BANK LOANS TO LOW NET WORTH PERSONS: A PUNISHABLE OFFENCE (CONTD.)

In the recent Vijay Mallya bank loan default case, the accused nine officials of the government-owned financial service company, i.e. Industrial Development Bank of India (IDBI) and the now-defunct Kingfisher Airlines have been arrested by the CBI on 23^rd January 2017 and kept in judicial custody till 7^th February 2017. Upon their arrest, the CBI had filed a chargesheet against all the accused-arrested, except, Vijay Mallya, the promoter of Kingfisher Airlines, who is a wanted accused, stating that its special investigation team had found that there were many commissions and omissions on the part of IDBI officials while sanctioning and disbursing the loan of Rs 1,300 crore to Kingfisher Airlines. Moreover, about Rs 260 crore of the borrowed amount was diverted by Kingfisher Airlines; and Rs 263 crore was used to pay salaries, tax deducted at source, income tax and loan installments; while a portion of the loan amount was allegedly diverted by Vijay Mallya for his personal expenses.

The accused-arrested have filed bail applications in a special CBI Court. The hearing of the arguments on bail applications of all the accused-arrested has been scheduled to be held on 7^th February 2017. Whereas, as against Vijay Mallya, on 31^st January 2017, the CBI had filed an affidavit seeking his extradition from the United Kingdom (UK) by providing his precise address of the UK and thereupon, the Court had issued a non-bailable warrant against him.

In order to curb the situations where economic offenders like Vijay Mallya try to escape the reach of law, the Government has proposed, in the Union Budget 2017-18, to enact a law which will provide for the confiscation of property of such economic offenders until they submit to the court of law.

Daliparthy Harini

Legal Associate

The Indian Lawyer