HC admits 2nd winding-up petition against KFA

 B S Antonita Madonna  |  Bangalore  January 18, 2014 Last Updated at 00:46 IST

At Rs 1,600 crore, SBI has the largest exposure to the grounded carrier among banks


After United Breweries Holdings Limited (UBHL), a second winding-up petition has been admitted in the high court here against Vijay Mallya’s grounded carrier Kingfisher Airlines Limited (KFA).

Ananda Byrareddy admitted the petition by a consortium of banks, led by the State Bank of India (SBI) on Friday, a  month after a similar petition was admitted from the UK-based engine service provider, Aerotron.

The news comes a day after Mallya had been summoned by the Delhi high court to appear on February 14 in a case by Delhi International Airport Ltd (DIAL) on bounced cheques of Rs 1 crore from Kingfisher. The company said, "We always comply with the law and judicial orders."

Mallya was summoned by the Karnataka high court in September last year on non-payment of dues to creditors, but failed to make an appearance.

Besides DIAL and Bangalore International Airport, Kingfisher has defaulted on loans to the income-tax department, vendors and lessors and several public sector banks. At Rs 1,600 crore, SBI has the largest exposure to the carrier among banks. Aerotron has sued the airline for $6-million (Rs 35 crore) dues.

Noting the airlines had not opposed or responded to valid notices from the creditors claiming the company was commercially insolvent and, hence, unable to pay its dues, the judge on Friday determined the claim of the consortium of banks "bona fide" and prima facie admitted the petition. Kingfisher has total dues of Rs 7,400 crore to its creditors.

Mallya said the company was in talks with an unidentified investor to revive the airline and has repeatedly requested the courts for more time to pay its creditors and employees.  On Friday, the counsel for the airline again requested for additional time to provide details on the progress on the claimed investment into the airline, despite the due-diligence process being completed.

“The entire process has been under cover and nobody knows what is going on. The investor may or may not take this up,” the judge said.

The court has directed the company to provide an update on the matter by March 7, failing which an advertisement would be published in newspapers detailing the admittance of the wind-up petition. Following the publication, other creditors to the airline can approach the court staking their claims to dues from the airline.


Two similar petitions have been admitted by the court against UBHL, filed by BNP Paribas and Avions de Transport Regional, part of a group of five lenders fighting for dues of Rs 600 crore.