Complex Procedures Give Mallya Ample Time to Delay Extradition

Long time required for UK’s extradition process will give a breather to Vijay Mallya, writes Vakasha Sachdev

Updated
Opinion
8 min read
Vijay Mallya can appeal against the decision to extradite him twice in the High Court as well as the UK Supreme Court.
i
Snapshot

(With the Westminster Magistrate’s Court in the UK to decide on whether or not liquor baron and former Rajya Sabha MP Vijay Mallya should be extradited to India on 10 December 2018, The Quint is reposting this article from its archives. The piece was first published on 27 February 2017.)

The Indian government has formally submitted an extradition request to the United Kingdom, to get its hands on Vijay Mallya, who fled to England last year amid a furore over loan defaults by his companies.

The Quint analyses the UK-India extradition process and explains why we are unlikely to see Mallya return to the country anytime soon, despite the fact that we are finally on the right track. The extradition process is a long and complex one and Mallya will have many opportunities to challenge any decision to extradite him.

Nevertheless, the CBI’s recent chargesheet against the absconding billionaire for cheating and conspiracy looks like it may provide sufficient grounds to eventually haul him back. Though this may not happen soon, the process may be smoother than has previously been the case for extradition between the countries, given both the governments should be keen on it happening.

Also Read: Vijay Mallya Says He’s Now A ‘Political Football’ Between Parties

Complex Procedures Give Mallya Ample Time to Delay Extradition

  1. 1. Noose is Tightening Around Mallya

    Things have really not been going well for Vijay Mallya of late. The Ministry of External Affairs submitted a formal request to the UK High Commission in New Delhi on 9 February 2017 for his extradition. Talks were held between British and Indian officials in New Delhi regarding extraditions (including Mallya’s) on 21 February 2017.

    This was followed up by bullish comments by Finance Minister Arun Jaitley at the London School of Economics on 25 February 2017, in which he indicated that India was for the first time taking serious action to prevent defaulters from evading the law by settling abroad.

    On [27] February 2017, the Supreme Court will hear a plea by the consortium of banks led by SBI, on whose loans the Kingfisher Airlines defaulted. The banks are asking for the recovery of money owed by the now-defunct airline from Mallya himself, on the basis of personal guarantees from the disgraced tycoon. His properties in India have already been seized by the Enforcement Directorate.

    The CBI have also been taking aim at Mallya. On 24 January 2017, the CBI filed a chargesheet against him and several others in connection with unpaid loans received by Kingfisher Airlines from IDBI Bank. Nine of Mallya’s co-accused in the case – including the former chairman of IDBI Yogesh Aggarwal, former IDBI deputy MD MK Batra and the former CFO of Kingfisher Airlines – have already been arrested.

    Mallya’s troubles hardly end there. The Karnataka High Court ordered the winding up of United Breweries (Holding) Ltd, the parent company of Mallya’s UB Group, for failing to fulfil its guarantees to Kingfisher Airlines’ creditors. SEBI barred Mallya from holding a directorship in any limited company and his own company has instructed him to step down.

    It seems, therefore, that the noose is tightening around the former ‘King of Good Times’. But how much has really changed with these developments? Didn’t India request Mallya’s deportation way back in April 2016 after revoking his passport? Didn’t Prime Minister Narendra Modi specifically raise the issue of extraditing Mallya and others during talks with UK Prime Minister Theresa May back in November 2016? So how close are we, really, to getting Mallya back?

    Also Read: Spoof: Vijay Mallya’s Hacked Tweets Show Demonetised B’day Plans

    (Photo: Rhythum Seth/ <b>The Quint</b>)
    (Photo: Rhythum Seth/ The Quint)
    Expand
  2. 2. Company Has a Separate Legal Personality

    Let’s begin with the elephant in the room (apart from Mallya himself, of course) – what are we trying to get him back for?

