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White Black Legal – International Law Journal · ISSN 2581-8503
The King of Good Times and the Long Arm of the Law: Wilful Default, Extradition and the Limits of the Fugitive Economic Offenders Act, 2018
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Abstract
THE
KING OF GOOD TIMES AND THE LONG ARM OF THE LAW: WILFUL DEFAULT, EXTRADITION AND
THE LIMITS OF THE FUGITIVE ECONOMIC OFFENDERS ACT, 2018
AUTHORED
BY - SHREYA KUMARI & SAGAR GAUTAM
Abstract
Greed
has a way of dissolving the line between what a person has earned and what a
person has simply taken. The Sanskrit precept of asteya — abstention
from stealing — treats that line as a moral absolute. The pursuit of Vijay
Mallya is a study in how readily wealth, reputation and political access can
blur it in practice, and in how poorly the law is equipped to redraw it once an
offender has left the jurisdiction. This paper traces India's decade-long
effort to recover from, and prosecute, the promoter of Kingfisher Airlines, and
treats that effort as a diagnostic exercise. Its central claim is that the
Kingfisher collapse exposed not one failure but four: lending advanced against
reputation rather than security; supervision that did not follow the money once
it was disbursed; a recovery architecture that could not reach assets held
abroad; and an extradition framework unequal to a well-resourced litigant. The
paper then asks whether the Fugitive Economic Offenders Act, 2018 — legislation
conceived in the shadow of this very case — has answered any of those failures,
and concludes that its reach is considerably narrower than its rhetoric. It
also examines two features of the contemporary fugitive's toolkit that the
statute does not address at all: the reputational campaign conducted through
podcasts and social media, and the argument that repayment ought to extinguish
criminality. The paper closes with reform proposals directed at the points
where Indian law is weakest, namely cross-border enforcement, end-use
supervision, and accountability inside the lending institutions themselves.
Keywords
— wilful default; extradition; fugitive economic offender; Kingfisher Airlines;
asset recovery; Debt Recovery Tribunal.
1. Introduction
When
Kingfisher Airlines stopped flying in October 2012 it left behind unpaid dues
of roughly nine thousand crore rupees, several thousand employees who had gone
months without wages, and a chairman whose personal expenditure had not visibly
contracted. That juxtaposition — a company unable to meet payroll alongside a
proprietor whose lifestyle continued undisturbed — is what turned an ordinary
corporate failure into a national grievance. Loan defaults are common enough in
Indian banking; Kingfisher's became a cause because it could not be squared
with the image its promoter went on projecting.
Vijay
Mallya was not an obscure borrower. He had inherited and then considerably
expanded the United Breweries Group, sat in the Rajya Sabha as a member from
Karnataka, owned an Indian Premier League franchise and a Formula One team, and
had built a personal brand on conspicuous consumption. That visibility worked
in both directions. It helped him obtain credit on terms a less celebrated
borrower would never have secured, and it later ensured that every rupee of his
spending was read as a rupee withheld from Kingfisher's creditors and staff.
The
litigation proper begins in early 2016. A consortium of lenders led by the
State Bank of India moved the Supreme Court for orders restraining Mallya from
leaving India. By the time the Court took up the question, the Attorney-General
informed it that he had already flown to the United Kingdom on 2 March 2016.[1]
Everything that followed — extradition proceedings through three levels of
English courts, contempt proceedings before the Supreme Court, insolvency
litigation in London, and confiscation proceedings in Mumbai — has been
conducted with the principal respondent outside the jurisdiction. That single
fact has shaped the outcome more than any doctrinal question in the case.
Parliament's
answer was the Fugitive Economic Offenders Act, 2018,[2]
and Mallya became the first person declared a fugitive economic offender under
it in January 2019.[3] The statute is often
described as the legislative legacy of the Kingfisher scandal. This paper asks
whether that legacy is as substantial as the description suggests. The argument
advanced here is that it is not, because almost every failure the collapse
exposed occurred upstream of the moment the offender boarded a flight. A
statute that operates only after departure addresses the symptom and leaves the
disease untouched.
