On Monday, the Supreme Court sentenced fugitive businessman Vijay Mallya to four months in prison in a contempt of court case. Mallya, who has been in the UK since March 2016, was found in contempt of court on May 9, 2017, for failing to disclose his assets and moving $40 million to his children in violation of the Supreme Court’s order.
The Court stated today that Mallya showed no remorse for his actions and did not appear before it during the punishment hearing. The Court went on to say that an appropriate penalty must be inflicted on him in order to “uphold the majesty of law,” and that orders must be issued to ensure that the amount in question is accessible for execution of the orders.
As a result, the Court has ordered Mallya to deposit 40 million US dollars with the relevant recovery officer within four weeks, failing which attachment procedures against his properties will be commenced.
The Supreme Court bench of Justices UU Lalit, S Ravindra Bhat, and P S Narasimha reserved its decision on March 10, this year.
“We have said in the judgment of 2017 that the action of contemnor in disbursing USD 40 million was contempt. We must impose adequate sentence on the contemnor to uphold the majesty of law and the amounts in dispute are available for execution.”Justice UU Lalit
If the sum is not deposited, the recovery officer shall initiate proper collection processes, and the Government of India and its agencies shall give aid and full cooperation. Mallya’s illegal transfer of $40 million to recipients has been deemed “invalid and inoperative” by the top court.
“Considering the facts and circumstances on record and the facts that the contempt never showed any remorse nor tendered any apology for his conduct, we impose sentence of four months and fine in the sun of Rs. 2,000/- upon the contemnor. The fine shall be deposited in the Registry of this Court within four weeks and upon such deposit, the amount shall be made over to the Supreme Court Legal Services Committee. In case the amount of fine is not deposited within the time stipulated, the contemnor shall undergo further sentence of two months.”
Mallya is facing major fraud and money laundering accusations in connection with the amount borrowed by Kingfisher Airlines (KFA) from multiple Indian banks. He has been on bail in the United Kingdom since his arrest in April 2017.
On the basis of an Enforcement Directorate plea, he became the first person to be declared a fugitive economic offender in 2019. On April 20, 2020, the UK’s High Court of Justice denied his appeal against extradition to India.
Although the Court postponed the penalty hearing several times to allow Mallya to appear, it ultimately opted to proceed in his absence due to his refusal to appear.
The Supreme Court’s 2017 decision was based on a petition filed by a consortium of banks led by the State Bank of India (SBI), alleging that Mallya had illegally transferred USD 40 million earned from British corporation Diageo to his children in “flagrant breach” of several judicial rulings.
It was dealing with lending banks’ requests for contempt action and a directive to Mallya to deposit USD 40 million obtained from offshore corporation Diageo.
The Supreme Court ordered the Union Government to secure Mallya’s presence in order for him to serve his prison sentence.
On May 14, 2020, the UK High Court denied Mallya’s request to appeal to the UK Supreme Court. However, the Ministry of External Affairs informed India’s Supreme Court that his extradition has been delayed due to “secret proceedings” that have begun.
This is in light of rumours that the businessman is looking for political asylum, which could cause the extradition procedure to be delayed.
Case Title: State Bank of India and others vs Dr.Vijay Mallya