Bombay HC Insists Mallya Return to India Before Hearing FEO Act Challenge

In a pointed rebuke to absconding economic offenders, the Bombay High Court has directed fugitive businessman Vijay Mallya to first submit himself to Indian jurisdiction before it will entertain his constitutional challenge to the Fugitive Economic Offenders (FEO) Act, 2018. During a hearing on December 23, 2025, a bench comprising Chief Justice Shree Chandrashekhar and Justice Gautam Ankhad questioned Mallya on his intentions to return to India, emphasizing that legal remedies cannot be pursued from abroad without accountability. The court's stance underscores a critical principle in Indian jurisprudence: fugitives evading trial cannot selectively invoke judicial processes while remaining beyond reach.

This development arises amid Mallya's twin petitions—one a criminal appeal against his 2019 declaration as a fugitive economic offender (FEO) by a special Prevention of Money Laundering Act (PMLA) court, and the other a writ petition contesting the constitutional validity of key provisions in the FEO Act. The hearing highlighted tensions between the right to legal representation and the imperative of personal appearance in matters involving serious criminal allegations.

Background: Mallya's Long-Standing Legal Battles

Vijay Mallya, the 70-year-old former chairman of the now-defunct Kingfisher Airlines, has been a fugitive since fleeing India in March 2016. Accused of orchestrating one of the largest banking frauds in Indian history, Mallya allegedly defaulted on loans totaling over Rs 9,000 crore extended to his airline, which collapsed in 2012 amid operational failures and mounting debts. Investigations by the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) revealed charges of fraud, money laundering, and conspiracy under the Indian Penal Code, PMLA, and related statutes.

In January 2019, a special PMLA court declared Mallya an FEO under the newly enacted FEO Act, 2018, which empowers authorities to confiscate assets of economic offenders who flee jurisdiction to avoid prosecution in cases involving Rs 100 crore or more. The Act aims to deter white-collar crime by allowing asset attachment and forfeiture without convicting the offender on predicate offenses, provided they have absconded. Mallya's assets worth approximately Rs 14,000 crore have since been attached by the ED, with banks recovering around Rs 6,000 crore—figures that his counsel argues have neutralized civil liabilities.

Mallya's extradition from the United Kingdom, where he resides, has been in protracted proceedings since 2017. The UK courts have repeatedly upheld India's extradition request, but appeals and humanitarian grounds have delayed execution. Solicitor General Tushar Mehta informed the Bombay High Court that these proceedings are at an "advanced stage," warning that allowing Mallya's petitions could be cited to stall extradition further.

Court Proceedings: Jurisdiction as a Prerequisite

The December 23 hearing before the Bombay High Court bench was marked by a robust exchange between Mallya's senior counsel, Amit Desai, and representatives for the ED, including Mehta, Additional Solicitor General S.V. Raju, and Anil Singh. Desai argued that Mallya retains statutory rights under the FEO Act to challenge its provisions through legal representation, even from abroad. He contended that the Act's Section 14, which curbs the ability of declared FEOs to defend civil claims abroad, does not bar constitutional challenges in Indian courts. Desai emphasized that financial liabilities have been "effectively neutralised," citing asset recoveries that exceed original dues (initially pegged at Rs 6,200 crore but now including interest exceeding Rs 15,000 crore).

The bench, however, was unpersuaded. Chief Justice Chandrashekhar remarked, "How does one wipe out criminal liability without submitting to the jurisdiction of the court?" The judges clarified that while fugitives are entitled to counsel, challenging the vires (constitutional validity) of a statute like the FEO Act requires personal submission to jurisdiction. They invoked the legal understanding that pleas against such specialized legislation cannot proceed in absentia, as it would undermine the Act's purpose of preventing abuse of process by absconders.

Mehta reinforced this by arguing that the FEO Act was legislated to close loopholes exploited by economic offenders who file petitions remotely to delay justice. "Fugitives should not be permitted to challenge the validity of an Act without being subjected to courts of the country," he stated, adding a poignant observation: "There are many fugitives, and they are celebrating their birthdays. While nobody can legally object to celebrations, they are mocking our nation." Mehta highlighted the "glaring" facts of economic harm caused by Mallya, including the national interest implications of his alleged Rs 15,000 crore default.

