Lekha G
The High Court in London on Tuesday upheld an application to amend the bankruptcy petition filed by an association of Indian banks led by the State Bank of India through favoring the waiver of their security over Vijay Mallya’s assets in India.
The Chief Insolvencies and Companies Court (ICC) Judge Michael Briggs passed the judgment in favor of the banks by proclaiming that there was no public policy that prevented a waiver of security rights as argued by Mallya’s lawyers.
The Judgment read, “I order that permission be given to amend the petition to read as follows: ‘The Petitioners (banks) having the right to enforce any security held are willing, in the event of a bankruptcy order being made, to give up any such security for the benefit of all the bankrupt’s creditors’”.
It further stated that, “There is nothing in the statutory provisions that prevent the Petitioners from giving up security”.
Mallya’s barrister, Philip Marshall referring to witness statements of retired Indian Judges had contended that there was, “Public interest under Indian Law” as they were nationalized banks.
However, Justice Briggs deferring to the argument ruled, “In my judgment the simple stance taken by Justice Gowda that Section 47 PIA 1920 is evidence of the ability of a secured creditor to relinquish the creditor’s security is to be preferred”.
The Indian banks, represented by law firm TLT LLP and barrister Marcia Shekerdemain, were also granted costs in totality for the petition hearings, as the “Overall successful” party in the case.
The Court has set July 26 as final hearing of the case, wherein Mallya was accused by the banks of trying to “Kick matters into the long grass” and further pleaded that the bankruptcy petition be permanently resolved.