The Supreme Court on July 11 sentenced fugitive businessman Vijay Mallya to four months' imprisonment and ₹2,000 fine almost five years after he was found guilty of contempt of court.
The court directed the Home Ministry to "secure the presence of the contemnor [Mallya] to undergo the imprisonment imposed upon him". Mallya is believed to be in the United Kingdom.
"Considering the fact that the contemnor [Mallya] did not show any remorse nor tender any apology for his conduct, we impose sentence of four months and fine of ₹2,000... We direct the Ministry of Home Affairs to secure his presence to undergo the imprisonment. Needless to say, the government, including the Ministry of External Affairs and other agencies, shall carry out the directions with due diligence and utmost expediency," a three-judge Bench led by Justice U.U. Lalit ordered.
The court ordered the government to file a compliance report.
The apex court had found Mallya guilty of contempt on May 9, 2017 for wilful disobedience of its order to come clean about his assets. He had not disclosed $40 million received from British liquor major Diageo Plc following his resignation as Chairman of United Spirits Limited in February 2016. Mallya had disbursed the transaction amount to beneficiaries, including his immediate family members.
The court directed the fine amount to be deposited by Mallya with the Supreme Court registry in four weeks. If not, he would be sentenced to a further imprisonment of two months.
‘Void, inoperative’
The transaction with Diageo, referred to in the May 2017 judgment has been declared "void and inoperative".
"We direct that the transaction referred to in the judgment of May 9, 2017 in terms of which the amount of $40 million was disbursed to the beneficiaries is void and inoperative," the court pronounced.
The court directed that Mallya and his beneficiaries are bound to deposit the amount received by them, along with 8% interest per annum, with the recovery officer concerned within four weeks.
If the amount is not deposited within the stipulated period, the recovery officer would take appropriate proceedings for the recovery of the money. The Government of India and its agencies should provide assistance and complete cooperation to the recovery exercise.
Justifying the "adequate" punishment of Mallya and directions to recover the amount, the court said these steps were necessary to "maintain the majesty of law" and also to "set at naught the advantages secured by him and anyone claiming under him".
The court said its directions were meant to ensure that the "amounts in question are available in the execution of decrees passed in the recovery proceedings concerned".
While reserving the case for judgment in March, the Supreme Court had said it had been "dead-walled" about the proceedings going on in the United Kingdom against Mallya, who was behaving like a "free person" in that country.
‘It is like a dead wall’
"We have said there are some proceedings going on in the U.K. We don't know the details of those proceedings, what is its nature or the relief sought for in those proceedings, what is even the number of those proceedings... Nothing. We have been simply told that something is pending. What is the foreseeable future by which time it will be concluded, even in which court it is pending.. we don't know... Nothing. It is like a dead wall. So how long can we go on..." Justice Lalit, heading a three-judge Bench, had observed.
The court's amicus curiae and senior advocate Jaideep Gupta had said Mallya should not only be punished but the top court should also sequester his assets.
The amicus said the court had given ample opportunity to Mallya to at least present his defence through counsel. The businessman has not done so.
On August 30 2020, the apex court had dismissed Mallya's review petition against the 2017 verdict of contempt.
Mallya had informed the court that he had no control over the $40 million as he had already disbursed it among his three adult children, who were U.S. citizens. The consortium of banks to which Mallya owed money had sought contempt action against him and argued that the disbursal of the $40 million among his three children was in direct violation of a standing Karnataka High Court order that none of his assets should be “alienated, disposed of or be subjected to the creation of third party rights.”
