State Bank Of India & Ors v Mallya (2)

State Bank Of India & Ors v Mallya (2)

There is no statutory or public policy bar under Indian law preventing secured creditors, including public sector banks, from relinquishing security in bankruptcy proceedings. Petitioners are permitted to amend the petition to state willingness to give up security for the benefit of all creditors.

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
18 May 2021
Procedural Posture
Insolvency Petition / Application to Amend Petition
Outcome
Permission granted to amend petition.
Legal Topics
Secured Creditor Rights, Waiver of Security, Public Policy, Statutory Interpretation, Estoppel, Res Judicata
Insolvency Bankruptcy Cross Border Enforcement Secured Creditor Rights Waiver of Security Public Policy Statutory Interpretation Estoppel +1 more

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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

Insolvency Petition / Application to Amend Petition

Legal Issues

  1. 1 Whether Indian law prevents secured creditors from relinquishing security in bankruptcy proceedings
  2. 2 Whether public policy, estoppel, or res judicata bar the Petitioners from waiving security
  3. 3 Whether the Petitioners can amend the petition to comply with statutory requirements

Ratio Decidendi

There is no statutory or public policy bar under Indian law preventing secured creditors, including public sector banks, from relinquishing security in bankruptcy proceedings. Petitioners are permitted to amend the petition to state willingness to give up security for the benefit of all creditors.

Court Disposition

Permission granted to amend petition.

Orders

  • Petitioners may amend the petition to state willingness to relinquish security for the benefit of all creditors in the event of bankruptcy.
  • Parties to agree an order and fix a hearing to determine any matters arising.