AN ANALYSIS ON VIJAY MALLYA SCAM

Introduction

The business tycoon, owner of the kingfisher brand and an IPL team (RCB), a former member of parliament (Rajya sabha) Vijay Mallaya caught everyone in surprise when his outstanding debt of 9,000 crores came to the limelight. He owed them money to 17 Indian banks and was accused of money laundering and fraud. In the fear of arrest, Mallya left the country to find refuge in Britain on 2nd March 2016. India had requested for the extradition of Mallya here and to try cases on him. This article discusses the greatest scam of the country and the law, which was invoked to try him for the offences he has committed. The extradition act, 1962 governs the extradition of a fugitive from a foreign country or vice versa where the process can be done either by treaty or arrangement. This article would collectively discuss more on the case and the act.

Vijay Mallya scam

Mallya who took over the business of his father after his demise at the age of 28 only saw his graph going high and there isn’t any turning back meanwhile. He turned the business into a successful one and expanded his business by investing in the airlines and liquor sector. His Kingfisher airlines have become the number 1 airline company and every passenger opted for the airlines to travel.  The global aviation industry in the year 2012 hit the ground because of various factors like tumultuous financial markets and the slowdown economically. Kingfisher had attracted its passengers with its all-economy, single-class layout aircraft and quality eatables and entertainment had faced its worst phase because of the collapse happening in global aviation. India’s civil aviation already had downfalls and every airline is incurring losses, but the 2005 policy decisions in the sector had made it worse. And in this scene of the collapse, Molly took the high step of buying Air Deccan in 2007 which caused financial backlash to the company and molly.

His lavish lifestyle, a king-like living had made him become the brand icon and kingfisher airlines were the result of it, its first take-off was in 2003 and within 2 years the airlines started commercial operations as well. From 4 flights at the start to 104 flights, the airlines glitter in gold and got satisfying responses from the passengers. So, after his decision to buy air Deccan, the kingfisher without having known of its fate entered its pothole. In 2008, various speed breakers were made to run the airlines in non-profitable routes too, hike in fuel price and the airlines succumbed to it. The airlines which once were celebrated over the world had been debt- trapped and when it took measures to prevent the collapse it was too late. All the international and domestic flights were canceled, shares steeped low and 2012 recorded 7,000 crore loss to the company. Meanwhile, the staff went on strike due to the non-payment of salaries to them since 2008. Critics hold that the merging of kingfisher with air Deccan was the main reason for its complete shutdown. Indian express in 2015 reported that as a result of all the poor decisions and inefficient company, Mallya owed loans from 17 Indian banks worst be SBI where he has 1600 crore debt. That’s when he fled to Britain to escape the arrest.

India and its extradition plea for Mallya

With the mounting debts and arrest in due, fleeing the country came as a checkpoint to the country and its governance. They termed him as an economic fugitive offender and started legal proceedings to extradite him back to try his case in an Indian court. Following his arrest, SC in 2017 held him guilty of contempt of court after a consortium of cases were filed by the banks on his non-repayment of his dues. When the case was going on, he meanwhile transferred the huge sum of 40 million dollars to his children. They held that such act was in contempt of Karnataka HC interim order which restrained the respondent to transfer, alienate, dispose or create third party rights in any of his movable or immovable property and thus his transfer amounts to contempt. So the SC had before deciding the quantum of punishment gave him the opportunity of being heard.

Since he had fled, India had filed a plea for his extradition. London magistrate court had ordered his extradition to India and gave him 14 days to appeal the decision. Before that, in the year 2017, he had secured bail in an extradition warrant issued by Scotland Yard and since then his extradition has been bouncing up and back and no complete decision could be ascertained till now. In 2019, Mumbai HC had declared him a Fugitive Economic Offender (FEO) becoming the first business in Indian history to be FEO. The final hearing in the court after the admissibility of evidence submitted by Indian authorities didn’t bring a fruitful solution to the yearlong trial. The extradition order was appealed by the respondents and finally, in 2019, the UK home secretary ordered his extradition which was praised by the Indian community.  Even after 2 years of this order, his extradition was stalled. The British government had rationalized the stall as there are secret legal proceedings that caused the delay.

Extradition laws in India

The Vijay Mallya case had constant pleadings of extradition in it. In international law, extradition is a formal and diplomatic process where the request has been made by one country to another to return the custody of a fugitive or criminal. In India, we have extradition treaties with 42 countries and extradition arrangements with 9 countries in order to ease the process of extradition. The said process is governed in India under the Indian Extradition Act, 1962. The government can issue a notification to the other country of extending the said act provisions to it under Section 3. Cases of the country that doesn’t have an extradition treaty with India will also be considered and treated under section 3(4). Under this section, the CG can consider any treaty or convention with another country as an extradition treaty. India is a party to various conventions such as International Convention, 1997, the UN convention against corruption, and the UN convention against transnational organized crime in 2011. Once, the investigative agency filed the charge sheet and cognizance was taken by the magistrate and orders/directions for the accused having committed the crime was given, then a request can be made to the ministry of external affairs on extradition. And such a request should also be accompanied by an open-dated warrant of arrests with it having the details of the offence committed.

Critical analysis

India has a treaty with the UK and the countries are duty-bound under article 1 of the extradition treaty to extradite the person who had committed the crime in their native country and took refuge in the host country. An extradition offence can be punishable by both the contracting parties. As in the present case of Mallya, he was tried in London court for the offences he has committed in India and on the request made by Indian authorities to extradite him to India. If such a person is tried in the requested state court or if he proves the prosecution is unjust, oppressive, prejudiced, or discriminatory, the extradition request can be refused. The extradition of Mallya was delayed for years and various contentions had raised questions about the delay. To answer the apex court, CG had rationalized that there are “secret proceedings” against him in the UK. He was tried in UK court and found guilty though. As India already has a treaty binding the extradition with the UK, it is that the claimed economic fugitive would be extradited and be answerable to the loss he caused to 17 banks. 

Conclusion

The case delay only proves the misuse of laws and proceedings by the rich. The banks, which otherwise acted cautiously, had lost most of their reputation. This case would act precedent to the future. So the government has to make sure that such events do not repeat and should extradite Mallya and set a benchmark for any future cases. The extradition is generally adapted only to lessen the burden of finding guilty of the accused that flee to another country to evade the arrest, so in such cases, the delay even in extradition would only bring further degradation to the law and justice. The Mallya case should be re-corrected and he is tried for the offences he committed in the Indian court and the dues.

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