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SBI-led consortium moves to DRT ahead of Vijay Mallya’s corporate jet auction

A file photo of Airbus A319. Photo: Reuters

A file photo of Airbus A319. Photo: Reuters

Bengaluru/Mumbai: Vijay Mallya’s corporate jet has been put up for auction by the service tax department, but the banks that lent to his airline want the money first.

Lenders to Kingfisher Airlines Ltd, led by India’s largest lender State Bank of India, on Wednesday filed an application before the debt recovery tribunal (DRT) in Bengaluru, ahead of the auction scheduled for 12 and 13 May.

A lawyer representing lenders in a deposition before the presiding officer of the DRT requested the attachment of all the proceeds of the auction.

The move is part of the consortium’s efforts to recover money from the industrialist, whose grounded airline owes Rs.9,000 crore to the group. Last week, the group rejected Mallya’s offer to pay Rs.4,000 crore to settle outstanding dues.

The service tax department plans to auction Mallya’s jet to recover at least Rs.500 crore. It released an advertisement in late March for the sale of the jet, whose registration number famously bore his initials, VT-VJM.

As per Directorate-General of Civil Aviation (DGCA) records, the Airbus A319-133ACJ (Airbus Corporate Jet) aircraft was registered on 29 November 2006. The owner of the aircraft, it said, was CJ Leasing (Cayman) Ltd, located in Walker House, 87 Mary Street, George Town, KY1-9002, Grand Cayman. The aircraft was operated by Kingfisher Airlines then.

The ad describes the aircraft as “a corporate jet having 25 passenger seating capacity and six crew seating capacity exclusively designed for exotic and luxurious use.”

The aircraft, which has been grounded for more than 18 months, is currently parked at the Chhatrapati Shivaji International Airport in Mumbai. An Airbus A319 aircraft with a standard specification has a current list price of around $88 million. The aircraft was custom-made according to Mallya’s taste, sporting paintings and pictures of Lord Balaji.

All creditors to Kingfisher have moved various courts to recover dues owed to them. Last month, the tribunal blocked him from getting his hands on a $75 million payout by Diageo Plc, responding to another application by the SBI-led group of creditors.