State Bank Of India And Ors Vs Dr Vijay Mallya
Date Of Order:
July 11, 2022
UDAY UMESH LALIT; J., S. RAVINDRA BHAT, J., PAMIDIGHANTAM SRI NARASIMHA, J.
Petitioner: STATE BANK OF INDIA AND ORS.
Respondent: DR. VIJAY MALLYA
On July 11th, 2022, the Supreme Court sentenced Vijay Mallya to four months in prison for contempt of court, and ordered the Center to ensure that the fugitive businessman, who has been hiding out in the UK since 2016, to undergo the imprisonment.
1. Section 12 of Contempt of Court Act 1971
A simple sentence of up to six months' imprisonment, a fine up to two thousand rupees, or both are possible penalties for contempt of court:
Except as otherwise expressly provided by this Act or another law, a contempt of court may be punished by simple imprisonment for a term up to six months, a fine up to two thousand rupees, or both: As long as an apology is made to the court's satisfaction, the accused may be released or the punishment may be reduced.
2. Rule 6 (1) of Rules to Regulate Proceeding for Contempt of Supreme Court 1975
The person being charged must get notice in Form I. The charged party must, unless otherwise directed, attend personally before the court on the date set for the proceeding's hearing, and must stay present during the hearing until the case is completely resolved by order of the court.
According to the definition of the term "within Supreme Court jurisdiction" provided by the Supreme Court of India, if a petition is received from the jail or in any other criminal case where the accused is not represented, the court will appoint an advocate as an amicus curiae to represent the accused and state their case.
- The appell at was found guilty of committing contempt on two counts, which were:
- Guilty of defying the orders issued by the court by failing to provide all relevant information about the assets as instructed.
- Guilty of breaking the express restraint orders issued by the High Court of Karnataka in the same case that gave rise to the current proceedings.
- Further it was also noted that the respondant was required and duty bound to appear in person in answer to the notice issued by this Court in Contempt Petition in accordance with Rule 6 (1) of Rules to Regulate Proceeding for Contempt of Supreme Court of 1975. However, the respondant decided to submit a request for the orders granting notice to be recalled.
- The respondant was given the chance to submit his answer and early arguments on the suggested sentence, and as a result, the subject had been postponed until 10thJully 2017.
- However, the respondant had requested a review of the judgement and order from September 5, 2017, a request that was eventually denied by this Court in an order dated August 3, 2020.
- According to the aforementioned order, the respondant was required to appear before this court, and the Ministry of Home Affairs, Government of India, New Delhi, was tasked with making arrangements for and guaranteeing the appellant's attendance on the scheduled appearance date.
- In accordance with the Hon'ble Supreme Court's Order from August 31, 2020, the Government of India reopened its extradition case against the Government of the United Kingdom in order to request the appellants early extradition and make arrangements for his appearance before the Hon'ble Supreme Court on October 5, 2020.
- The UK side has stated that extradition of the respondant is pending the resolution of a different legal matter that is of a judicial and confidential nature. The UK side reiterated that they are unable to interfere with the process or provide any additional information.
- They additionally stated that the UK Home Office had been contacted through the designated method with a request to summon the respondant for his hearing before the Hon. Supreme Court. On September 17, 2020, the British Home Office delivered the Honorable Supreme Court's Order to the Hertfordshire Police, who then served it to the appellant.
Whether Vijay Mallya commited contempt of country by willful disobedience of court directions.
ARGUMENTS ADVANCED BY THE APPELLANT
- According to Mr. Jaideep Gupta, the respondent gave orders for three trusts, whose sole beneficiaries were the respondent's son and two daughters, to receive the amount of money that was given to Edmond de Rothschild (Suisse) M.A. By taking advantage of the identical act of contempt that has been held against the respondent, the aforementioned amount had been transferred against a court order.
- He therefore argued that by finding the aforementioned transactions to be void, the Hon'ble Court could provide the necessary guidance for their reversal.
- Mr. Jaideep Gupta added that the current contempt proceedings result from Banks' recovery actions. He added that the State Bank of India's counsel had claimed that judgments had been rendered against the respondent in the aforementioned recovery proceedings and that a recovery officer had been appointed to carry out the said judgement.
- The Hon'ble Court should, in his opinion, provide the aforementioned Recovery Officer the proper instructions so that he can track down any recipients of the cash and use them to carry out the ruling.
- Then he urged that proper orders should be made for the sequestration of the respondent's assets, both inside and outside of India, in the event that the said monies were to be judged insufficient to absolve the said contempt. To determine any assets that may be available to the respondent, assistance from the Banks and/or the Union of India should be sought; alternatively, a forensic auditor should be hired to carry out such an examination.
ARGUMENTS ADVANCED BY THE RESPONDENT
- Mr. Ankur Saigal argued that the respondant was made aware of all orders, including those dated 30th November 2021 and 10th Feburary 2022, and that the respondent and learned counsel spoke with one another. A copy of the communication dated 17 January 2022, which among other things notes the contemnor's solicitors' inability to offer any information about the kind of proceedings and the relief requested in the ongoing proceedings in the United Kingdom, has been put for our review.
ANALYSIS BY THE COURT
The Supreme Court noted on Monday that Vijay Mallya did not exhibit any remorse or offer an apology for his impudent behaviour when it sentenced the liquor tycoon to four months in prison in a 2017 contempt of court case for failing to disclose his assets and covertly transferring $40 million to his three children
A bench led by justice Uday U Lalit also ordered Mallya and his children to deposit $40 million with the recovery officer within four weeks, along with an annual interest rate of 8%. If they fail to do so, the court warned, authorities can use all necessary actions to reclaim the money. The debt collection tribunal in Bengaluru appointed the recovery officer after a group of creditors, led by State Bank of India, demanded repayment of the debts given to Mallya and his Kingfisher Airlines.
In conclusion although the Court postponed the sentence hearing a few times to give Mallya a chance to show up, it ultimately chose to proceed without him in light of his failure to do so.
As an amicus curiae in the case, senior attorney Jaideep Gupta will support the court during the in-person hearing.
Mallya did not express any regret for his actions, according to the court, and he did not appear before it during the penalty hearing.The Court then continued by saying that a sufficient punishment must be given to him in order to "uphold the majesty of law" and that orders must be issued in order to guarantee that the money in question is available for the execution of the judgments.
Hence, Mallya has been ordered by the court to pay $40,000,000 with 8% interest with the relevant recovery officer within 4 weeks, and otherwise, attachment procedures would be started against his properties.
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