    As with all legal reporting in India, attempts to explain what the cases against Mallya are about consistently conflate the issues. As a result, when we hear Mallya’s name, we automatically assume that he is being sought because he defaulted on loans made to his companies. This, however, is not exactly true.

    Yes, India’s first attempt to bring Mallya back in April last year was a reaction to the loan defaults, but this was a pretty amateurish attempt. Not only did it overlook the fact that the UK does not deport people with valid visas even if their passports are revoked, it also overlooked the fact that the loans were not defaulted on by Mallya personally.

    A company has a separate legal personality from its shareholders – this means that the owners of a company are not automatically liable for the company’s debts. This has been something Mallya has latched on to quite aggressively when speaking to the media ever since fleeing abroad, including when interviewed by Reuters after the release of the CBI chargesheet.

    Yes, Mallya provided personal guarantees for some of the loans (which is at the heart of the case filed by the bank consortium), but these are a separate matter from the company’s liability and are being claimed by him to have been provided under duress. They are also subject to civil actions and so do not provide grounds for extradition.

    Also Read: Will Vijay Mallya Join List of 60 Indians Extradited Since 2002?

    That is also precisely why it’s a relief that the CBI’s chargesheet is not about the default of the loans at all. The criminal charges brought against Mallya by the CBI relate to alleged cheating and conspiracy in the grant of certain specific loans by IDBI to Kingfisher Airlines in 2009, and allegations that he laundered a large chunk of these loans abroad for his personal use. Mallya claims that these are politically motivated charges that have been brought only to get around the fact that he is not personally liable for the loan defaults. But the good news is that these charges can provide grounds for extradition.
    

(Photo: Rhythum Seth/ <b>The Quint</b>)
    (Photo: Rhythum Seth/ The Quint)
    Expand
  3. 3. The India UK Extradition Treaty

    India and the UK signed an extradition treaty in 1993. Under this treaty, the countries agree to extradite to the other any person on their territory who stands accused or convicted of an “extradition offence”. An extradition offence under the treaty is any conduct which is punishable by both parties with imprisonment of one year or more. Mallya has now been accused of such an offence by the CBI. So far, so good.

    Unfortunately, things aren’t quite so simple. An extradition request has to be assessed to see if any grounds for refusal exist, and the UK follows a particularly complex extradition process for countries like India. And trust us when we say this is a nightmare.

    Also Watch: Vijay Mallya Case: Manmohan, Chidambaram Dismiss BJP’s Charges

    (Photo: Rhythum Seth/ <b>The Quint)</b>
    (Photo: Rhythum Seth/ The Quint)
    Expand
  4. 4. The UK Extradition Process

    1. The UK Home Office receives the extradition request. If it finds that the request has been made in the right form and by the right authority in India, the Secretary of State will certify the request to extradite Mallya and send it to the UK courts.
    2. A UK district court will assess the information received and decide if the MEA has provided reasonable grounds to show that Mallya has committed an extradition offence. If the court agrees, it will issue an arrest warrant for him.
    3. Mallya will be arrested and brought before the court for a preliminary hearing, at which the judge will set a date for an extradition hearing. He can raise procedural objections relating to his arrest at this point.
    4. A UK district judge will conduct an extradition hearing to see if the procedural requirements under the treaty and UK law are satisfied. This would mean the judge being satisfied that Mallya’s conduct, if proved, is an offence in the UK, as well as that there is convincing evidence of his guilt. It also has to then see if extradition to India would breach his human rights.
    5. If the judge decides that all procedural requirements are satisfied and there are no legal bars to extradite Mallya, he or she must then send the case to the Secretary of State to make a decision to extradite Mallya.
    6. This very decision of the judge can be appealed by Mallya to the UK High Court, which will wait and see what the Secretary of State decides.
    7. The Secretary of State must order extradition if the district judge has sent the case to him/her, unless they believe this is barred by law. Luckily, none of the statutory prohibitions should apply to Mallya’s case. Still, he can submit reasons to the Secretary of State as to why he should not be extradited. This is where his argument that the cases against him are politically motivated and in bad faith come in, as this would be a ground for refusal to extradite under the UK-India treaty.
    8. If the Secretary of State decides that Mallya should be extradited, Mallya gets to appeal both this decision and the decision to send the case to the Secretary of State in the first place to the High Court.
    9. The High Court could overturn either or both decisions, sending us back to Step 6. Yes, really. But let’s assume it doesn’t, and that it also confirms the Secretary of State’s decision, Mallya can then appeal to the UK Supreme Court, if it feels that the case involves a point of general public importance.
    10. If the Supreme Court confirms the Secretary of State’s decision, then the Secretary of State can then begin the actual process of sending Mallya to India.

