FINAL ORDER

26.12.2024

Dictated by: Rajesh Malhotra

The present appeals are filed by the appellants under Section 26 of Prevention of Money Laundering Act, 2002 (PMLA) against the impugned order dated 01.12.2016 passed by the Adjudicating Authority in Original Complaint No. 612/2016 (OC) vide which the properties of the appellants attached vide Provisional Attachment Order No. 11/2016 (PAO) dated 11.06.2016 were confirmed. The details of the said properties are as under:-

Details of properties

2. As per the facts of the case a preliminary enquiry was conducted by CBI, BSFC, Mumbai against the officials of IDBI Bank Ltd., M/s Kingfisher Airline Ltd. and its officials on the allegations that the suspect officers of the IDBI Bank had sanctioned & disbursed term loans to the extent of Rs. 900 crores to the said company without conducting due diligence and the said company had diverted the aforesaid funds, and thereby, causing wrongful loss of Rs. 900 crores plus unapplied interest to IDBI Bank. The said preliminary enquiry revealed that: -

M/s Kingfisher Airlines Ltd. a company promoted by Dr. Vijay Mallya was incorporated in the year 2003 and was fully owned subsidiary of M/s UB holdings Ltd. Bangalore. The registered office of M/s Kingfisher Airlines Ltd. is at UB Anchorage, 10091, Richmond Road, Bangalore-560025, India and the company also has an office at Kingfisher House, Western Express Highway, Ville Parle (E) Mumbai-400039. Dr. Vijay Mallya, r/o Villa B-92, Palm Jumeriah, P.O. Box 20827 Dubai, NA, United Arab Emirates (also at Kingfisher Villa, Goa) is the chairman and CEO of the Company, Sh. A Raghunatham, r/o 104-iiB, Wallace Apartments, Nausherbharocha Road, Grant Road, (W) Mumbai-400007 is the Chief Financial Officer of the company.

The proposal dated 01.10.2009 for the sanction of the corporate loan of Rs. 950 crores, against which the above facilities were sanctioned, was signed and submitted by Sh. A. Raghunathan and was marked to the attention of Sh. B.K. Batra MD. While proposal was pending, vide letter dated 07.10.2009, Sh. A Ragunatham, giving reference to the meeting dated 06.10.2009 between Dr. Vijay Mallya and Sh. Yogesh Aggarwal, CMD, IDBI requested the bank to release a short terms loan of Rs. 150 crores for period of six months to meet certain critical obligation to overseas vendors. On the same day a memorandum was put up to the committee and the facilities were sanctioned though the company was having negative financial & negative net-worth, and the borrower, being a new client did not satisfy the conditions/norms stipulated in the corporate loan Policy of the bank.

Similarly in November 2009, vide order dated 04.11.2009, Sh. A. Raghunathan CFO, Kingfisher Airlines Ltd. gave reference of the meeting held between Dr. Vijay Mallya with the bank’s CMD and sought an adhoc release of Rs. 200 crore pending sanction of the proposal for corporate loan of Rs. 950 crores to meet critical obligations to overseas vendors. The said proposal was put up to the group head (Corporate Banking) Sh. S.K. Batra also recommended that the CMD may approve the proposal and a confirmation of the CMD’s action in releasing the facilities would be sought of by the ED. Sh. Yogesh Aggarwal, the then CMD approved the proposal while instructing for expediting the ratings, though the memorandum mentions that auditors of the company had observed that funds aggregating to Rs. 4630 crores raised on the short-term loan basis were for long term proposed, undisputed TDS amount of crores of rupees was not deposited for over six months and the rating were not available.

The above limits were sanctioned and disbursed though the Original proposal for sanction of Corporate loan of Rs. 950 crore was pending. The said proposal was put up before the credit committee of IDBI bank on 19.11.2009 and the deficiencies existing in the previous sanctions were still existing. The Company M/s Kingfisher Airlines Ltd. was having poor financials, a negative net-worth an