SC set to make a trend setting verdict against wilful defaulters in Mallya’s case

The Supreme Court’s hearing on the consortium of banker’s plea against Vijay Mallya is going to be a path breaking event against wilful defaulters in the country.

Consortium of 17 banks led by SBI have filed a complaint against Mallya for not allowing to leave the country.

Indications are that the SC may take serious initiatives against Mallya in the context of the increasing difficulty of the system to arrest wilful defaulter practices. Over the last few weeks, opinion from different quarters are strong that the existing official machinery including RBI, SEBI and banks are not taking serous steps to stop wilful defaulters.

The SC has already made notable efforts in a previous PIL against the menace of rising NPAs in banks. It has asked the RBI to submit the names of high value wilful defaulters within two weeks.

Where the SC may take some positive steps

The SC can make some important precedence in tackling wilful defaulters. Firstly, it may ask the relevant parties why they have failed to initiate penal actions. SBI has already declared Mallya a wilful defaulter. Yet he continues in the board of few companies. Similarly, banks are late to initiate the penal actions despite Mallya owned several other credible companies.

Developments during the last few days shows that Mallya is in serious trouble. The enforcement department’s charge of money laundering related to his loan from IDBI bank is the most damaging one. It may send him to criminal prosecution.

The consortium of 17 banks led by SBI has mentioned that “the non-payment (of Rs 9091 crores) may adversely impact the economy of the nation.”

In a late bailout move, the UB has removed Mallya from its board.