There
is a further dimension that the 2018 Act does not contemplate at all. The
modern economic offender does not merely litigate; he campaigns. Long-form
podcast appearances, curated social media threads and sympathetic commentary
now function as a parallel forum in which the offender argues his case to a
public that will never read a chargesheet. Where the accused is abroad and
cannot be produced before a court, that parallel forum becomes the only place
his version is heard at all. The law has no vocabulary for this, and the paper
argues that it needs one.
2. The Factual Matrix
Kingfisher
Airlines was launched on 9 May 2005, reportedly as a gift to Mallya's son on
his eighteenth birthday. The carrier positioned itself at the premium end of an
already crowded market and was, for a period, genuinely popular. It was never
profitable. Between 2004 and 2012 the airline drew substantial credit from a
consortium eventually numbering seventeen banks, led by the State Bank of
India, with a significant proportion of the funds applied to routine operating
expenditure rather than to capital formation.[4]
Lending to meet running losses is not by itself unlawful, but it is a poor
foundation for recovery, because it leaves nothing behind that can be sold.
By
the time operations ceased in late 2012 the airline owed in excess of nine
thousand crore rupees to financial creditors, together with unpaid wages,
airport charges and statutory dues. Recovery proceedings before the Debt
Recovery Tribunal at Bengaluru began in 2013. Mallya left India on 2 March
2016, shortly before the Tribunal was due to rule, and thereafter transferred
approximately forty million United States dollars received on the disposal of a
group interest into trusts of which his children were the sole beneficiaries.
The Supreme Court would later hold that this disbursement was made in the teeth
of restraint orders passed by the High Court of Karnataka and in breach of an
undertaking given to the Court itself.[5]
The
allegations pressed by the investigating agencies fall into a recognisable
pattern: misrepresentation of the borrower's financial position at the time of
sanction, inflation of the value of the securities offered, and application of
the disbursed funds to purposes wholly outside the sanction. Proceedings were
commenced under the Recovery of Debts Due to Banks and Financial Institutions
Act, 1993,[6]
the Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002,[7]
the Prevention of Money-Laundering Act, 2002,[8]
the Fugitive Economic Offenders Act, 2018, the Companies Act, 2013 and the
Indian Penal Code, 1860. The breadth of that list is itself instructive. It is
not that India lacked statutes; it is that the statutes were engaged too late
and, in several instances, against a respondent the courts could not reach.
2.1 The Principal Charges
● Cheating
the public sector banks. In 2016 the Central Bureau of
Investigation registered a case against Mallya and Kingfisher Airlines on the
complaint of the State Bank of India, alleging default on loans of
approximately Rs 6,900 crore drawn from seventeen public sector banks, together
with conspiracy and cheating in the manner of their procurement.
● The
IDBI Bank facility. After Mallya's departure the Bureau filed
a chargesheet in relation to loans of about Rs 1,300 crore extended by IDBI
Bank, and notably arraigned officers of the bank itself for having processed
and approved the facility in collusion with the borrower.[9]
The Enforcement Directorate separately alleged that the sanctioned sum was
never deployed for the purposes for which it was released.[10]
● The
Indian Overseas Bank facility. In June 2024 a special
court issued a non-bailable warrant in respect of a facility of Rs 180 crore
sanctioned in 2012. The chargesheet in that matter records that, in August
2010, the Reserve Bank of India had directed the State Bank of India to consider
a restructuring proposal for the airline as part of a broader policy of
supporting the aviation sector — a detail that complicates any simple account
of the lenders as passive victims.[11]
● Diversion
and laundering. The Enforcement Directorate traced a chain
of transfers said to account for roughly Rs 3,547 crore of the sanctioned
facilities, routed through group entities and applied to a motorsport venture,
the acquisition of a private aircraft, and the Royal Challengers Bangalore
franchise.[12]
● Evasion
of service tax. The service tax authorities complained
that Kingfisher had collected service tax from passengers during 2011 and 2012
without remitting it to the exchequer; a Mumbai court issued a non-bailable
warrant on that count.[13]
This is a distinct species of wrong. Money collected from passengers as tax was
never the airline's to deploy, and its retention is difficult to characterise
as an ordinary business failure.
