The Enforcement Directorate (ED) informed the Bombay High Court that the recovery of bank dues from Vijay Mallya does not nullify the ongoing legal proceedings under the Prevention of Money Laundering Act (PMLA). The agency’s stance was articulated through advocate Ashish Mehta, emphasising that the significant recovery achieved by a consortium of banks is separate from the allegations and charges of money laundering against Mallya.

The ED clarified that while the recovered amount may influence the computation of Mallya’s civil obligations, it cannot decide the validity of the offences alleged against him. Mallya’s absence from India and his lack of submission to the jurisdiction of Indian courts were noted as critical factors in the agency’s response against his plea for regulatory relief.

The ED maintained that his ongoing non-appearance is integral to the context of these legal proceedings, asserting the continued relevance of his actions regarding the case at hand.

Mallya’s Legal Argument Presented in Court

Mallya has sought to close a long-standing matter in the High Court, claiming that his civil liabilities concerning the recovery of debts have largely been settled. His legal team asserts that the State Bank of India-led consortium has recovered around Rs 15,000 crore, which overshadows an original claim of about Rs 6,203 crore, including interest. However, the ED contested this view, insisting that the nature of the dispute should not be categorised solely as a commercial one.

The agency expressed that Mallya’s assertion linking the bank’s recovery of dues to the continuation of criminal proceedings was misguided. The ED explained that the PMLA case revolves around accusations of scheduled offences and money laundering, which are independent of the lenders’ recovery efforts. They emphasised that the financial recoveries do not dissolve the legal charges Mallya faces.

Furthermore, the ED highlighted that while asset recovery and liability assessments may provide insight into the banks’ financial standings, they do not dispel the legal foundation of wrongdoing alleged under the PMLA.

Restoration of Assets Not a Defence Against Criminal Charges

The agency detailed that approximately Rs 14,131.60 crore in properties was restored to the SBI-led consortium due to decisions made by a special PMLA court in Mumbai. It contended that these asset restorations do not imply the end of the criminal case against Mallya, clarifying that the statutory mechanism intended for restitution does not answer the question of whether scheduled offences or money laundering have occurred.

In its submission, the ED asserted that the restoration of assets under the PMLA does not extinguish or invalidate pending legal actions regarding money laundering. The agency articulated that the ongoing criminal proceedings remain intact despite the financial recoveries achieved by the banks.

Vijay Mallya, who fled India in 2016, has been residing in the United Kingdom and was declared a fugitive economic offender in 2019. His ongoing legal challenges also involve questions regarding the constitutional validity of the Fugitive Economic Offenders Act, along with the processes that led to his designation as a fugitive. Recently, the High Court afforded Mallya one final opportunity to indicate whether he intends to return to India and engage with its judicial system.

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