State Bank of India & Ors v Mallya

State Bank of India & Ors v Mallya

The Banks are secured creditors at least in part, and failed to comply with section 269 of the Insolvency Act 1986 by not disclosing their security. The breach is capable of cure by amendment. There is credible evidence of ongoing settlement proceedings in India with a reasonable prospect of the debt being paid or compromised. The petition should be adjourned to allow amendment and time for settlement proposals to be determined.

Parties
Petitioner: State Bank of India; Petitioner: Bank of Baroda; Petitioner: Corporation Bank; Petitioner: The Federal Bank Limited; Petitioner: IDBI Bank Limited; Petitioner: Indian Overseas Bank; Petitioner: Jammu & Kashmir Bank Limited; Petitioner: Punjab & Sind Bank; Petitioner: Punjab National Bank; Petitioner: State Bank of Mysore; Petitioner: UCO Bank; Petitioner: United Bank of India; Petitioner: JM Financial Asset Reconstruction Co. Pvt. Ltd; Respondent: Dr Vijay Mallya
Jurisdiction
England and Wales
Judgment Date
09 April 2020
Procedural Posture
Bankruptcy Petition / First Hearing of Bankruptcy Petition
Outcome
Petition adjourned
Legal Topics
Bankruptcy, Foreign Judgment Enforcement, Secured Creditors, Personal Guarantee, Adjournment of Petition
Insolvency Law Conflict of Laws Bankruptcy Foreign Judgment Enforcement Secured Creditors Personal Guarantee Adjournment of Petition

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Parties

State Bank of India

Petitioner

Bank of Baroda

Petitioner

Corporation Bank

Petitioner

The Federal Bank Limited

Petitioner

IDBI Bank Limited

Petitioner

Indian Overseas Bank

Petitioner

Jammu & Kashmir Bank Limited

Petitioner

Punjab & Sind Bank

Petitioner

Punjab National Bank

Petitioner

State Bank of Mysore

Petitioner

UCO Bank

Petitioner

United Bank of India

Petitioner

JM Financial Asset Reconstruction Co. Pvt. Ltd

Petitioner

Dr Vijay Mallya

Respondent

Procedural Posture

Bankruptcy Petition / First Hearing of Bankruptcy Petition

Legal Issues

  1. 1 Whether the petitioners are secured creditors for the purpose of section 269 Insolvency Act 1986 and failed to disclose security
  2. 2 Whether the bankruptcy petition should be dismissed or adjourned due to non-compliance with statutory requirements
  3. 3 Whether there is a reasonable prospect of the debt being paid or compromised within a reasonable period

Ratio Decidendi

The Banks are secured creditors at least in part, and failed to comply with section 269 of the Insolvency Act 1986 by not disclosing their security. The breach is capable of cure by amendment. There is credible evidence of ongoing settlement proceedings in India with a reasonable prospect of the debt being paid or compromised. The petition should be adjourned to allow amendment and time for settlement proposals to be determined.

Court Disposition

Petition adjourned

Orders

  • Hearing of the petition adjourned for amendment and to allow time for settlement proposals and Supreme Court proceedings in India to be determined.
  • Decision hearing adjourned to a date to be fixed; time for filing an appellant’s notice extended to 21 days after the decision hearing, subject to permission.