Four months in prison; Rs. 2000 fine for Vijay Mallya for contempt; US$40 million to be deposited by him and beneficiaries at 8% interest per annum

Supreme Court: The 3-judge bench of UU Lalit*, S. Ravindra Bhat and PS Narasimha has imposed sentence of four months and fine of Rs.2,000/- on Vijay Mallya for contempt of Court after observing that he “never showed any remorse nor tendered any apology for his conduct” of transferring a huge sum of US$40 million to his children instead of repaying his debt of more than Rs. 9000 crores to the banks.

On 09.05.2017, this Court had found that the action on part of the Contemnor in disbursing the amount of US$ 40 million was against the text and tenor of orders passed by the High Court of Karnataka and that the Contemnor was guilty of contempt. In 2020, the Supreme Court refused to review the 2017 order. 

In the present order, the Court observed that apart from punishing the contemnor for his contumacious conduct, the majesty of law may demand that appropriate directions be issued by the court so that any advantage secured as a result of such contumacious conduct is completely nullified.

The approach may require the court to pass directions either for reversal of the transactions in question by declaring said transactions to be void or passing appropriate directions to the concerned authorities to see that the contumacious conduct on the part of the contemnor does not continue to enure to the advantage of the contemnor or any one claiming under him.”

Hence, “in order to maintain the majesty of law”, the Court imposed sentence of four months and fine of Rs.2,000/- on Vijay Mallya. Mallya has been directed to deposit the fine with Supreme Court Registry within four weeks and upon failure to do so he shall undergo further sentence of two months. The Court has also directed the Ministry of Home Affairs, to secure his presence to undergo the imprisonment imposed upon him. A Compliance Report is also needed to be filed in the Supreme Court Registry.

With respect to the amount transferred to the beneficiaries, the Court has issued the following directions:

A. The transactions referred to in the Judgment and Order dated 09.05.2017 in terms of which the amount of US$ 40 million was disbursed to the beneficiaries, is held to be void and inoperative;

B. Mallya and the beneficiaries shall be bound to deposit the amount received by such beneficiaries along with interest at the rate of 8 per cent per annum with the concerned Recovery Officer within four weeks.

C. In case the amounts are not so deposited, the concerned Recovery Officer shall be entitled to take appropriate proceedings for recovery of said amounts; and Government of India and all the concerned agencies shall extend assistance and complete cooperation. It shall be open to take such appropriate steps including the appointment of Forensic Auditor(s).

[State Bank of India v. Dr. Vijay Mallya, 2022 SCC OnLine SC 826, decided on 11.07.2022]

*Judgment by: Justice UU Lalit

Amicus Curiae: Senior Advocate Jaideep Gupta

Vijay Mallya’s Image Courtesy: Facebook 

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One comment

  • What is the point passing orders which are not executable?

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