Vijay Mallya, the founder of the now‑defunct Kingfisher Airlines and former chairman of United Breweries Group, faces a renewed financial showdown with a consortium of banks led by the State Bank of India (SBI). In an affidavit submitted to the High Court, the lenders assert that as of August 31, Mallya’s unpaid liability amounts to Rs 8,751.86 crore, a figure that starkly contrasts with the businessman’s own contention that the banks have already recovered more than the original debt.
Background of the dispute
The controversy dates back to 2020, when Mallya approached the High Court seeking dismissal of criminal cases filed against him. In his petition, he argued that the dispute with the banks had been settled because the lenders had fully recovered their dues. The Enforcement Directorate (ED) subsequently entered its response, and the court, in a recent order, directed SBI to file an affidavit addressing Mallya’s plea.
The matter is slated for further hearing on October 13. The current affidavit forms part of the court’s proceedings on Mallya’s request to quash a money‑laundering case under the Prevention of Money Laundering Act (PMLA). The consortium of lenders, which includes SBI and other financial institutions, has opposed the plea, describing the criminal application that challenges a December 31, 2019 order as “misconceived” and urging its dismissal.
Bank recoveries and outstanding debt
According to the affidavit, the debt recovery officer attached to the case reported a “temporary” recovery of Rs 10,270 crore, a sum backed by a bond undertaking from the consortium. In addition, the banks recovered Rs 544.58 crore before filing a suit in the Debt Recovery Tribunal (DRT). At the time of an earlier affidavit filed in January 2026, the lenders indicated that Rs 8,135.63 crore remained recoverable, excluding legal and other costs.
Subsequent calculations presented in the latest filing show that the outstanding amount has risen to Rs 8,751.86 crore as of the end of August, again excluding legal and other expenses. The increase reflects the banks’ assessment that earlier recoveries do not fully offset the total liability. The disclosure is significant because Mallya has repeatedly told the court that the consortium has already recovered more than the amount originally due.
The banks also informed the court that certain shares attached in the case remain intact and have not been sold, indicating that asset attachment continues to be part of the recovery strategy.
Legal proceedings and the ED’s stance
The dispute runs on two parallel tracks: civil recovery of bank dues and criminal prosecution for alleged financial misconduct. While the banks have pursued recovery through the DRT and by seeking sale or restitution of attached assets, the ED and the Central Bureau of Investigation (CBI) have advanced separate cases alleging bank fraud, criminal conspiracy, and money laundering linked to loans extended to Kingfisher Airlines.
The ED has reported that assets worth about Rs 14,132 crore have been restored to SBI. However, the agency maintains that such civil recoveries do not automatically extinguish pending criminal proceedings under the PMLA. In a written reply, the ED emphasized that the restoration of assets under Section 8(8) of the PMLA is a statutory mechanism for restitution to a claimant with a legitimate interest, and it does not, by itself, determine the existence of a scheduled offence or the offence of money laundering. Consequently, the agency argues that the subsequent recovery of assets cannot be interpreted as extinguishing or rendering infructuous the ongoing PMLA proceedings.
Mallya, declared a fugitive economic offender in 2019, continues to argue that the lenders’ recoveries exceed the original decreed debt and therefore seeks closure of all proceedings against him. The latest affidavit from the SBI‑led consortium effectively puts its position on record, stating that the recoveries already made do not eliminate Mallya’s outstanding liabilities.
The High Court’s upcoming hearing on October 13 will determine whether Mallya’s plea to quash the money‑laundering case can proceed, and it will also consider the banks’ detailed financial statements that underline the remaining debt. The outcome will have implications not only for Mallya’s personal legal standing but also for the broader framework of how large‑scale corporate defaults are resolved in India’s banking and criminal justice systems.
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