Kingfisher Airlines Contests Wilful Defaulter Tag
Mumbai: Debt-ridden Kingfisher Airlines on Tuesday contested United Bank of India's decision to declare it as a 'wilful defaulter', saying the Reserve Bank of India guidelines in this regard do not apply to the company.
Grounded since October 2012, the carrier is also in the process of seeking legal recourse against the action by United Bank of India.
On September 1, the state-owned lender declared Kingfisher Airlines, its promoter Vijay Mallya and three other directors as wilful defaulters citing that the company allegedly indulged in diversion of funds by opening multiple accounts. (Read more)
"The company is advised that none of the parameters constituting wilful default governed by the Master Circular issued by the Reserve Bank of India apply to the company and the company is in the process of seeking legal recourse against action of UBI," Kingfisher said in a communication to the BSE.
According to the company, UBI granted the request for a personal hearing but refused the plea to be represented by external legal counsel at the personal hearing.
Kingfisher's petition seeking representation through an external legal counsel was rejected by the Calcutta High Court. Subsequently, the company filed a special leave petition (SLP) before the Supreme Court, the communication said.
It also said that despite the petition before the Supreme Court being pending, UBI declared Kingfisher and its four directors as wilful defaulters.
"The SLP came up before the Supreme Court of India when the Supreme Court of India observed that the SLP had become infructuous because UBI had already declared, inter alias, the company as wilful defaulter and that the company may seek legal recourse in the appropriate court having jurisdiction at the first instance if it wishes to challenge the order of UBI," it added.
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