The Enforcement Directorate (ED) has told the Bombay High Court that recovery of bank dues from fugitive businessman Vijay Mallya does not absolve him of the money laundering charges against him.
In an affidavit filed on September 8, the agency opposed Mallya's 2020 petition seeking the closure of criminal proceedings against him. Mallya had argued that his dispute with the banks had been settled after lenders recovered substantial amounts from his assets.
The ED said movable and immovable properties worth ₹14,131.6 crore had been handed over to the State Bank of India-led consortium of lenders. However, the agency maintained that the recovery of these assets does not cancel or bring an end to the money laundering proceedings against Mallya.
According to the agency, asset restoration under the Prevention of Money Laundering Act (PMLA) is a statutory mechanism intended to provide restitution to legitimate claimants. It does not determine whether the alleged scheduled offences or money laundering were committed.
The ED further argued that recovery of bank dues and criminal proceedings are separate matters. The amount recovered by lenders may be relevant to determining outstanding liabilities, but it cannot by itself decide whether the alleged offences have been established.
ED says Mallya continues to evade legal process
The agency also told the court that Mallya continues to evade the legal process in India.
Mallya left India in March 2016 and, according to the ED, did not appear before investigators despite repeated summons. A non-bailable warrant was subsequently issued against him, and he was declared a proclaimed offender in November 2016.
The ED said Mallya has not returned to India or submitted himself to the jurisdiction of the competent criminal court. It also pointed out that despite questions from the Bombay High Court about whether he would return and face proceedings, he remained elusive in his responses.
Mallya case linked to Kingfisher Airlines loans
Mallya is accused of money laundering and misappropriation of at least ₹3,500 crore from loans of around ₹9,000 crore extended to his now-defunct Kingfisher Airlines.
The ED had provisionally attached properties linked to Mallya in 2016. In 2019, a special court allowed the SBI-led consortium and other lenders to use attached movable assets for recovery of their dues. These assets included shares held through United Breweries Holdings Ltd.
The ED has maintained that the subsequent recovery of assets cannot make the criminal prosecution under the PMLA redundant.
The latest submission came as the Bombay High Court considers Mallya's plea seeking closure of the criminal cases against him. The ED's position is that repayment or recovery of bank dues does not erase alleged criminal liability, leaving the money laundering proceedings intact.
