Vijay Mallya withdraws UK bankruptcy annulment plea; but why?

Vijay Mallya , the fugitive businessman wanted in India on charges of fraud and money laundering, has withdrawn his application to annul a UK bankruptcy order, ahead of a scheduled hearing in London on Monday.

According to Press Trust of India (PTI), the move effectively allows the 'Trustee in Bankruptcy' to continue pursuing Mallya’s assets to help a consortium of Indian banks, led by the State Bank of India ( SBI ), recover around USD 1.05 billion owed by the now-defunct Kingfisher Airlines .

A High Court hearing set to decide directions for the annulment case was vacated after Mallya’s legal team filed a notice of discontinuance last week. “Vijay Mallya’s Trustee in Bankruptcy will be able to continue their work in investigating and realising assets falling within his bankruptcy estate without any hindrance that this application might have caused,” UK-based law firm TLT LLP, representing the banks, said in a statement quoted by PTI.

The development follows High Court Judge Anthony Mann’s ruling in April this year, upholding the bankruptcy order originally issued over four years ago. “The bottom line is that the bankruptcy order stands,” Justice Mann had stated in his judgment.

Mallya’s legal representatives, Zaiwalla & Co., had earlier filed for annulment on the grounds that the banks’ dues had already been recovered in India. However, the plea was reportedly discontinued as a related writ petition in India, seeking details of recoveries made by the banks, has not moved forward.

Legal experts told PTI that proceedings in India play a critical role in determining the outcome of any annulment application before the English courts. There is also a possibility that Mallya could file a fresh annulment plea at a later stage.

The case traces back to 2017, when a consortium of banks led by SBI registered the Indian Debt Recovery Tribunal’s (DRT) judgment in the UK courts. The judgment pertained to personal guarantees given by Mallya against loans extended to Kingfisher Airlines. Following this, the banks secured a worldwide freezing order in May 2018 and served a bankruptcy petition on Mallya later that year. After a series of hearings, a bankruptcy order was issued against him on July 26, 2021.

Separately, in connection with India’s extradition request, Mallya continues to remain on bail in the UK while a “confidential” legal matter — believed to be linked to an asylum application, remains pending.

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