India: Supreme Court dismisses United Breweries India's appeal

The Supreme Court on October 26 dismissed an appeal filed by United Breweries India Limited (UBIL) challenging a Karnataka High Court order directing the Vijay Mallya-promoted company’s liquidation proceedings to clear the dues of over Rs 15,000 crore to the consortium of banks led by the SBI, the Telegraph India reported.

A bench headed by Justice U. U. Lalit refused to interfere with the high court order though senior advocate C.S. Vaidyanathan appearing for UBIL argued that the impugned order was erroneous as he claimed that the company had total assets the tune of Rs 14,500 crore against the Rs 6,000 crore-odd debts owed to the various creditors, including banks.

He further argued that the total dues to the banks was only Rs 900 crore as such even after clearing the debts of the banks and other creditors, the company had enough surplus funds to continue in business.

“Winding up should be the last resort, which should not be readily accepted,” the senior counsel argued before the bench which also included justices Vineet Saran and Ravindra Bhat.Senior advocate Mukul Rohatgi appearing for the consortium of banks however, disputed UBIL arguments.

He submitted that the defaulting company owed Rs 15,000 crore to the banks alone. Of these the banks had been so far able to recover only Rs 3,595 crore. More than Rs 11,000 crore are still due from the company, Rohatgi said.

The bench after hearing the arguments said it found no reason to interfere with the orders passed by the high court and accordingly dismissed it.The Debt Recovery Tribunal (DRT) had earlier in 2017 passed attachment orders against the UBIL which was subsequently upheld by the Karnataka High Court in March this year; aggrieved by which the company has moved the apex court.

Many of the company’s assets are already under attachment by the Enforcement Directorate for violation of the PMLA (Prevention of Money Laundering Act) 2002.

The allegations against the UBIL which is the parent company of the now defunct Kingfisher Airlines that it stood guarantee for the huge loans availed by the latter which turned bankrupt, resulting in Rs 15,000-crore dues.

26 October, 2020