The Supreme Court of India today adjourned its hearing on sentencing of Vijay Mallya for contempt of court. The bench of Justices AK Goel and UU Lalit reportedly deferred the hearing because there was no lawyer from the Ministry of Home Affairs present, which had been directed to produce Mallya in court today.
This turn of affairs is the latest embarrassment in the government’s handling of the cases against Mallya, after being rapped by the UK court conducting the extradition hearing against him for failure to send them some required documentation.
Background to the Matter
On 9 May 2017, a two-judge bench of the Supreme Court of India found Vijay Mallya guilty of contempt of court. The decision related to the transfer of $40 million from Mallya to his children in February 2016, which he allegedly failed to disclose to the court in an affidavit regarding the details of his movable and immovable assets.
On Monday, 10 July 2017, the court was supposed to decide the quantum of punishment at a hearing, which they had directed Mallya – who has been in the UK for over a year now – to attend.
The high court of Karnataka had issued an order to Mallya to disclose his assets (which would have included the dealings relating to the sum of $40 million) in March 2016. On 25 July 2016, the Supreme Court had taken cognisance of Mallya’s failure to comply with the Karnataka High Court’s orders, and issued a notice to him regarding the charge of contempt.
The bench of Justices AK Goel and UU Lalit of the Supreme Court came down strongly on Mallya in their order dated 9 May, noting that he had continued to show contempt for the high court even after requesting more time on 11 January 2017 to reply to the charge.
Mallya’s lawyers in India have filed an application for recall of the order, as a result of which he has claimed he does not need to reply to the contempt notice.
What We Can Expect (Whenever the Sentence is Actually Passed Now)
1. Mallya was obviously not going to return to India to attend the hearing on Monday – he has said he is the subject of a witch-hunt as he is made a scapegoat for India’s corporate debt fiasco. He is fighting extradition hearings in the UK in relation to allegations of fraud in one of Kingfisher’s loan deals with IDBI bank.
Also read: Hinting at Mallya, Modi Seeks UK’s Help to Get Economic Offenders
2. The punishment for contempt of court is not severe – the maximum punishment is 6 months imprisonment, or a fine of up to Rs 2,000, or both. Mallya is unlikely to bother about either, because the charges against him for fraud are what can get him extradited, not contempt of court. Given the sensitivity of the issue, we can expect the court to go with the maximum sentence of imprisonment and fine. These are normally reducible if an apology is tendered, but this did not arrive by Monday since Mallya is arguing he never committed contempt in the first place.
3. The Indian government is likely to add this conviction and sentence to the dossier of evidence for the extradition proceedings in the UK. These should not materially affect the extradition proceedings, but can be used to further demonstrate Mallya’s delinquency towards legal proceedings in India.
There may be a rap for the government from the court for failing to ensure an expedited extradition process – Indian authorities have come under fire from the UK courts for their tardiness in providing information required for the proceedings to continue. The MHA’s failure to have a lawyer present in court on Monday just made things worse.
4. The conviction and sentence will have a more significant effect on further legal proceedings in India, as multiple cases roll on against the former liquor baron.
Seizure of Mallya’s assets will become easier as it will be easier to establish that he is not complying with court orders, though of course, the authorities have already seized most of them.
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