Kingfisher moves HC against UBI default notice

KingfisherThe grounded Kingfisher Airlines today moved the Calcutta High Court challenging a communication by the United Bank of India that asked its chairman Vijay Mallya and other board members to meet the bank officials for alleged wilful default on payment of dues to the tune of nearly Rs 400 crore .

The counsels for Kingfisher Airlines submitted before Justice Dipankar Dutta that they have prayed for withdrawal of the notice for wilful default by UBI and that they be allowed a personal hearing along with legal representative on the issue.

They claimed that the bank authorities have refused to allow any legal representative to accompany Mallya or his board members for the meeting, which was scheduled to be held at the UBI headquarters here today. They submitted that the bank cited the Master Circular of Reserve Bank of India (RBI) which has not kept any provision for such representation.

The counsels claimed that as there was no provision, it was the discretion of the bank concerned, but the UBI has disallowed its contention without citing any reason. The counsels for UBI submitted that a credit limit of Rs 398.22 crore was sanctioned to Kingfisher Airlines, Bangalore, by the bank.

They alleged that repayment was defaulted and funds were diverted. It was claimed that a consortium of banks with the lead bank being the State Bank of India had extended loans to Kingfisher. UBI was part of the consortium.

They stated that it was just a showcause notice wherein the airline authorities were required to produce the accounts. After hearing both parties, Justice Dutta said that orders would be passed tomorrow.

(Source: PTI)

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