Fresh blow to Vijay Mallya: UK court rejects appeal against bankruptcy order

Fugitive liquor baron Vijay Mallya suffered another legal setback in the UK as the High Court upheld a bankruptcy order against him, rejecting multiple appeals and ruling decisively in favour of a consortium of Indian banks led by State Bank of India.

"The bottom line in relation to this is that the bankruptcy order stands," said High Court judge Anthony Mann, who ruled that the banks' position on security was valid and dismissed two applications filed by Mallya. The court decision affirms the bankruptcy petition originally filed by the banks to recover dues related to loans made to the now-defunct Kingfisher Airlines.

The banks were represented by UK law firm TLT LLP. "This is a significant result for the banks. TLT are pleased to have delivered this outcome, having acted for the banks since 2017 in relation to the DRT (Debt Recovery Tribunal) judgment of GBP 1.12 billion, obtained against Dr Mallya," said Nick Curling, legal director at TLT.

The legal battle dates back to 2017, when Indian banks registered a DRT judgment in the English courts against Mallya, who had provided a personal guarantee for Kingfisher's loans. The bankruptcy petition was filed in September 2018, but Mallya challenged it on several grounds.

In 2020, London's Insolvency & Companies Court (ICC) found the bankruptcy petition partially defective under Section 269 of the Insolvency Act 1986, on the basis that the banks held security over Mallya's assets. The banks appealed, and Justice Snowden allowed the appeal to proceed in 2021. That appeal was finally heard earlier this year and has now concluded with a ruling in the banks' favour.

To strengthen their case, the banks amended their petition to state that they would relinquish any security held if Mallya were declared bankrupt. Mallya opposed this amendment, arguing it contradicted Indian law and public policy. However, the ICC ruled in April 2021 that the amendment did not violate Indian legal principles.

"Despite Mallya’s subsequent appeals, including an appeal against the amendment decision and the Bankruptcy Order itself, Sir Anthony Mann sitting as a judge in the High Court delivered a decisive judgment on 9 April 2025," said TLT LLP. The court refused permission for both appeals and upheld the bankruptcy order.

TLT also clarified that the Enforcement Directorate's recovery of Mallya’s assets in India did not discharge the debt under English law, since those realisations were deemed conditional.

Meanwhile, Mallya's lawyer Leigh Crestohl of Zaiwalla & Co. said the businessman would continue to fight the ruling. "In circumstances where even the (Indian) government confirms that the assets were 'restored', it is fanciful to imagine that those recoveries are in any sense conditional. Mallya will, on this basis, pursue with vigour his application to annul the Bankruptcy Order in England in conjunction with proceedings in the Karnataka High Court to compel the banks to provide an accounting and come clean."

Mallya, declared bankrupt in July 2021, is also pursuing an annulment application in the UK, with a directions hearing scheduled for October.

(With inputs from PTI)