Process to take over Kingfisher Villa starts

On Wednesday, the collector had issued an order in favour of the 17-banks consortium led by SBI to take physical possession of the villa

Lenders to the grounded Kingfisher Airlines on Friday started the process to take physical possession of Kingfisher Villa, which was pledged by beleaguered businessman Vijay Mallya to the bankers as collateral for over Rs 7,800-crore (Rs 78 billion) loan.

The move comes within two days of North Goa collector Neela Mohanan allowing, after a two-year delay, the application of the bankers to take over the Rs 90-crore (Rs 900 million) worth villa at Candolim in North Goa. Following this, SBI Cap Trustee Company put up a notice on the villa on Monday.

"The property is in possession of SBI Cap Company under section 13 (4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 as per the orders passed by the district magistrate of North Goa," says the notice put up on the villa on Friday.

The district administration officials also visited the villa this afternoon along with SBI Cap officials.

On Wednesday, the collector had issued an order in favour of the 17-banks consortium led by SBI to take physical possession of the villa.

The villa used to be Mallya's base in Goa and also the venue of his many parties. Representing the bankers' consortium, SBI Caps had sought physical possession of the property under Section 14 of the Sarfaesi Act in late 2014.

But three of Mallya's companies -- United Spirits, Kingfisher Airlines and United Breweries -- had objected to the move. Last week, media reports had said Mallya put up a "villa manager" as a caretaker to thwart the banks' attempt to take it over.

The villa was mortgaged to the lenders while obtaining loans for the now defunct airliner, but the caretaker, who claimed to be an employee of United Breweries, and the subsequent establishment of tenancy rights would have made it difficult for the banks to take over the property According to reports, the bankers' attempts to take possession of the villa were repeatedly stalled by USL, which claims the first right to buy the property as it is a tenant.

USL had also approached a local court, citing provisions in the Portuguese Civil Code to block auction of the property in the past. There was a delay on part of the collector in allowing takeover of the property, which made SBI Cap approach the Goa bench of Bombay high court.

The bench then granted three months to the collector to complete the hearing of application filed by the consortium of banks seeking possession of the villa.

So far, the banks have recovered over Rs 1,240 crore (Rs 12.4 billion) by selling shares and collaterals and over Rs 1,200 crore (Rs 12 billion) is blocked in escrow accounts at Debt Recovery Tribunal, Bengaluru and the Karnataka high court.

Mallya had told the Supreme Court last month that he was ready to repay up to Rs 6,800 crore (Rs 68 billion) of the total dues of over Rs 9,430 crore (Rs 94.3 billion).

Last month, the consortium of banks had failed in its attempt to sell the airlines' erstwhile headquarters Kingfisher House in Mumbai because of the high reserve price of Rs 150 crore (Rs 1.5 billion). Attempts to sell the Kingfisher brands and associated trademarks carrying a reserve price of Rs 367 crore (Rs 3.67 billion) had also found no takers.

Mallya left the country on March 2 for London.

Earlier this week, the government asked Britain to deport Mallya, citing the revocation of his passport and a non-bailable warrant against him.

Image: The exterior view of Kingfisher Villa. Photograph: Reuters