The Debt Recovery Tribunal (DRT) has ordered that the $75 million severance package payable to Vijay Mallya be frozen until the case against the industralist is disposed off.
The case will now be heard on March 28, 2016.
India's biggest lender State Bank of India (SBI) had moved the DRT seeking seizure of Mallya's passport and his arrest for not paying dues totalling about Rs 7,800 crore to state-owned banks, including about Rs 1,600 crore to SBI.
The industralist is facing a huge task of repaying the loans together with his group companies to his now-defunct Kingfisher Airlines (KFA), grounded since October 2012 by India's civil aviation regulator.
He also reportedly huge sums to KFA employees, besides to other government departments.
Vijay Mallya ED case - Court says Vijay Mallya cant withdraw money till the case is disposed off.
— ANI (@ANI_news) March 7, 2016
Vijay Mallya, who became a member of the Upper House (Rajya Sabha) in June 2010 with the support of the BJP and the JD(S), is in for more difficult times with the country's enforcement directorate (ED) filing a money laundering case against him.
The case under the Prevention of Money Laundering Act (PMLA) is over a Rs 900-crore loan obtained by him from a public sector bank, IDBI Bank, reports PTI, citing official sources. It is based on an earlier police complaint registered by the Central Bureau of Investigation (CBI) in the case.
"Mallya and others will soon be questioned. The agency has collected relevant documents from concerned authorities and the bank in question," ED sources said in Mumbai, PTI added.
Besides Mallya, who is chairman of now-defunct Kingfisher Airlines (KFA), the ED has filed charges against the company's CFO A Raghunathan and unknown officials of the bank for allegedly sanctioning the loan in violation of the norms regarding credit limits.
The news comes even as the Debt Recovery Tribunal (DRT) in Bengaluru is expected to pass an order on a plea filed by India's biggest lender, State Bank of India (SBI), seeking Mallya's arrest and seizure of his passport.
Mallya and his UB Group collectively owe about Rs 7,800 crore to Indian lenders, most of them public sector banks. SBI and another state-owned bank, Punjab National Bank, have a combined exposure of about Rs 3,200 crore.
Mallya had struck a $75 million deal with London-based Diageo to exit from Diageo-owned United Spirits last month.
Mallya was elected to the Rajya Sabha as an independent candiate with the support of the BJP and the JD(S) in 2010, along with Venkaiah Naidu and Ayanur Manjunath, reported NDTV.
Mallya, who owns IPL franchise Royal Challengers Bangalore (RCB), was busy tweeting posts on India's victory in the Asia Cup on March 6.
— Royal Challengers (@RCBTweets) March 6, 2016