Zee Media Bureau
New Delhi: The Delhi High Court on Thursday allowed lawyers to represent Kingfisher Airlines before Punjab National Bank Committee in proceedings on whether to declare the airline as wilful defaulter.
The Vijay Mallya-promoted airline, which has not been flying from October 2012, moved the high court against the bank on Wednesday. The bank had sent a notice to the airline 21 August 2014 alleging the carrier has wilfully defaulted in payment of outstanding dues of over Rs 770 crore.
The public sector bank also said in notice that if no reply is received within seven days then the airline and its guarantors, United Breweries (Holdings) Ltd (UBHL) and Vijay Mallya would be declared “wilful defaulters”.
A wilful defaulter, in banking lexicon, would mean that a company or an individual, who chooses not to pay back money borrowed to banks, not necessarily because they don’t’ have any, but wouldn't do so deliberately. In some cases, this is even done with an intention to fool the banks and the financial system.
The company owes about Rs 7,500 crore of loans to several state-run banks, including country’s largest lender, State Bank of India (SBI). Among the bankers, SBI has the majority exposure to Kingfisher, over Rs1,500 crore.