The court also addressed the procedural overlap of Mallya's petitions, ruling that both cannot proceed concurrently. It directed Mallya, via Desai, to decide by the next hearing on February 12, 2026, which petition to press and which to withdraw. Additionally, the bench mandated a statement or affidavit from Mallya by February 11 detailing his return timeline, stating: "Come back to India first. Indicate when you’re coming, and then we will hear the petition on the next date."

Desai countered by referencing Supreme Court precedents allowing litigation from abroad and Mallya's prior representations to the government seeking case closure. He specifically challenged Section 12(8) of the FEO Act, which permits confiscation without a mechanism for property restoration upon acquittal, arguing it violates fundamental rights under Article 300A (right to property). The ED rebutted that restoration is feasible only post-return and acquittal on predicate offenses, and that Mallya had ample opportunities to appear before trial courts.

Legal Implications: Reinforcing Accountability in Economic Crime

This ruling from the Bombay High Court carries significant implications for the enforcement of the FEO Act and broader white-collar crime prosecutions in India. Enacted in 2018 as part of Prime Minister Narendra Modi's anti-corruption drive, the FEO Act has been invoked against high-profile fugitives like Mallya, Nirav Modi, and Mehul Choksi, targeting the estimated $1.75 billion in annual losses from economic offenders fleeing abroad.

From a jurisdictional standpoint, the court's decision aligns with established principles under Article 226 of the Constitution (high court writ jurisdiction), which implicitly requires petitioners to submit to the court's authority for effective adjudication, especially in criminal matters. This echoes the Supreme Court's observations in cases like State of Maharashtra v. Vijay Mallya (ongoing extradition context), where personal appearance is deemed essential for criminal appeals.

The emphasis on distinguishing civil recovery from criminal liability is particularly instructive. While banks have recouped substantial sums through asset sales—often via mechanisms under the Insolvency and Bankruptcy Code, 2016—the court clarified that such resolutions do not extinguish criminal culpability under PMLA or IPC Sections 420 (cheating) and 467 (forgery). Legal practitioners must now advise clients that financial settlements alone cannot bar FEO declarations or related trials.

Moreover, the hearing exposes vulnerabilities in extradition processes. Mehta's disclosure of advanced UK proceedings highlights how domestic litigation can be weaponized to delay international cooperation under treaties like the India-UK Extradition Treaty, 1992. This may prompt amendments to the FEO Act or PMLA to expedite hearings in absentia for validity challenges, balancing due process with deterrence.

For the legal community, this case serves as a cautionary tale on representing fugitive clients. While Desai adeptly invoked rights to representation—bolstered by Section 14(3) of the FEO Act permitting defense in criminal proceedings—the court's jurisdictional bar signals that ethical duties under Bar Council rules may intersect with national interest considerations. Lawyers must navigate the fine line between zealous advocacy and enabling evasion.

Broader Impacts on India's Justice System

The Mallya saga exemplifies systemic challenges in prosecuting economic crimes. Kingfisher's downfall not only saddled public sector banks with non-performing assets (NPAs) exceeding Rs 9,000 crore but also eroded public trust in corporate governance. The government's subsequent reforms, including the FEO Act and enhanced ED powers under the Finance Act amendments, aim to reclaim assets and expedite justice—outcomes partially realized here with over Rs 6,000 crore recovered.

Yet, critics argue the Act's provisions, like non-bailable warrants and summary confiscation, risk overreach, potentially violating Articles 14 (equality) and 21 (life and liberty). Mallya's challenge to Section 12(8) could, if heard on merits, test these boundaries, possibly leading to Supreme Court scrutiny on whether the Act disproportionately impacts property rights without adequate safeguards.

Internationally, this reinforces India's stance in multilateral forums like the Financial Action Task Force (FATF), where fugitive asset recovery is a priority. Successful extraditions under the FEO regime could deter similar flights, benefiting creditors and taxpayers.

As the February hearing approaches, Mallya's response will be pivotal. A refusal to return may lead to petition dismissal, accelerating asset forfeiture. Conversely, any indication of compliance could pivot the discourse toward settlement talks, though criminal trials would persist.

In sum, the Bombay High Court's directive is a clarion call for accountability, reminding economic offenders that the long arm of Indian law extends beyond borders. For legal professionals tracking white-collar enforcement, this case illuminates the evolving interplay of domestic statutes, international law, and constitutional imperatives in the fight against financial fugitives.