MUMBAI: The Enforcement Directorate has told the Bombay High Court that the recovery of around Rs 15,000 crore by banks from fugitive businessman Vijay Mallya does not make the pending money laundering proceedings against him redundant.
The agency said the recovery of bank dues was separate from criminal proceedings arising from alleged scheduled offences and money laundering under the Prevention of Money Laundering Act.
In its reply filed before the court, the ED said the amount recovered by the SBI-led consortium could affect the calculation of Mallya’s outstanding civil liabilities, but it could not determine whether the alleged offences had been committed.
“The amount of bank recovery and the liability determined in recovery proceedings may have relevance for the purpose of quantifying the outstanding dues of the banks,” the agency said, adding that it did not determine whether the scheduled offences or money laundering offence had been established.
The ED also opposed Mallya’s attempt to link the recovery of bank dues with the continuation of criminal proceedings. It said the PMLA proceedings concerned alleged criminal offences and could not be treated as a purely commercial dispute.
The agency further pointed to Mallya’s continued absence from India and his failure to appear before the competent criminal court.
“His continued absence and conduct, therefore, remain relevant to the overall factual background of the present proceedings,” the ED said.
Mallya had approached the Bombay High Court seeking closure of the long-pending proceedings, arguing that his civil liabilities had effectively been settled after the SBI-led consortium recovered around Rs 15,000 crore. His lawyers have said the recovery was significantly higher than the original claim of about Rs 6,203 crore, including interest.
The ED said the subsequent recovery or restoration of assets did not extinguish the criminal proceedings.
It said properties worth about Rs 14,131.60 crore had been restored or handed over to the SBI-led consortium under orders issued during proceedings before a special PMLA court in Mumbai.
The agency said restoration of assets under Section 8(8) of the PMLA was a statutory mechanism for returning property to a claimant with a legitimate interest and did not determine whether the alleged scheduled offence or money laundering offence had occurred.
Mallya has been living in the UK since leaving India in 2016. He was declared a fugitive economic offender in 2019.
His wider legal battle also includes a challenge to the constitutional validity of the Fugitive Economic Offenders Act and the proceedings under which he was declared a fugitive economic offender.
The Bombay High Court has recently given Mallya a final opportunity to clarify whether he intends to return to India and submit to its jurisdiction. The court is expected to consider the ED’s response and the status of the pending proceedings.
