North Goa collector allows banks to take over Kingfisher Villa

Thursday, May 12, 2016,9:59 IST By Metrovaartha A A A

Mumbai | In a major setback to liquor baron Vijay Mallya, revenue officials in Goa today allowed the lenders to Kingfisher Airlines to take physical possession of `Kingfisher Villa’ in Candolim.

The North Goa Collector has given an order in favour of banks to take physical possession of the Kingfisher Villa, banking sources said late this evening.

The Villa, valued at Rs 90 crore, used to be Mallya’s base in Goa and also the venue of many of the famous parties hosted by him during the `good times’.

Advocate Parag Rao, who appeared on behalf of United Spirits, told that the company had withdrawn its claim before the collector yesterday. We told the collector that we will not press for the objection, he said.

Representing the bankers’ consortium, SBICAPS had sought physical possession of the property under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act in late 2014.

However, three of Mallya’s companies United Spirits Limited (USL), Kingfisher Airlines and United Breweries ┬áhad objected to the move.Last week, media reports had said that Mallya put up a villa manager as a caretaker to thwart the bank’s attempt to take it over.

The villa was mortgaged to the lenders while obtaining loans for the now defunct airliner, but the caretaker, who claimed to be an employee of United Breweries, and the subsequent establishment of tenancy rights would have made it difficult for the banks to take over the property.

According to reports, bankers’ attempts to take possession of the villa were repeatedly stalled by USL, which claims the first right to buy the property as it is a tenant. USL had also approached a local court, citing provisions in the Portuguese Civil Code to block auction of the property in the past.

There was a delay on part of the collector in allowing takeover of the property, which made SBICAPS approach the Goa Bench of Bombay High Court. The bench granted three months to the collector to complete the hearing of application filed by the consortium of banks seeking possession of the villa.

So far, the banks have recovered over Rs 1,400 crore by selling shares and collaterals and over Rs 1,200 crore is blocked in escrow accounts at Debt Recovery Tribunal, Bengaluru and the Karnataka High Court. Mallya had told the Supreme Court he was ready to repay up to Rs 6,800 crore of the total dues of over Rs 9,400 crore.

Last month, the consortium of banks had failed in its attempt to sell Kingfisher Airline’s erstwhile headquarters Kingfisher House in Mumbai because of the high reserve price of Rs 150 crore.

Attempts to sell the Kingfisher brands and associated trademarks carrying a reserve price of Rs 367 crore had also found no takers. Mallya left the country on March 2 for London. Earlier this week, the Government asked Britain to deport Mallya, citing the revocation of his passport and a non-bailable warrant against him.

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