● Corporate
misgovernance. In 2016 the Serious Fraud Investigation
Office issued notices to seventeen companies to trace the ultimate source of
funds channelled into the defunct airline, several of which had themselves
borrowed from banks in order to keep Kingfisher liquid.[14]
2.2 Proceedings in the United Kingdom
Two
parallel tracks opened in England. On the civil side, the lenders registered
the Debt Recovery Tribunal's award under the Foreign Judgments (Reciprocal
Enforcement) Act 1933 and obtained a worldwide freezing order, which the
Commercial Court declined to set aside.[15]
That was a significant moment: it was the first occasion on which an English
court gave direct enforcement effect to the decision of an Indian debt recovery
forum. On the criminal side, the Westminster Magistrates' Court held in
December 2018 that there was a prima facie case of fraud capable of being tried
in India and sent the matter to the Home Secretary,[16]
and the Divisional Court dismissed the appeal in April 2020.[17]
Since
then the position has been static. Mallya has exhausted the appellate remedies
available to him, yet remains in the United Kingdom because a further legal
matter, described by the British authorities only as confidential, must be
resolved before surrender can take place. It is widely understood to be an
application for asylum.[18]
The practical lesson is uncomfortable. India won the extradition litigation and
has still not obtained the extradition. Judicial success and executive outcome
have come apart, and nothing in the 2018 Act closes that gap.
3. Systemic Failures and the Reforms They Have Produced
3.1 Asset Recovery Across Borders
Recovery
is the point at which the Indian system has performed best and still fallen
short. After Mallya's departure the lenders pursued recovery before the Debt
Recovery Tribunal, and in July 2022 the Supreme Court held him in contempt for
having disbursed forty million dollars in defiance of restraint orders,
directing that the transfers be treated as void and that the sums be
redeposited with interest.[19]
It is worth being precise about what that judgment did and did not decide: it
was a contempt ruling on wilful disobedience, not an adjudication of the
underlying fraud allegations, which remain untried.
In
England the lenders secured freezing relief over Mallya's assets,[20]
but converting orders into money proved slow. His holdings are layered through
offshore vehicles and trusts, a substantial proportion consists of shares in
unlisted companies whose value is difficult to establish, and much of the rest
is in depreciating chattels such as motor cars.[21]
His withdrawal in October 2025 of the application to annul the bankruptcy order
removed one procedural obstruction and allowed the trustees to proceed with
realisation.[22]
The
deeper difficulty is structural. Asset recovery in the international sense is
not a single act but a sequence — identification, tracing, freezing,
confiscation and repatriation — and each stage depends on the cooperation of a
state that has no direct stake in the outcome. Chapter V of the United Nations
Convention Against Corruption, to which India is a party, declares the return
of assets a fundamental principle,[23]
but the Convention creates an obligation to cooperate rather than a mechanism
of automatic enforcement. Working Group V of the United Nations Commission on
International Trade Law is presently developing legislative principles for
cross-border civil asset tracing in insolvency,[24]
and Indian practitioners have observed that domestic law is not yet configured
to take advantage of such instruments even where they exist.[25]
Proposal.
The
reform most often suggested — a treaty providing for direct enforcement of an
apex court's order in the territory of a signatory state — is unlikely to be
accepted, because no state will surrender the power to scrutinise a foreign
judgment against its own residents. A more attainable objective is a reciprocal
fast-track registration regime within existing regional and plurilateral
groupings, under which a judgment of a designated superior court is registrable
in the receiving state on proof of service and jurisdiction, with review
confined to narrow public policy grounds. India already has a template in the
reciprocating territory notifications under section 44A of the Code of Civil
Procedure, 1908; the task is to extend the list and shorten the process rather
than to invent a new instrument.
