The Enforcement Directorate has clarified to the Bombay High Court that recovering funds for banks does not stop the money laundering case against Vijay Mallya. Although an SBI-led consortium has recovered over ₹14,000 crore, the agency maintains that criminal proceedings remain active, as the former businessman continues to be a proclaimed offender.
The Enforcement Directorate (ED) has formally submitted an affidavit to the Bombay High Court, clarifying the legal status of the ongoing investigation into Vijay Mallya. The agency emphasized that the civil recovery of debts by a consortium of banks, led by the State Bank of India (SBI), does not result in the closure of criminal charges under the Prevention of Money Laundering Act (PMLA).
The central issue rests on the distinction between civil recovery and criminal liability. An SBI-led consortium has successfully recovered approximately ₹14,131.6 crore through the sale and disposal of assets that were previously attached by agencies. This process is essentially a mechanism for lenders to mitigate their losses after the collapse of Kingfisher Airlines. However, the ED argues that this financial settlement does not equate to an acquittal or a valid reason to drop the criminal prosecution related to the alleged misappropriation of funds.
The ED's stance is that PMLA proceedings are independent of the civil debt recovery process. According to the agency, allowing the closure of criminal cases simply because lenders have been repaid would undermine the specific intent of money laundering legislation. The agency maintains that the criminal investigation, which stems from allegations of siphoning off at least ₹3,500 crore from loan amounts, must follow its own legal course.
From a market and banking perspective, the recovery of ₹14,131.6 crore is significant for the participating lenders, as it directly impacts their bad loan or non-performing asset (NPA) records. For investors, it is important to note that while the financial aspect of the debt is being addressed through asset liquidation, the legal and regulatory aspect of the money laundering case remains entirely separate.
Vijay Mallya has been classified as a proclaimed offender since November 2016 and remains outside the jurisdiction of Indian courts. The ED’s recent filing serves as a rebuttal to arguments suggesting that the debt settlement should serve as grounds to terminate the criminal proceedings. As the legal battle continues, the primary monitorable for the market will be any further court orders regarding the status of the criminal trial and the final resolution of the legal proceedings against the former businessman.