NATIONAL COMPANY LAW

TRIBUNAL

Government of India
Vs
Mr. VINAY KALLYA
S. No. CHARGES JUSTIFICSTION
1 Conspiracy to Defraud Mr. Kallya and other executive at KFA is said to have
S.17 Indian Contract Act,1872 conspired with the Chairman Mr. Agarwal and others at
S.447 Companies Act,2013 IDBI Bank by causing IDBI to sanction and disburse loans
to KFA with the intention of not repaying the said loans as
agreed and required. It was said they were able to do this by
supplying the bank with the false information about KFA’s
profitability and by permitting the bank to rely on false
information in respect of the value and availability of
securities to be relied on by the bank.
2 Misrepresentation Mr. Kallya is said to have dishonestly made representations
S.18 Indian Contract Act,1872 to the bank which he knew were or might be untrue or
misleading by supplying false information to the bank in
respect of profitability and the value and availability of
securities ton be relied on by the bank, intending to make a
gain on himself or to cause loss to the bank. By doing so he
obtain the loans which were not then spent on what they
should have been spent on.
3 Cheating It was claimed by CBI that they have found oral and
S.420 Indian Penal Code,1860 documentary evidence to show Mr. Vinay Kallya’s intention
Criminal Conspiracy to cheat the bank. Moreover, as for the criminal conspiracy,
S.120(b) Indian Penal Code,1860 Mr. Kallya along with the executives of the IDBI bank
read with S.34 conspires to misrepresents the facts with a common
intention to defraud and make money through the loan
transactions which they would use for their personal gains
or benefits.
4 Criminal Misconduct by Public Servant Mr. Kallya defraud the public sector banks under
S.13(1)(d) , 13(2) Prevention of Prevention of Corruption Act. The ED and CBI has
Corruption Act,1988. alleged Kalia that the now defunct Kingfisher
Airlines “diverted” at least Rs. 3,547 cr. of the loan
that it received.

5 Fugitive Economic Offender Mr. Vinay is declared FEO as an loan default

S.12 Fugitive Economic Offender warrant was issued against him for specified
Act,2018 offences filed by both ED and CBI for alleged loan
default against him of about 9000 crore.
6 Criminal breach of trust In March 2006, Retirement fund body Employees
S.405 India Penal Code,1860 provident fund organization (EPFO) formed
enforcement square and found anomalies and
irregularities in provident fund dues to KF’s
employees

7 Diversion Of Loan Funds .ED charged Mr. Kallya of alleged diversion of loan
Under Banking Regulation Act, 2004 and funds by lenders: 1. the diversion of Rs.3432.40 cr
Breach of Trust under IPC,1860 through “over invoicing” of lease rentals of aircraft
between April 2008 and March 2012;
2. Diversion of Rs. 45.42 cr. For making payment
towards the rental lease of a corporate chat which
was exclusively used by Kallya.
3. The diversion of Rs. 15.90 cr. From KFA to
8. Money Laundering Mr. Vinay Kallya attempts to indulge in a process
S.3,4 Prevention of Money connected with proceeds of crime shall be guilty of
Laundering Act,2002 offence of money laundering and be punishable with
rigorous imprisonment for a term not less than 3 years
which makes extend to 7 years and shall be liable to
fine which may extend to 5 lakhs rupees.
9. Malicious intention of Sale proceeds from the property of defaulter Vinay
proceeding will be distributed among all claimants. The ED from
S.65 Insolvency and Bankruptcy the order of special PMLA court has seized his
Code property of 12,500Cr out of which has recovered
963Cr from auction of his Indian Assets
10. Dishonouring of Cheque A cheque bouncing case was filed against him by
S. 138 0f Negotiable Instrument GMR Hyderabad International Airport Ltd. As result
Act, 1881 Kallya, Kingfisher and senior officials of the airlines
convicted under the same.
11. Extradition After taking cognizance of offence Special Judge
Part 2 of the Extradition Act, 2003 ,CBI cases issued a fresh NBW dated 31 st January
(includes the territory of India) 2017 against Vinay Kallya which was forwarded to
the UK authorities by MHA on 09.02.2019. Request
lead to initiation of extradition process against the
fugitive in April 2017 under the India- UK Mutual
Legal Assistance Treaty (MLAT).
12 Proclaimed Offender He did not appear before the bench as
S.82 Criminal Procedure Code, asked by the court and wilfully neglects
the orders and commands as given by the
court. Moreover, Mr. Kallya absconds or
conceals himself so that the warrant issued
by the court cannot be executed.
13 Tax evasion In 2011 and 2012 the service tax
S.140A(1) and S.142(1) or 143(2) department had issued a notice to KFA for
of Income Tax Act,1961. dues of Rs 87.5 Cr, which the airline had
likely collected from passengers but not
deposited with the department. Further
the Income Tax department had moved to
the Karnataka high court in2013 seeking
dues Amounting to Rs325 Cr owned by
KFA related to three fiscal years 2009 to
2012. And also the department alleged
that tax deducted at source (TDS) from
employees during these years was not
deposited with it.
 REFFERED CASES
1. NIRAV MODI CASE :
Nirav Modi was referred to as ‘ jewelers to the stars’. The Punjab National Bank filed a
complaint against Modi alleging the man had conspired with two of its staff to defraud the
bank of nearly $43 Million. After CBI’s investigation it was disclosed that the fraud was closer
to 2 Million. Modi fled India before the scandal broke. As a result of the fraud, The Reserve
Bank of India(RBI) discontinued the acceptance and issuances of LoUs. The RBI also ordered
Indian Financial Institutes to integrate the SWIFT network with their central information
system. As of now Nirav Modi is still considered a fugitive.

2. BHUSHAN POWER & STEEL LTD

Punjab National Bank (PNB) reported a fraud worth Rs 3805.15 crore by Bhushan Power&
Steel. After PNB, another state-owned lender Allahabad Bank reported a fraud of over
Rs17724 crore by Bhushan Power & Steel to the RBI. It has been observed that the company
misappropriated bank funds and manipulated books of accounts to raise funds from the
consortium of banks.

3. ROBERT VADRA CASE:

Robert Vadra has been ale gated of being associated with arms dealer Sanjay Bhandari and
having various illegal foreign asset. Vadra allegedly laundered money and brought London-
based property at 12,Bryan Ston Square worth GBP 1.9 million(British pounds). This includes
two houses, one worth 5 million GBP and other valued 4 million GBP, 6 other flats and more
property.
4. Jay Lakshmi Natraj Vs Jeena & company 1996
The Managing Director of a company accused under S.138 of NI
Act was held guilt notwithstanding her plea that she did
not participate in the day to day administration of the company
and was not aware of its affair. The same was seen in our case Mr.
Vinay is trying to separate his name from the company.
 CURRENT SENARIO OF THE CASE:

ED has detected Dummy Firms linked to the liquor baron with the turnover of over
Rs. 220 cr. The Ed raided the residential and business premises of V Shashikant
(former MD of UBHL and close associate of Mr. Kalia in Bangalore). The ED, which
is probing Kalia under PMLA Act, has revealed that UBHL was holding 10.72%
shares of UBL and was exporting Kingfisher Beer, and shoes manufactured by UB
international Trading Ltd.
 Submitted by:

Aastha Tiwari

Anjali Hirwani

Ashmita Gupta

Bhavya Tewari

Kratika Dwivedi

Meghna Upadhyay

Richa Patel

Shiva Shreshtha

Payal Goel

BBA LL.B 5TH YEAR