3.2 Extradition
India
and the United Kingdom have been bound by an extradition treaty since 1993,[26]
and the Mallya proceedings demonstrate that the treaty works in the courtroom
and stalls outside it. The defence relied, predictably, on prison conditions,
arguing that detention in India would not meet the standards required by the
European Convention on Human Rights. Indian authorities responded by producing
video evidence of the barrack in which Mallya would be held, and the Chief
Magistrate accepted it. British prosecutors have since inspected Tihar Jail in
connection with pending requests, and official figures indicate roughly twenty
outstanding Indian extradition requests in the United Kingdom and a further one
hundred and seventy-eight elsewhere.[27]
Three
structural asymmetries favour the wealthy respondent. First, the requesting
state must satisfy an evidentiary threshold in a foreign forum applying its own
rules, while the respondent need only raise a sustainable doubt. Second, each
successive appeal costs the respondent money he already has and costs the
requesting state diplomatic capital it may not wish to spend. Third, an asylum
or human rights application filed at the end of the process can suspend
surrender indefinitely without any further adjudication of the merits.
India's
domestic responses have been mixed. Trial in absentia is now expressly
available: sections 355 and 356 of the Bharatiya Nagarik Suraksha Sanhita, 2023
permit inquiry, trial and judgment in the absence of a proclaimed offender.[28]
The Central Bureau of Investigation has established a global operations centre
to coordinate the pursuit of fugitives,[29]
and the Union Government has proposed dedicated detention facilities built to
international standards in order to neutralise the prison-conditions defence.[30]
The last of these is the most promising, because it addresses the argument on
which foreign courts have most often hesitated.
Look-Out
Circulars deserve more scepticism than they usually receive. They are
frequently presented as the lesson learned from Mallya's departure, but in
April 2024 the Bombay High Court struck down the clause of the Ministry of Home
Affairs Office Memorandum that authorised the heads of public sector banks to
request their issuance, holding that the right to travel abroad under Article
21 cannot be curtailed by executive instruction unsupported by statute,
particularly where no criminal charge has been laid.[31]
That conclusion follows directly from Maneka Gandhi,[32]
and it is difficult to fault. The Supreme Court stayed the judgment in August
2024 while the appeals are heard,[33]
and the Delhi High Court has since applied the reasoning in its own decisions.[34]
The position is therefore unsettled, and a paper that presents Look-Out
Circulars as a settled reform misdescribes the law. The honest formulation is
that India presently lacks a statutory basis for restraining the travel of a
borrower against whom no criminal case has been registered, and that Parliament
— not the Home Ministry acting through an office memorandum — is the body that
must supply one, with a judicial check built in.
3.3 The Absence of Due Diligence in Lending
The
consortium's own explanation for its delayed recognition of the position is, in
substance, an admission of institutional failure. Seventeen lenders shared
exposure, and with that sharing came a diffusion of responsibility in which no
single bank regarded close monitoring as its own task. Credit decisions rested
on surface indicators of financial health and on the strength of a brand rather
than on interrogation of the borrower's actual cash position. The lenders have
conceded that they did not adequately understand the structure of the group to
which they were lending.[35]
Two
further features of the arrangement deserve emphasis, because they recur in
Indian corporate defaults. The first is the absence of any effective inter-bank
communication, which permitted the borrower to service interest to one lender
out of fresh drawings from another; punctual interest payments then signalled
health to each bank in isolation. The second is that the consortium reached the
Supreme Court only after the borrower had left the country. Recovery machinery,
however well designed, cannot compensate for the failure to act while the
debtor is within the jurisdiction.
Regulatory
responses followed. From 2018, non-performing accounts with exposure above Rs
50 crore must be examined for indicators of fraud and the examination reported
to the bank's committee for the review of non-performing assets; public sector
banks were also permitted to publish photographs of wilful defaulters and
directed to rotate officers between postings.[36]
These are sensible administrative measures, but their effect is diagnostic
rather than preventive. They improve the speed at which a bank recognises that
it has been defrauded; they do not improve the quality of the decision that
exposed it to fraud in the first place. The IDBI chargesheet, which arraigned
the bank's own officers, indicates where the more difficult reform lies. Where
sanction has been procured with internal assistance, no amount of post-hoc
classification will help.
