Vijay Mallya and his beleaguered Kingfisher Airlines (KFA) may challenge the constitutional validity of the provisions of the “wilful defaulter” circular issued by the Reserve Bank of India, according to sources in the banking industry. The Kingfisher spokesperson did not comment.
Mallya and three more directors (AK Ganguly, Subhash R Gupte and R Nedungadi) of the airline were declared as wilful defaulters by Kolkata-based United Bank of India (UBI) last week.
The Bank has an approximate ₹350-crore exposure to KFA and has also filed a winding-up petition in the Karnataka High Court. However, sources say, instead of challenging the grievance redressal procedure of UBI, Mallya may challenge the validity of the guidelines, based on which the defaulter notice was served.
A total of 17 banks, with SBI as lead banker, have lent over ₹6,000 crore to the airline. According to UBI, so far, ₹35 crore was recovered from sale of shares carried out by SBI.
This apart, the consortium has taken possession of some of the mortgaged properties. Also, the court has access to ₹250 crore deposited by Kingfisher in a escrow account.