Vijay Mallya's attached assets don't clear money-laundering charges: ED
What's the story
The Enforcement Directorate (ED) has told the Bombay High Court that recovery of assets worth ₹14,131.6 crore from businessman Vijay Mallya does not absolve him of pending money laundering charges. The ED made this submission in response to a court order directing it and the State Bank of India-led consortium to check if Mallya's attached properties had cleared his debts.
Legal argument
ED's affidavit on court directive
In an affidavit filed on September 8, the ED said movable and immovable properties worth ₹14,131.6 crore (as of August 2021) have been handed over to the SBI-led consortium.
However, it argued that this recovery does not cancel or lead to the dropping of money laundering charges against Mallya.
The agency contended that restoring assets under the Prevention of Money Laundering Act (PMLA) is a statutory mechanism for legitimate claimants to recover their losses.
Ongoing case
Mallya's petition challenging special court order
The court is hearing a criminal petition filed by Mallya in 2020, challenging a special court order allowing utilization of his attached properties for debt recovery.
Mallya is accused of money laundering and siphoning off at least ₹3,500 crore out of the total ₹9,000 crore bank loans granted to his defunct Kingfisher Airlines.
The ED had provisionally attached his properties in 2016.
Legal proceedings
Special court allowed banks to utilize Mallya's ED-attached properties
In 2019, a special court allowed SBI and other lender banks to utilize Mallya's ED-attached movable properties for debt recovery. Assets included United Breweries Holdings Ltd (UBHL) shares.
Mallya challenged this before the High Court in 2020.
His counsel, Senior Advocate Amit Desai, argued that the application challenging asset restoration had become redundant since civil liabilities were effectively settled and needed closure.
Agency response
What did the ED say?
However, the ED has called this submission misconceived. It explained that proceedings arise from allegations of scheduled offenses and money laundering under PMLA, which operate in a field distinct from recovery of civil dues by lending institutions.
The agency contended that while bank recovery amounts could be relevant for quantifying outstanding dues, they wouldn't determine whether the ingredients of a money laundering offense are made out.