Mallya's passport suspended; ED seeks warrant

India on Friday suspended the diplomatic passport of industrialist Vijay Mallya for a period of four weeks. It asked Mallya to respond within a week why his passport should not be revoked. Mallya is currently in the United Kingdom even as banks are trying to recover around Rs 9,400 crore that his Kingfisher Airlines owes them.

Mallya, 60, left India on March 2 and since then has defied requests asking him to return for interrogation in a money laundering case being probed by the Enforcement Directorate (ED). The probe agency had issued notices to Mallya on March 18, April 2 and April 9 for his personal appearance to join the investigation. The ED also moved the special PMLA (Prevention of Money Laundering Act) court seeking a non-bailable warrant against Mallya in connection with the money laundering probe in the IDBI loan fraud case. The hearing is likely to take place on Saturday.

The move to suspend Mallya’s passport, sources said, was meant to send a message that the government was committed to bringing wilful defaulters to book and recovering public money from them. The move also stems from the government’s concern that the issue of loan defaulters has the potential to become a political hot potato for the Narendra Modi government when Parliament meets for the second part of the Budget session from April 25.

The PM, although without referring to Mallya by name, has repeatedly brought up the issue in recent election rallies. Modi, at an address to the Indian Diaspora in Belgium last month, warned Mallya by saying “no one who has looted money from Indian banks will be spared”.

Ministry of External Affairs spokesperson Vikas Swarup said the ministry’s ‘Passport Issuing Authority’ suspended Mallya’s diplomatic passport, which he enjoys as he is a Rajya Sabha member, with immediate effect on the ED’s advice.

He said the passport has been suspended for four weeks under section 10 A of the Passports Act, 1967. “Mr Mallya has been asked to respond within a week as to why his passport should not be impounded or revoked under section 10(3)(c) of the Passports Act, 1967,” Swarup said.

WHAT HAPPENS NOW
  • Vijay Mallya holds a diplomatic passport by virtue of being a Rajya Sabha member
  • According to rules, his ordinary passport is kept in govt custody
  • Passport suspended for four weeks under Section 10 (3) (c) of Passports Act, 1967
  • Once his passport is cancelled, Mallya will lose the right to live in any other country or travel outside India
  • After cancellation, CBI can ask Interpol to issue notice for Mallya’s arrest
  • Under the Passports Act, Mallya has the right to appeal to an appellate authority but within prescribed time limit
Sources: passportindia.gov.in, cbi.gov.in

He said if Mallya “fails to respond within the stipulated time, it will be assumed that he has no response to offer and the MEA will go ahead with the revocation.” The move will force Mallya to return and cooperate, a senior official of ED told Business Standard. However, the Passports Act states that any person aggrieved by an order of the passport authority can appeal against this to an appellate authority. In 2012, the UPA government had revoked the passport of former Indian Premier League Commissioner Lalit Modi, who was then being investigated by the ED. However, he moved court and his passport was restored in 2015 with the court finding the reasons for revocation insufficient. In his tweets, Mallya has continued to claim that he is not an absconder. A group of 13 banks have till now rejected offers from Mallya for negotiations, including an offer to pay Rs 4,000 crore to the lenders by September and another Rs 2,000 crore if Kingfisher wins a lawsuit.

The banks had moved the Debt Recovery Tribunal and asked the Supreme Court on March 2 to stop Mallya from travelling abroad. However, it was found that Mallya had already left for London, but was in Parliament marking his attendance only the previous day. ED sources said the passport was suspended because Mallya “stopped cooperating with investigators”.

The enforcement agency hinted earlier that no further summons would be issued to Mallya and they are examining the legal options under anti-money laundering norms. In addition, the ED has initiated the process of issuing Letter Rogatory (LR) to South Africa and United Kingdom (UK) for assistance in the case. LR is a formal request from an Indian court to a foreign court for judicial assistance.

“We are working on the contents of LR, which would be sent to Ministry of External Affairs (MEA) for clearance. It would be sent to the respective countries to get details of Mallya’s foreign bank accounts, financial transactions and its properties etc,” said an ED source.

While the loans issue is being investigated by the Central Bureau of Investigation (CBI) on charges of criminal misappropriation, criminal conspiracy and under the Prevention of Corruption Act, the Serious Fraud Investigation Office is probing violations under the Companies Act and the ED under the Prevention of Money Laundering Act (PMLA).


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