweets. Love and hate go hand in hand and I respectfully accept that whilst humbly accepting your opinions."

Background

Mallya has been in the United Kingdom since leaving India in 2016 and was declared a fugitive economic offender in 2019. His legal battle in India also includes a separate challenge to the constitutional validity of the Fugitive Economic Offenders Act and to the proceedings that declared him a fugitive under it. The Bombay High Court has previously given Mallya an opportunity to clarify whether he intends to return to India and submit to its jurisdiction. The matter is expected to be taken up further as the Court examines the ED's stand along with the status of the pending proceedings against him.