Bombay HC Issues Notice to SBI, ED on Vijay Mallya's Plea Against Asset Recovery Order [Read Order]

Mumbai: The Bombay High Court has issued notice on a set of applications filed by Vijay Vittal Mallya challenging a 2019 order of the Special PMLA Court that permitted a consortium of banks led by the State Bank of India to utilise his confiscated assets towards debt recovery, after the matter came up for hearing for the first time following a directive to list all pending shelf matters.

Justice Milind N. Jadhav was hearing Criminal Application No. 148 of 2020, filed by Mallya, along with the connected Criminal Application No. 1186 of 2021 and Interim Application No. 197 of 2022, filed by Kamsco Industries Pvt Ltd, both directed against the State Bank of India and other respondents. The applications sought quashing of the order dated 31.12.2019 passed by the Special Judge for CBI at Mumbai in Miscellaneous Application No. 58 of 2019, arising out of ECIR No. ECIR/03/MEZO/2016 registered by the Enforcement Directorate.

Appearing for Mallya, Senior Advocate Amit Desai submitted that although the application had been filed six years earlier in relation to the seizure of the applicant's assets, subsequent developments and payments had rendered the impugned proceedings effectively redundant. He submitted that the application was filed at a stage when settlement discussions were being negotiated, that most of the assets identified and attached by the Enforcement Directorate had already been dealt with, and that the underlying commercial dispute required closure. He contended that the applicant's civil liabilities had effectively been settled, submitting that the consortium of banks had recovered approximately Rs.15,000 Crores from the applicant, as against the original claim of Rs.6203 odd Crores including interest, a submission the Court observed would need to be ascertained and confirmed by the respondents. Desai also submitted that reliance would be placed on the Reserve Bank of India's audit of the accounts of the applicant and his companies.

Noting that similarly placed applications were pending before it, and after hearing Desai's submissions on the recovery of assets in relation to the debt of the applicant's companies, the Court held it appropriate at this stage to issue notice only to Respondent No.1, the State Bank of India as the lead bank, and Respondent No.13, the Deputy Director, Directorate of Enforcement, “in order to apprise the Court about the aforesaid submissions made by Mr. Desai and further development in the aforesaid ECIR case.” Notice was made returnable on 09.09.2026, with the Court clarifying that it would decide on issuing notice to the remaining respondents only after hearing Respondent No.13.

The applicant was granted leave to file an additional affidavit placing on record developments that had taken place after the application was filed, to be served on the State Bank of India and the Deputy Director, Directorate of Enforcement, for their response.

In the connected Criminal Application No. 1186 of 2021, filed by Kamsco Industries Pvt Ltd, Desai informed the Court that he had not been served with the reply affidavit filed by the State Bank of India, and the Bank was directed to serve a copy on the applicant before the next date. 

The Court also permitted the Advocate for the State Bank of India to take copies of the court papers, on the ground that the Bank's own set of papers was missing. Both matters were directed to stand over to 9th September, 2026.

Appearances:

For the Applicant (Vijay Vittal Mallya): Mr. Amit Desai, Senior Advocate a/w Mr. Rashmin Jain, Advocates.

For the State: Ms. Rajeshree V. Newton, APP.

For the Applicant (Kamsco Industries Pvt Ltd): Mr. Amit Desai, Senior Advocate.

For the State: Mr. Sukanta A. Karmkar, APP.

Case Title: Vijay Vittal Mallya v. State Bank of India & Ors., Criminal Application No. 148 of 2020 with Criminal Application No. 1186 of 2021 with Interim Application No. 197 of 2022

[Read Order]