Supreme Court Sentences Vijay Mallya To 4 Months In Jail In Contempt Case

The Supreme Court on Monday sentenced fugitive economic offender Vijay Mallya to four months in jail in a contempt of court case for not honestly disclosing his assets and secretly transferring $40 million to his family members. Mallya will undergo the jail term as and when he is brought back to India.

A bench, headed by Justice Uday U Lalit, also directed Mallya to deposit $40 million with the court within four weeks, along with an interest of 8% per annum, failing which the court said attachment proceedings shall begin.

The bench, also comprising justices S Ravindra Bhat and PS Narasimha, emphasised that Mallya did not show remorse at any stage of the proceedings and that it is necessary to impose adequate punishment to uphold the majesty of the law.

Mallya was held guilty of contempt of court by an order in May 2017 for wilful disobedience of its order to come clean on all his assets and not disclosing $40 million he had received from British liquor major Diageo Plc following his resignation as Chairman of United Spirits Limited in February 2016. The money Mallya received from Diageo was transferred to his three children and estranged wife. The Contempt of Courts Act, 1971, prescribes a maximum punishment of imprisonment for six months.

Mallya, who fled to the UK in 2016 following the charges of bank loan default to the tune of over ₹9,000 crore associated with the collapse of his Kingfisher Airlines in 2012, is an NRI while his children and estranged wife are US citizens. He denies “fleeing” from India and says he made an “unconditional” offer to pay back the sum in full.

Mallya faces a raft of charges relating to financial irregularities at Kingfisher Airlines. He is also being investigated by the Central Bureau of Investigation and the Enforcement Directorate for alleged financial crimes.

The 2017 verdict had come on a plea by a consortium of creditors led by State Bank of India, which argued that Mallya disobeyed court orders by making “vague and unclear disclosure of his assets” and by transferring a $40 million payment from Diageo to his family members. Mallya’s plea to reconsider the conviction under the contempt charge was also dismissed by the apex court in August 2020.

Following the conviction, the top court directed Mallya’s presence to proceed with the contempt case and deliver the punishment. However, Mallya remained elusive and the matter was adjourned several times owing to his unavailability.

The Union government informed the court last year that “confidential” proceedings of an undisclosed nature were stalling the liquor baron’s extradition from the UK. At the same time, solicitor general Tushar Mehta and advocate Rajat Nair, appearing for the Centre, pressed for exemplary punishment for Mallya for his wilful non-participation before the Supreme Court.

Senior advocate Jaideep Gupta, who was appointed in November 2021 as amicus curiae to assist the court, suggested that the matter should proceed as Mallya has sufficient knowledge about the contempt proceeding.

Mallya’s lawyers in India told the Supreme Court earlier this year that the fugitive businessman has intimated them about the secret proceeding initiated by him with the UK government against a 2019 order by a London court to extradite him. The lawyers also submitted that they did not have any further instructions from Mallya on the merits of the contempt case.

At this, the bench noted that Mallya’s letter disclosed that he was aware of the proceedings before the Supreme Court and therefore, the matter could be taken to a logical conclusion. Following all the submissions, the court reserved its judgment on the quantum of punishment.