A UK judge allows the fugitive Indian to take £22,500 (Rs 22.5 lakh) a month from the money held in the court funds office to enjoy a lifestyle in Britain
There is good news and there is a piece of bad news for the fugitive Indian liquor baron Vijay Mallya. The good news is that a UK judge has permitted him to take £22,500 (Rs 22.5 lakh approx.) a month from the money held in the court funds office to enjoy his lavish lifestyle in Britain. And the bad news is that the same judge denied him money from the same fund to pay for his legal battles in India.
The Insolvency and Companies Court (ICC) of the London High Court has £2.9 million (Rs 29 crore approx.) from a cash pot since October last year following the sale of Mallya's Le Grand Jardin mansion at Cannes in France. The £2.87 million fund arose from the €3.288 million sale of Mallya's French property.
The Deputy ICC Judge Barnett on 8 February 2021 allowed Mallya access to about £1.2 million from the cash pot. This includes £121,000 towards his £22,500 per month living expenses for the next six months, £786,000 for his incurred costs and £288,000 for future legal costs in respect of defending the bankruptcy petition.
A consortium of 13 Indian banks to whom Mallya owes £1.05 billion (Rs 10,507 crore) has applied to make Mallya bankrupt in the ICC of the London High Court.
The ICC's largess came despite the banks' expressing concerns that Mallya was draining assets in the court's control. The Indian banks, represented by TLT LLP suggested that Mallya should instead sell two yachts and two cars he owns to fund his lifestyle and legal expenses. It was also pointed out in the court that Mallya was owed almost £1.5 million by various Mallya family trusts.
Tony Beswetherick, representing the banks, alleged that Mallya had not been transparent about his assets and whether there were other sources from which he could fund payments. Philip Marshall, representing Mallya, said the sale of luxury items such as boats are unlikely to be realised efficiently in the middle of a pandemic and the trusts are not in a position to repay the loans to Mallya as their underlying assets are subject to attachments in India.
The Deputy ICC Judge denied Mallya approval to use the cash pot to pay £556,000 (Rs 5.6 crore) in legal fees that he owes to two law firms in India and a senior member of the Indian bar, and cover future legal costs in India of £203,000 (Rs 2 crore).
Mallya was seeking the cash to fund legal fees for his settlement proposal in the Supreme Court of India. Mallya has challenged in SC the 11.5 per cent rate of interest levied by the banks on the principal debt of Rs 6,203 crore besides challenging the attachment orders obtained by the Indian government under the Fugitive Economic Offenders Act.
Deputy Judge Barnett also denied Mallya permission to use the cash pot to make a final payment of £128,000 that he owes to London law firm Boutique Law for representing him in the extradition proceedings that he lost.
The court had previously released £83,000 to enable Mallya to pay the legal cost of the Crown Prosecution Service in those proceedings to avoid going to prison over default of paying the legal cost.
Mallya continues to live in the UK despite losing the legal battle over his extradition to India in April 2020 as he has applied with the UK Home Secretary for Status, which may mean he would continue to stay in the UK if his application is approved.