    Also Read: Deport Vijay Mallya, Says India to British High Commission

    Expand
  5. 5. Will the Charges by CBI Stand Scrutiny in UK?

    As you can see, Mallya will have at least two to three chances to challenge his extradition to India, and that’s if the UK authorities decide they want to extradite him in the first place. The CBI chargesheet is 1,000-pages long, so hopefully it includes enough evidence to convince the UK authorities. This is hardly a guarantee, as anyone who has read a CBI chargesheet will know, and the UK courts are likely to scrutinise the charges far more than a CBI court would.

    Still, let’s assume that they have done a decent job, and that the MEA has included all other relevant information from other cases against Mallya in the request. India and the UK unfortunately have a dismal record when it comes to extradition, with only one person ever extradited under the treaty.

    Samirbhai Vinubhai Patel, accused of committing crimes during the Gujarat riots, was extradited in October last year only two months after India’s request, because he didn’t challenge his extradition. The other high-profile extradition request made by India, for Dawood-aide Tiger Hanif, has been dragging on since 2010, and is still before Secretary of State Amber Rudd despite Hanif losing all legal challenges he could have mounted.

    Of course, since Mallya would not be in danger of receiving the death penalty (as Hanif is), the UK government should have less reasons to object to his extradition, provided the procedural requirements are met. It can also be argued that both governments have a common interest in making this happen. The NDA government needs to show it is actually cracking down on defaulters the way it promised in the lead up to the general election. Theresa May will be looking for goodwill to strike a solid trade deal with India to soften Brexit blues. Extradition cooperation has been a key feature of recent talks between the two countries.

    So, on the whole, the signs are positive, and we should be able to bring one of the biggest corporate defaulters the country has seen to justice. But it is probably safe to assume that Mallya will have a few more years to attend book launches at the London School of Economics, enjoy the view of Regents Park from his flat on Baker Street, and organise private F1 screenings at his mansion in Hertfordshire.

    Expand

Noose is Tightening Around Mallya

Things have really not been going well for Vijay Mallya of late. The Ministry of External Affairs submitted a formal request to the UK High Commission in New Delhi on 9 February 2017 for his extradition. Talks were held between British and Indian officials in New Delhi regarding extraditions (including Mallya’s) on 21 February 2017.

This was followed up by bullish comments by Finance Minister Arun Jaitley at the London School of Economics on 25 February 2017, in which he indicated that India was for the first time taking serious action to prevent defaulters from evading the law by settling abroad.

On [27] February 2017, the Supreme Court will hear a plea by the consortium of banks led by SBI, on whose loans the Kingfisher Airlines defaulted. The banks are asking for the recovery of money owed by the now-defunct airline from Mallya himself, on the basis of personal guarantees from the disgraced tycoon. His properties in India have already been seized by the Enforcement Directorate.

The CBI have also been taking aim at Mallya. On 24 January 2017, the CBI filed a chargesheet against him and several others in connection with unpaid loans received by Kingfisher Airlines from IDBI Bank. Nine of Mallya’s co-accused in the case – including the former chairman of IDBI Yogesh Aggarwal, former IDBI deputy MD MK Batra and the former CFO of Kingfisher Airlines – have already been arrested.

