A State Bank of India-led consortium has told the Bombay High Court that Vijay Mallya still owes Rs 8,752 crore, rejecting his claim that his debt is settled. While banks have recovered Rs 10,270 crore, they argue that unpaid interest and legal costs remain high. This long-standing legal battle over legacy bad loans is set for another hearing on October 13, 2026.
The legal dispute involving the defunct Kingfisher Airlines has seen a fresh development in the Bombay High Court. A consortium of lenders, led by the State Bank of India (SBI), has filed an affidavit clarifying that approximately Rs 8,752 crore remains recoverable from Vijay Mallya as of August 31, 2026. This submission serves as a formal rebuttal to Mallya’s claims that his financial obligations have been fully met because total bank recoveries have already surpassed his original debt amount.
The Dispute Over Recovery Figures
While the Debt Recovery Officer has successfully reclaimed Rs 10,270 crore to date, the gap in figures arises from a disagreement over the final liability. The banking consortium argues that the recovery amount does not account for accrued interest and the significant legal costs incurred during years of litigation. From the banks' perspective, the debt resolution process is not complete until these additional costs are factored into the final tally.
For investors and market observers, this case is a significant example of the long, complex process required to recover funds from legacy bad loans. It serves as a reminder that for major public sector banks, the resolution of large non-performing assets often involves multi-year legal struggles that can extend well beyond the simple recovery of the initial principal amount.
Criminal vs. Civil Proceedings
The Enforcement Directorate (ED) continues to maintain a strict stance alongside the civil recovery process. The agency has informed the court that asset recovery under the Prevention of Money Laundering Act (PMLA) is intended for restitution and does not override or end the ongoing criminal proceedings related to bank fraud and conspiracy.
This means the legal battle for the banking consortium is running on two separate paths: the civil fight to recover outstanding funds and the federal investigation into the original collapse of Kingfisher Airlines. Mallya’s attempts to use civil recovery milestones to dismiss criminal charges have faced consistent opposition from both the lenders and the federal investigation agency.
The Bombay High Court is scheduled to resume hearings on October 13, 2026. Investors may track this timeline to see how the court approaches the definition of a 'fully settled' debt and whether this brings any clarity to the final stages of the long-running recovery effort.