Business News
Vijay Mallya extradition case: Despite India’s best efforts, chances of tycoon facing justice in India is virtually nil
Outside the Westminster Magistrates’ Court in London on Monday where his extradition trial is being held, a nattily dressed Vijay Mallya — in a pin-striped suit, manicured beard, neatly set hair and gold-rimmed glasses — met the thrusting booms of Indian TV channels with studied nonchalance and swagger.
He refused to answer any of the tens of questions thrown at him beyond mentioning that “all his submissions were with the court” and then lit up a cigar. The liquor baron clearly hasn’t exhausted all his good times.
It is evident that the fallen tycoon, a former member of the Upper House of Indian Parliament, feels confident that he won’t have to face extradition from the UK, despite intense media scrutiny and the Indian government’s painstaking efforts. Mallya’s faith isn’t misplaced. India has very little chance of getting him back.
If Mallya evades extradition, it won’t certainly be due to lack of labour on India’s part, however. Mark Summers QC of Britain’s Crown Prosecution Service, acting on India’s behalf, tried to vehemently build an argument on the opening day of the extradition hearing that this wasn’t a case of business decisions gone bad — as the tycoon has argued — but fraudery, mala fide intent and cheating the Indian public, and therefore Mallya must be extradited to stand trial in Indian courts.
The prosecution’s attempt during the day-long hearing on Monday was to show that Mallya tried to deflect the losses incurred by his Kingfisher Airlines to public-owned banks, misled the banks into repeatedly giving him loans, and broke the loan agreements to use the funds for personal benefits.
Arguing that there are good enough reasons for the court to conclude that Mallya and his beleaguered airline had no intention of repaying the loan, Summers told the court: “His company was in intensive care and it was going to sustain huge losses.
The defendant had a choice: either take those losses yourself and impinge on your lifestyle, or try to palm them off on to your bank”.Citing a specific case of IDBI Bank which granted the tycoon an amount of Rs 900 crore in three installments, the CPS highlighted how Mallya and his Kingfisher Airlines had deceived the bank during loan applications by showing inflated brand value.
Part of the loan amount was diverted towards paying the rent for a ‘corporate jet’ used “exclusively” by Mallya and friends; part was consumed as personal cash, and part of the IDBI loan in contravention of agreements was used to meet tax obligations, repayment of debts of other banks so that he may open up still more lines of credit. Eventually, some of the funds were funneled to his motor racing team.
Summers told the court that when a consortium of banks pressed Mallya hard to retrieve loans totaling Rs 2,000 crore, “rather than honestly honour his debts he squirrelled away $40 million in trusts for his children”, including the $40 million that the tycoon had received from liquor giants Diageo Plc as part of deal, according to a report in The Hindu.
Now, if chief magistrate Emma Arbuthnot has only to decide whether there is enough evidence to send Mallya back to India to face trial, it may appear that the weight of evidence against him is overwhelming and it is only a matter of time before the flamboyant tycoon lands on Indian shores. The reality is more complex.
Mallya’s defence is built on a three-pronged argument that seeks to tap into India’s past record in extradition cases, structural lacunas and gaps in prosecution’s arguments.
According to Reutersreport which cites a “written document” prepared by the defence team led by Clare Montgomery QC, Mallya will request the court to reject the extradition request “because of a lack of evidence, the ‘abusive origins’ of the case, the impossibility of a fair trial in India and detention conditions there being incompatible with British human rights laws.”
The document further claims that the case against Mallya was motivated by a “populist and misguided sentiment”, that the liquor baron has been victimised as an embodiment of “capitalism’s evils”, and Indian politicians “of every stripe” want to make an example of him to quell widespread anger over the country’s huge bad debt problem in PSU banks.
The arguments immediately focus on two grey areas of the UK-India extradition treaty. One, under Article 2 of the treaty signed in 1992, “extradition can take place only if the offence is punishable under laws of both countries by at least one year,” and it is not clear whether the charges of financial misdemeanor or even diversion of loans fall under that legal provision, as Prasun Sonwalkar points out in Hindustan Times.
Second, Mallya’s attempt is to show that the charges against him are politically motivated, and hence benefit from the treaty provision that prevents extradition requests of a political nature. Even if it doesn’t fall within that provision, getting a person extradited in a civil suit is way more difficult than in criminal cases — more so when we are talking about India, which has a dismal record in extradition cases.
In the 25 years of the existence of an extradition treaty with the UK, India has been successful only once in getting a fugitive extradited. Economic Times, citing data from a data mining website, reports that India’s success rate at extradition stands at 36 percent over 15 years, and most of the successful cases involve murder-related offences or crimes of similar nature and terrorism-related offences.
In October, the British magistrates’ court where Mallya’s extradition case is being heard, rejected two Indian requests — one involving UK-based bookie Sanjeev Chawla and a British-Indian couple. Interestingly, Judge Arburthnot, who is also presiding over the Mallya case, had ruled against India in one of these cases, according to a News18report.
Though the Indian government, in anticipation of the human rights angle, has already given a “sovereign assurance” (read here) that Mallya will be kept inside Aurthur Road jail in Mumbai and treated with the best practices of human rights in consonance with European standards — even going to the length of sending pictures of jail premises and expressing willingness to be inspected by international human rights bodies — it remains to be seen if the British court is impressed.
Even if Mallya does lose the case here, he still has the security of Britain’s multi-layered appeals process before the actual extradition takes place. The effective chance of seeing him back in India, therefore, is close to nil.