Mallya’s troubles hardly end there. The Karnataka High Court ordered the winding up of United Breweries (Holding) Ltd, the parent company of Mallya’s UB Group, for failing to fulfil its guarantees to Kingfisher Airlines’ creditors. SEBI barred Mallya from holding a directorship in any limited company and his own company has instructed him to step down.

It seems, therefore, that the noose is tightening around the former ‘King of Good Times’. But how much has really changed with these developments? Didn’t India request Mallya’s deportation way back in April 2016 after revoking his passport? Didn’t Prime Minister Narendra Modi specifically raise the issue of extraditing Mallya and others during talks with UK Prime Minister Theresa May back in November 2016? So how close are we, really, to getting Mallya back?

Also Read: Spoof: Vijay Mallya’s Hacked Tweets Show Demonetised B’day Plans

(Photo: Rhythum Seth/ <b>The Quint</b>)
(Photo: Rhythum Seth/ The Quint)

Company Has a Separate Legal Personality

Let’s begin with the elephant in the room (apart from Mallya himself, of course) – what are we trying to get him back for?

As with all legal reporting in India, attempts to explain what the cases against Mallya are about consistently conflate the issues. As a result, when we hear Mallya’s name, we automatically assume that he is being sought because he defaulted on loans made to his companies. This, however, is not exactly true.

Yes, India’s first attempt to bring Mallya back in April last year was a reaction to the loan defaults, but this was a pretty amateurish attempt. Not only did it overlook the fact that the UK does not deport people with valid visas even if their passports are revoked, it also overlooked the fact that the loans were not defaulted on by Mallya personally.

A company has a separate legal personality from its shareholders – this means that the owners of a company are not automatically liable for the company’s debts. This has been something Mallya has latched on to quite aggressively when speaking to the media ever since fleeing abroad, including when interviewed by Reuters after the release of the CBI chargesheet.

Yes, Mallya provided personal guarantees for some of the loans (which is at the heart of the case filed by the bank consortium), but these are a separate matter from the company’s liability and are being claimed by him to have been provided under duress. They are also subject to civil actions and so do not provide grounds for extradition.

Also Read: Will Vijay Mallya Join List of 60 Indians Extradited Since 2002?

That is also precisely why it’s a relief that the CBI’s chargesheet is not about the default of the loans at all. The criminal charges brought against Mallya by the CBI relate to alleged cheating and conspiracy in the grant of certain specific loans by IDBI to Kingfisher Airlines in 2009, and allegations that he laundered a large chunk of these loans abroad for his personal use. Mallya claims that these are politically motivated charges that have been brought only to get around the fact that he is not personally liable for the loan defaults. But the good news is that these charges can provide grounds for extradition.


(Photo: Rhythum Seth/ <b>The Quint</b>)
(Photo: Rhythum Seth/ The Quint)

The India UK Extradition Treaty

India and the UK signed an extradition treaty in 1993. Under this treaty, the countries agree to extradite to the other any person on their territory who stands accused or convicted of an “extradition offence”. An extradition offence under the treaty is any conduct which is punishable by both parties with imprisonment of one year or more. Mallya has now been accused of such an offence by the CBI. So far, so good.

Unfortunately, things aren’t quite so simple. An extradition request has to be assessed to see if any grounds for refusal exist, and the UK follows a particularly complex extradition process for countries like India. And trust us when we say this is a nightmare.

