Default of loan repayment by vijay mallya led companies

[Bijay Shrestha]

Dear friends,

As we all know that Liquor Baron Vijay Mallya led Companies defualted in repayment of ₹ 9000 Crore to various banks. Now those banks are trying hard to get him arrested and recover their dues either by selling his properties and others.

Now my doubt is If the Company has defaulted in repayments, then shareholders liability cannot exceed the amount attributable to them from the Company i.e. limited liability. How can the Banks recover from his personal assets ?

Also what is the legal provisions behind this and behind his arrest ?

Please suggest.

P.S. It is only for knowledge purpose.

[DR.MARIAPPAN GOVINDARAJAN]

The bank can take over the assets as per SARFAESI Act and sell it and recover the sale proceeds.

[Bijay Shrestha]

Thank you MARIAPPAN GOVINDARAJAN Sir.

One more thing, is this because Vijay Mallya has given personal guarantee in respect of those loans so that the banks can recover the same from his personal assets ?

AI Summary

Limited liability does not prevent recovery from personal assets where personal guarantees or enforcement under SARFAESI apply. Banks moved to enforce security and realise assets after company loan defaults; limited liability restricts shareholder exposure, but creditors can pursue personal assets if promoters gave personal guarantees or where loans are secured, and statutory enforcement under SARFAESI permits taking possession and sale of charged assets.