LONDON: A London court has refused to release more than £758,000 (Rs 7.8 crore) from the court funds office to liquor baron Vijay Mallya to enable him to pay his legal fees in India.
Justice Miles, in the Chancery Appeals division of the London high court, dismissed on Wednesday the 65-year-old’s appeal against a lower court decision on February 8 not to release cash to pay for his Indian litigation out of the Rs 29 crore deposited in the court following the €3.2 million sales of his property Le Grand Jardin in Cannes, France.
The judge said there was no breakdown and no invoices in support of the amounts being sought. “The banks have repeatedly asked for this information and Mallya has had numerous opportunities to provide it. Mallya has not provided any details of steps that might be taken in the Indian proceedings in the foreseeable future that might have a bearing on the bankruptcy petition,” the judge said.
Mallya’s lawyer, Philip Marshal, had argued that the Indian lawyers would not continue to work unless paid. He said the cases in India were closely connected to the bankruptcy petition and if Mallya was successful in India he would potentially have defences to the bankruptcy proceedings in the UK. A consortium of state-owned Indian banks to whom Mallya owes £1 billion (Rs 10,800 crore), as of June 2020, are seeking to make Mallya bankrupt in Britain.
The court heard that Mallya was seeking £554,000 (Rs 5.7 crore) to pay historic legal costs to Mumbai law firm Bachubhai Munim & Co and senior counsel Amit Desai, a further £1,000 (Rs 1 lakh) to pay another Indian law firm and £203,000 (Rs 2 crore) for his estimated future legal fees in various court cases in India.
The judge said paying the Indian lawyers would mean “preferring Indian lawyers as creditors in event of Mallya being made bankrupt” whereas any proposed expenditure should be “for the benefit of the creditors as a whole”.
Marshall had provided a letter from Bachubhai Munim & Co dated February 26, 2021, proposing a method in which their costs could be checked and disputed by the banks that involved an Indian judge acting as costs expert.
Justice Miles said the letter was “not satisfactory as it would involve putting the Indian legal costs into the hands of an Indian expert over which the UK court would have no control” and that it was an “inappropriate attempt to include material to bolster an application which lacked evidential basis when made”.
The bankruptcy case had initially been adjourned for six months to give time for the cases in India to proceed and for Mallya to settle his debt. Now a hearing will take place on July 26 when a judge will decide whether to make an immediate bankruptcy order against the beleaguered businessman.
“The pandemic in India has had a serious impact on the progress of cases through the Indian courts and there is no material which would enable the court to conclude that any steps that might be taken in Indian hearings between now and July 2021 would have any material bearing on the bankruptcy petition. Most of the amounts being sought are historical sums,” Miles said, pointing out the Indian lawyers “were prepared to do work they did without validation”.
Mallya was ordered to pay 95% of the bank’s costs in this case. Marshall indicated he would take the matter to the court of appeal. However, Miles did allow Mallya’s appeal against a costs order in the February 8 hearing. Mallya had been ordered to pay 50% of the banks’ costs and Miles ruled that instead, it should be the costs in the case.
Justice Miles, in the Chancery Appeals division of the London high court, dismissed on Wednesday the 65-year-old’s appeal against a lower court decision on February 8 not to release cash to pay for his Indian litigation out of the Rs 29 crore deposited in the court following the €3.2 million sales of his property Le Grand Jardin in Cannes, France.
The judge said there was no breakdown and no invoices in support of the amounts being sought. “The banks have repeatedly asked for this information and Mallya has had numerous opportunities to provide it. Mallya has not provided any details of steps that might be taken in the Indian proceedings in the foreseeable future that might have a bearing on the bankruptcy petition,” the judge said.
Mallya’s lawyer, Philip Marshal, had argued that the Indian lawyers would not continue to work unless paid. He said the cases in India were closely connected to the bankruptcy petition and if Mallya was successful in India he would potentially have defences to the bankruptcy proceedings in the UK. A consortium of state-owned Indian banks to whom Mallya owes £1 billion (Rs 10,800 crore), as of June 2020, are seeking to make Mallya bankrupt in Britain.
The court heard that Mallya was seeking £554,000 (Rs 5.7 crore) to pay historic legal costs to Mumbai law firm Bachubhai Munim & Co and senior counsel Amit Desai, a further £1,000 (Rs 1 lakh) to pay another Indian law firm and £203,000 (Rs 2 crore) for his estimated future legal fees in various court cases in India.
The judge said paying the Indian lawyers would mean “preferring Indian lawyers as creditors in event of Mallya being made bankrupt” whereas any proposed expenditure should be “for the benefit of the creditors as a whole”.
Marshall had provided a letter from Bachubhai Munim & Co dated February 26, 2021, proposing a method in which their costs could be checked and disputed by the banks that involved an Indian judge acting as costs expert.
Justice Miles said the letter was “not satisfactory as it would involve putting the Indian legal costs into the hands of an Indian expert over which the UK court would have no control” and that it was an “inappropriate attempt to include material to bolster an application which lacked evidential basis when made”.
The bankruptcy case had initially been adjourned for six months to give time for the cases in India to proceed and for Mallya to settle his debt. Now a hearing will take place on July 26 when a judge will decide whether to make an immediate bankruptcy order against the beleaguered businessman.
“The pandemic in India has had a serious impact on the progress of cases through the Indian courts and there is no material which would enable the court to conclude that any steps that might be taken in Indian hearings between now and July 2021 would have any material bearing on the bankruptcy petition. Most of the amounts being sought are historical sums,” Miles said, pointing out the Indian lawyers “were prepared to do work they did without validation”.
Mallya was ordered to pay 95% of the bank’s costs in this case. Marshall indicated he would take the matter to the court of appeal. However, Miles did allow Mallya’s appeal against a costs order in the February 8 hearing. Mallya had been ordered to pay 50% of the banks’ costs and Miles ruled that instead, it should be the costs in the case.