Also Watch: Vijay Mallya Case: Manmohan, Chidambaram Dismiss BJP’s Charges

(Photo: Rhythum Seth/ <b>The Quint)</b>
(Photo: Rhythum Seth/ The Quint)

The UK Extradition Process

  1. The UK Home Office receives the extradition request. If it finds that the request has been made in the right form and by the right authority in India, the Secretary of State will certify the request to extradite Mallya and send it to the UK courts.
  2. A UK district court will assess the information received and decide if the MEA has provided reasonable grounds to show that Mallya has committed an extradition offence. If the court agrees, it will issue an arrest warrant for him.
  3. Mallya will be arrested and brought before the court for a preliminary hearing, at which the judge will set a date for an extradition hearing. He can raise procedural objections relating to his arrest at this point.
  4. A UK district judge will conduct an extradition hearing to see if the procedural requirements under the treaty and UK law are satisfied. This would mean the judge being satisfied that Mallya’s conduct, if proved, is an offence in the UK, as well as that there is convincing evidence of his guilt. It also has to then see if extradition to India would breach his human rights.
  5. If the judge decides that all procedural requirements are satisfied and there are no legal bars to extradite Mallya, he or she must then send the case to the Secretary of State to make a decision to extradite Mallya.
  6. This very decision of the judge can be appealed by Mallya to the UK High Court, which will wait and see what the Secretary of State decides.
  7. The Secretary of State must order extradition if the district judge has sent the case to him/her, unless they believe this is barred by law. Luckily, none of the statutory prohibitions should apply to Mallya’s case. Still, he can submit reasons to the Secretary of State as to why he should not be extradited. This is where his argument that the cases against him are politically motivated and in bad faith come in, as this would be a ground for refusal to extradite under the UK-India treaty.
  8. If the Secretary of State decides that Mallya should be extradited, Mallya gets to appeal both this decision and the decision to send the case to the Secretary of State in the first place to the High Court.
  9. The High Court could overturn either or both decisions, sending us back to Step 6. Yes, really. But let’s assume it doesn’t, and that it also confirms the Secretary of State’s decision, Mallya can then appeal to the UK Supreme Court, if it feels that the case involves a point of general public importance.
  10. If the Supreme Court confirms the Secretary of State’s decision, then the Secretary of State can then begin the actual process of sending Mallya to India.

Also Read: Deport Vijay Mallya, Says India to British High Commission

Will the Charges by CBI Stand Scrutiny in UK?

As you can see, Mallya will have at least two to three chances to challenge his extradition to India, and that’s if the UK authorities decide they want to extradite him in the first place. The CBI chargesheet is 1,000-pages long, so hopefully it includes enough evidence to convince the UK authorities. This is hardly a guarantee, as anyone who has read a CBI chargesheet will know, and the UK courts are likely to scrutinise the charges far more than a CBI court would.

Still, let’s assume that they have done a decent job, and that the MEA has included all other relevant information from other cases against Mallya in the request. India and the UK unfortunately have a dismal record when it comes to extradition, with only one person ever extradited under the treaty.

Samirbhai Vinubhai Patel, accused of committing crimes during the Gujarat riots, was extradited in October last year only two months after India’s request, because he didn’t challenge his extradition. The other high-profile extradition request made by India, for Dawood-aide Tiger Hanif, has been dragging on since 2010, and is still before Secretary of State Amber Rudd despite Hanif losing all legal challenges he could have mounted.

Of course, since Mallya would not be in danger of receiving the death penalty (as Hanif is), the UK government should have less reasons to object to his extradition, provided the procedural requirements are met. It can also be argued that both governments have a common interest in making this happen. The NDA government needs to show it is actually cracking down on defaulters the way it promised in the lead up to the general election. Theresa May will be looking for goodwill to strike a solid trade deal with India to soften Brexit blues. Extradition cooperation has been a key feature of recent talks between the two countries.

So, on the whole, the signs are positive, and we should be able to bring one of the biggest corporate defaulters the country has seen to justice. But it is probably safe to assume that Mallya will have a few more years to attend book launches at the London School of Economics, enjoy the view of Regents Park from his flat on Baker Street, and organise private F1 screenings at his mansion in Hertfordshire.

(The writer is a lawyer qualified to practice in India, England and Wales and can be reached at @VakashaS. At the time of writing this piece, the writer was working with a boutique tax advisory firm in Bengaluru. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)

Also Read: Emails Show UPA-II Secretary May Have Helped Mallya Get Loans

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