Vijay Mallya arrest and bail: Why bankers should not rejoice yet!
Bankers among the 17 consortium of lenders to Mallya-owned now defunct Kingfisher Airlines are happy that he was undergoing the legal trial in the United Kingdom where is escaped last year in March to avoid being arrested in India.
While the entire Indian media flashed the breaking news of Indian businessman Vijay Mallya’s arrest and subsequent bail after only three hours in London on Tuesday, bankers will still have to cross many hurdles before they can get their dues back.
Bankers among the 17 consortium of lenders to Mallya-owned now defunct Kingfisher Airlines are happy that he was undergoing the much-awaited legal trial in the United Kingdom.
Mallya fled to the UK in March last year to avoid getting arrested in India.
The liquor baron Mallya owes banks and Service Tax Department a total of about Rs 9,000 crore including the principal loan amount, interest and penalties.
However, it might be too early to cheer as there are many stages which an extradition request needs to pass through before an individual resident of the UK is handed over to India.
According to experts, the legal system and human rights laws in Britain have been notorious for providing refuge to many fleeing political and religious persecutions from their countries.
"Even if Mallya loses the case there, he will not be extradited to India tomorrow or in the next few weeks. Clearly, he will challenge the extradition in UK courts. Also, India is in the category of countries which is subject to more judicial scrutiny in the treaty with UK. Further, Mallya is not a terrorist or he hasn’t done any criminal act but is accused in a white-collar crime. Hence, he definitely will challenge it there to slow down the process," said Kumar Saurabh Singh, a partner with legal firm Khaitan & Company.
Singh adds that even as terrorism cases have led to successful extradition of the party concerned, not many white-collar cases have seen success in the last 15 years.
Recalling a case, another legal expert said, "There was a banking sector litigation case of Mardia Chemicals in the early 2000s and at that point of time it was one of the biggest NPA (non-performing asset) cases. In 2010, after about 8-10 years it was settled for a pittance."
Many high-profile Indians have moved their base to the UK after being wanted in India. Previously, Lalit Modi for alleged financial offences, Ravi Sankaran in an Indian Navy war room leak case, Nadeem Saifi in the Gulshan Kumar murder case and Tiger Hanif in the Gujarat blasts case have been wanted by Indian government authorities.
An extradition request from India needs decisions by the home secretary as well as several courts.
Tiger Hanif had lost the case in 2013 and is still awaiting approvals from the UK government.
Apart from those approvals, one can also approach the European Court of Human Rights.This will also test the Indian government’s acumen and efforts to book him. Moreover, this will set an example and may put pressure on Mallya to come forward for some settlement with banks as it may be an unfavourable process maybe 2-3 years down the line, according to few legal experts.