Mallya Becomes First Tycoon To Be Declared Fugitive Economic Offender
Mallya has become the first businessman to be declared EFO under the provisions of the new Fugitive Economic Offenders Act.
Weeks after a U.K. court ordered his extradition, former liquor baron Vijay Mallya, accused of defaulting on loans of over Rs 9,00O crore, received another blow as a Mumbai court declared him a "Fugitive Economic Offender".
Mallya on Saturday became the first businessman to be declared a fugitive economic offender under the Fugitive Economic Offenders Act which came into existence in Aug. 2018.
The Enforcement Directorate had moved the special court for this purpose.
The agency had requested the court that Mallya, currently in the U.K., be declared a fugitive and his properties be confiscated and brought under the control of the Union government as provided under the act.
"The application of the ED is partly allowed. Vijay Mallya is declared as Fugitive Economic Offender under section 12 (i) of the FEO Act," said judge MS Azmi in the order.
Hearing on the second part of the directorate's plea—confiscation of properties—will start from Feb. 5.
Incidentally, the same court is also hearing the directorate's plea to declare diamond merchants Nirav Modi and Mehul Choksi fugitive economic offenders in the Punjab National Bank fraud case.
Mallya's lawyers requested the court to stay the order for four weeks so that they could obtain its full copy and move the high court. The judge declined, saying a court under the FEO Act can not stay its own order.
The directorate had argued that it made all possible efforts to bring Mallya back to India, but failed. The extradition process in the U.K. court was a proof enough that he was not willing to return, the directorate’s counsel DN Singh had contended.
Even after the London court upheld Indian authorities' plea for his extradition, Mallya decided to appeal against the order before the higher court there and refused to return, so he should be declared a fugitive economic offender, Singh had argued.
Mallya's lawyers contended that as he had surrendered before a magistrate's court in London (during the hearing on his extradition case) and obtained bail, he could not be called a fugitive.
They had also questioned the directorate's claim that he left India under suspicious circumstances, arguing that he had left to attend a meeting of World Motor Sports as the director of an F1 team (Force India).
Mallya left India on March 2, 2016. A court in London on Dec. 10, 2018 ordered his extradition.
Facing cases registered by the directorate as well as the Central Bureau of Investigation, he is wanted for alleged fraud and money laundering amounting to an estimated Rs 9,000 crore.
Under the FEO Act, a person can be declared a fugitive economic offender if a warrant has been issued against him for an offence involving an amount of Rs 100 crore or more and he has left the country and refuses to return.