Vijay Mallya
Vijay Mallya|Source: The Indian Wire
Litigation News

High Court of England & Wales dismisses Vijay Mallya appeal against extradition order [Read judgment]

Shruti Mahajan

The High Court of England and Wales on Monday ruled against liquor baron Vijay Mallya, who had appealed against the order of his extradition to India in relation to the Kingfisher Airlines (KFA) fraud and money laundering cases.

A Division Bench of the High Court of Justice in London dismissed the appeal filed by Mallya against the order of the Senior District Judge (SDJ) on the basis that there is a prima facie case made out him, which is in tandem with the case alleged by India on seven aspects.

These aspects include allegations of conspiracy regarding disbursement of a loan, despite weak financials and poor credit rating of Mallya's KFA. It was alleged that the company did not meet the policy of corporate loans of IDBI Bank and others.

The High Court judgment notes that there is also a prima facie case regarding Mallya making false representation as regards inward investment, exaggerated brand value, and misleading growth forecasts. The Court also says,

"The Appellant’s dishonest intention not to repay the loans is shown by his later conduct in trying to avoid the personal and corporate guarantees."

The challenge to the order of the lower court was mounted primarily on the grounds that the Court had erred in concluding that a prima facie case was made out against Mallya on issues of defrauding, conspiracy, false representation, money laundering. It was also contended that the lower court erred in its approach on the issue of admissibility of evidence against Mallya.

While assessing the grounds for challenge to the SDJ order, the High Court held,

"The role of an extradition court considering this question is to consider whether a tribunal of fact, properly directed, could reasonably and properly convict on the basis of the evidence. The extradition court is, emphatically, not required itself to be sure of guilt in order to send the case to the Home Secretary. The extradition court must conclude that a tribunal of fact, properly directed and considering all the relevant evidence, could reasonably be sure of guilt. There is no basis upon which it could be said the SDJ misunderstood this, or that she misdirected herself."

High Court of England and Wales

The Court further stated that the SDJ was well aware of what was needed to prove a prima facie case, or not. Further, the Court saw no evidence that the SDJ failed to consider relevant evidence, and no such concrete submission has been advanced.

On the argument made by Mallya's counsel that the conspiracy and misrepresentation cases were mutually exclusive, the High Court held,

"We do not consider that the conspiracy and misrepresentation cases are mutually exclusive. That argument would only work, as a matter of logic, if the alleged conspirators in IDBI were the same officers as the officers who were the guiding mind of IDBI for the purposes of the decisions to authorise the loans. But they were not all the same people."

On the allegation that there was a prima facie case of Mallya's misrepresenting his net worth to the banks, the Court noted,

"The point here is a simple one. If we assume that Ms Montgomery is right, and that far from the Appellant having told SBI that he was worth about 250 Crores, IDBI’s contemporaneous assessment was that he was worth that amount, then there was evidence to support the SDJ’s finding that the Appellant misrepresented his worth; he was saying he was worth nearly 1400 Crores, whereas IDBI’s assessment was that he was only worth about 250. That is capable of being a misrepresentation by him, even if it did not convince IDBI in the end."

On the SDJ's conclusion that there was a prima facie case of conspiracy against Mallya, it was held,

"It may be that taken on its own, none of the points relied on by the SDJ “proved” a conspiracy. That was not the question for the SDJ, however. The question, rather, was whether the evidence, taken as a whole, was such that a reasonable jury, on one possible view of the facts, could draw a safe inference that there was a conspiracy. Again, the criticisms of the SDJ are, in truth, jury points for an eventual trial. Finally, the question for the SDJ was not whether the Respondent was maintaining its initial case. If the SDJ’s decision is otherwise sustainable, ignoring any bad points which the Respondent might have taken initially and then have abandoned, the fact that the SDJ did not refer to those bad points cannot make her decision wrong."

Finally, on the aspect of money laundering, the Court held that there is a prima facie case which, in seven important respects, coincides with the allegations in India.

a) The three loans were disbursed as the result of a conspiracy between the named conspirators.

b) The loans were made despite KFA’s weak financials, negative net worth and low credit rating.

c) The loans were made despite the fact that KFA, as a new customer, did not meet the norms of IDBI’s Corporate Loans Policy.

d) The Appellant was party to false representations to induce the loans that funds would be inducted by way of unsecured loans, global depository receipts and equity.

e) The Appellant was party to false representations about inward investment, an exaggerated brand value, misleading growth forecasts, inconsistent business plans (including the January 2009 business plan).

f) The Appellant was party to the offer of “symbolic” and “grossly inadequate security” in the form of a negative lien on 12 hire purchase aircraft, despite knowing that KFA would not get title to them during the period of the loan.

g) The Appellant’s dishonest intention not to repay the loans is shown by his later conduct in trying to avoid the personal and corporate guarantees.

On these grounds, among others, the Court rejected Mallya's appeal against the SDJ order.

Before the High Court, Mallya was represented by Queen's Counsel Clare Montgomery and Ben Watson, who were briefed by Boutique Law LLP.

Mark Summers QC and Aaron Watkins, instructed by the Crown Prosecution Service, represented the Government of India.

The SDJ, in December of 2018, ruled that Mallya can be sent to India for being tried for cheating and money laundering. These charges are levelled against the businessman by the Indian government, based on which the SDJ ruled that there was a prima facie case which warranted his extradition.

This judgment was challenged by Mallya before a Single Judge Bench of the High Court by way of a written appeal and was rejected in April 2019 by Justice William Davis. Mallya was subsequently, in July 2019, allowed to appeal against the order on one of the five grounds presented by him.

The permission to appeal was granted only on the ground that the SDJ was wrong to conclude, in the language of s.84(1) of the Extradition Act 2003, that there was evidence “which would be sufficient to make a case requiring an answer by the person if the proceedings were the summary trial of an information against him”.

Read the judgment:

Vijay Mallya - UK HC judgment - 20.04.2020.pdf

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