Kingfisher Airlines (KFA) plea against United Bank of India (UBI), which declared the company as "willful defaulters," got rejected by Kolkata High Court.
In May, Kolkata-based UBI sent a willful defaulter notice on KFA including its board members. The KFA chairman Vijay Mallya, along with board members, was called before the panel on 27 June, which was later re-scheduled to 9 July.
The grounded airline submitted their plea before Justice Dipankar Dutta to withdraw the notice by UBI and to allow them a personal hearing along with legal representative on the issue, reports the Mint. But the plea got rejected and the company was asked for recovery proceedings.
"Justice Dipankar Dutta has given a positive judgment and bank's concerns have been rightly addressed," UBI executive director Deepak Narang told the Economic Times. "The judgment will be a guiding principle for the entire banking industry in the time to come."
It was not the first time when KFA's plea got dismissed by a High Court. The Karnataka HC turned down a petition filed by the airline in December last year of a consortium of its lenders to take possession of Kingfisher House property.
Even in April 2013, Bombay HC dismissed petition filed by United Breweries Holdings to grant interim relief to Kingfisher Airlines' lenders from selling pledged shares of UB group companies. This company markets beer under Kingfisher brand and is headquartered in Bangalore, Karnataka.
The debt-ridden airline owes around ₹6,400 crore to a consortium of lenders led by State Bank of India, including payment of dues to UBI of nearly ₹350 crore.
In December last year and January this year, SBI and a UK-based aviation service firm, Aerotron, filed petitions on KFA claiming due of ₹6,203 crore and ₹37 crore, reports the Financial Express.
The eight-year-old airline had shut down its operations on 20 October 2012 as the Directorate General of Civil Aviation (DGCA) suspended its flight certificate.
In February 2012, it received a notice from Airports Authority of India regarding dues of ₹2551 million. Since the last six months, it was operating on a cash-and-carry basis.