Banks must ensure that no defaulter gets away: Jaitley

RSTV Bureau
Supreme Court has taken a tough stand against big and willful loan defaulters like Vijay Mallya, owner of now defunct Kingfisher Airlines.

Supreme Court has taken a tough stand against big and willful loan defaulters like Vijay Mallya, owner of now defunct Kingfisher Airlines.

In an indirect reference to Vijay Mallya, Finance Minister Arun Jaitley on Wednesday said it was responsibility of banks to ensure no defaulter manages to get away.

Jaitley’s comments came after a special court in Mumbai on Monday ordered the arrest of Mallya, after government suspended his passport to return to India and make him repay dues.

“You have investigative agencies looking into criminal law matters (and) you have banks looking into settlement matters. I think both are extremely competent institutions who can act strictly within the parameters of law,” said Jaitley in his conversation with media in US.

“As far as the banks are concerned, it’s their responsibility based on commercial considerations to make sure that no defaulter manages to get away,” Jaitley said. “Merely by escaping the geographical boundaries of India you don’t run away from the liabilities that you owe to the public system.”

The Supreme Court has asked Mallya to declare all his assets by April 21 after a group of lenders turned down his proposal to repay as much as USD 900 million.

Banks want entire amount due, including interest to be paid back.

Mallya has previously termed shutting down of Kingfisher Airlines as an “unfortunate commercial failure” due to macroeconomic factors and government policies. He said he did not flee the country and was not an “absconder.”

“They (investigating agencies and banks) are sending a very strong signal that public debts owed to commercial banks, you can’t just run away from liability if you have responsibility to pay and banks will ensure that banks are reimbursed,” Jaitley added.

Jaitley spoke at the United Nations special session earlier in the day on drug trafficking. Last week he had also participated in the spring meetings of the International Monetary Fund and the World Bank in Washington and had held meetings with investors in the city.

Liquor Barron Vijay Mallya left India after Banks moved to recover Rs 9,000 crore that his collapsed Kingfisher Airlines owed them.

Meanwhile, A Hyderabad court convicted Mallya in a check-bouncing case on Wednesday in a case filed by GMR Hyderabad International Airport Ltd on Wednesday. However it did not pronounce the quantum of punishment as  Vijay Mallya was not in the country.

“The sentence has not been pronounced…only conviction has been recorded. Since no accused have appeared before the court, only conviction has been recorded,” said Advocate Sudhakar Rao.

The quantum of punishment is expected to be pronounced on May 5.  Two cases pertaining to cheque-bouncing were going on  against Kingfisher Airlines in the court and the matter was dealt under section 138 of Negotiable Instruments Act which provides for punishment for bouncing of checks.