Fugitive businessman Vijay Mallya, facing charges of fraud and money laundering related to the collapse of Kingfisher Airlines, has argued before the Karnataka High Court that banks should not be permitted to charge interest on recovered amounts. Mallya, who has been residing in the UK since fleeing India in 2016, is seeking detailed account statements from a consortium of 10 banks, contending that they have already recovered the principal debt and, therefore, should not be allowed to levy further interest on the recovered sum.
Senior advocate Sajan Poovayya, representing Mallya, submitted to Justice Lalitha Kanneganti that the banks have "already received the money due" and cannot maintain that recoveries are not final due to pending proceedings. Poovayya argued that once the banks have access to the funds, the "interest meter should stop ticking". He highlighted what he claims are discrepancies in the banks' accounting, stating, "Bank is using the money, my interest meter should stop ticking".
Mallya's petition seeks a comprehensive statement of accounts, adjusting for all recoveries made from him over time. He claims that the total recoveries far exceed the original debt. Poovayya referenced a Debt Recovery Tribunal (DRT) order, which mandated the recovery of ₹6,203 crore (approximately $744 million USD) with an additional 11.5% annual interest. He pointed to a press release from the Enforcement Directorate (ED) dated July 16, 2021, stating that ₹7,181 crore (approximately $861 million USD) had already been recovered. Further, he argued that recovery proceedings had yielded ₹10,040 crore (approximately $1.2 billion USD).
Mallya's legal team contends that the banks have recovered ₹14,131.6 crore (approximately $1.7 billion USD) – more than double the amount awarded by the DRT in 2017. This figure, Mallya argues, is based on the Finance Ministry’s Annual Report for 2024–25, which documents the ED’s actions against wilful defaulters. Mallya has used this information in his UK bankruptcy annulment application, which he recently discontinued.
The banks, however, have objected, stating that the money has not yet been fully received and that amounts are still due. They argue that the pendency of legal proceedings prevents the recoveries from being considered final. Advocate Krutika Raghavan, representing the official liquidator, suggested that Mallya should seek the requested disclosures from the company court. She noted that Mallya had not furnished information to the liquidator or attempted to revive Kingfisher Airlines, questioning the timing of his petition.
The case has a complex history, with Mallya facing extradition requests from India and a bankruptcy order in the UK. Indian banks won a court appeal in London upholding the bankruptcy order against Mallya. Mallya has been fighting this order, arguing that the debt has already been recovered in India. He remains on bail in the UK while a confidential legal matter, believed to be related to an asylum application, is resolved.
The High Court has adjourned the hearing on Mallya's petition until February 19. The outcome of the case could have significant implications for the recovery of debts from defaulters and the application of interest on recovered assets. Mallya's public appearance on Raj Shamani's podcast in June 2025, where he defended himself and claimed to have repaid a substantial portion of the loans, has also added another layer of complexity to the ongoing legal battles.