3.4 End-Use of Borrowed Funds
Facilities
drawn for operating expenditure were, on the prosecution case, applied to
overseas investments and personal consumption. The warning signs were available
well before the collapse: unpaid employee salaries, grounded aircraft, and a
reported net loss of Rs 2,328 crore in 2011–12, by the end of which only a
handful of the airline's fleet remained operational. The Reserve Bank's master
circular of 2015 requires lenders to inspect the application of disbursed
funds, to satisfy themselves that no siphoning has occurred, and to obtain
certification from the borrower that the money has been used for the sanctioned
purpose.[37] That framework is
adequate on paper. What the Kingfisher file shows is that a borrower
certificate is worth precisely as much as the verification behind it, and that
a lender with no independent line of sight into the borrower's accounts is
certifying its own ignorance.
4. Wilful Default Is Not a New Problem
It
is tempting to treat Kingfisher as an aberration produced by one flamboyant
promoter. The regulatory record suggests otherwise. Concern about deliberate
non-repayment dates to the liberalisation period and the balance of payments
crisis that preceded it. The Narasimham Committee recommended a specialised
recovery forum,[38] and Parliament gave
effect to that recommendation through the Recovery of Debts Due to Banks and
Financial Institutions Act, 1993, which established the Debt Recovery
Tribunals. The Reserve Bank's successive master circulars developed the concept
of wilful default and, from 2013, introduced categories such as the
unauthorised disposal of secured assets, together with a committee-based
procedure that gave the borrower an opportunity to be heard before
classification.
The
framework was consolidated in July 2024, when the Reserve Bank issued
directions governing the treatment of wilful and large defaulters. The
directions require examination of non-performing accounts with exposure of Rs
25 lakh and above, prescribe a non-discriminatory and transparent
classification procedure consistent with natural justice, bar wilful defaulters
and associated entities from the restructuring of credit facilities, and —
significantly for the present discussion — extend accountability to third
parties such as auditors and valuers who facilitated the default.[39]
The extension to professional gatekeepers is the most interesting development,
because it recognises that a large fraud requires more participants than a
borrower and a compliant bank officer.
The
scale of the problem nonetheless remains considerable. As at 31 October 2025
the Government informed the Lok Sabha that fifteen individuals had been
declared fugitive economic offenders, collectively responsible for a principal
loss of Rs 26,645 crore to public sector banks, with accrued interest of a
further Rs 31,437 crore and recoveries of Rs 19,187 crore.[40]
Those figures describe only the fugitives. The wider population of wilful
defaulters who have never left India is an order of magnitude larger, and it is
a mistake of emphasis to treat flight as the defining feature of the problem
when it is in fact the rarest of its manifestations.
5. The Fugitive Economic Offenders Act, 2018
The
legislation was foreshadowed in the Union Budget for 2017–18 and introduced in
the Lok Sabha on 12 March 2018. When both Houses were prorogued before it could
be passed, the Government promulgated an ordinance on 21 April 2018. The Bill
was subsequently passed by the Lok Sabha on 19 July and by the Rajya Sabha on
25 July 2018, received presidential assent on 31 July 2018, and is deemed by
section 1(3) to have come into force on 21 April 2018.[41]
The sequence matters to the argument of this paper: the statute was drafted
after Mallya had already left, and its design reflects an attempt to solve the
problem of the departed offender rather than the problem of the offender who is
still present and still borrowing.
The
Act applies to an individual against whom a warrant of arrest has been issued
in respect of a scheduled offence and who has either left India to avoid
criminal prosecution or, being abroad, declines to return to face it. It does
not apply unless the value involved is at least one hundred crore rupees,[42] a
threshold that confines the statute to the largest cases and leaves the great
mass of economic offending untouched.
5.1 The Principal Provisions
● Hearing
in absence. Section 11 allows the Special Court to
proceed with an application even where the individual neither appears in person
nor is represented by counsel.[43] The provision prevents the respondent
from stalling the proceeding simply by staying away, and it now sits alongside
the trial in absentia machinery of the Bharatiya Nagarik Suraksha Sanhita.
● Confiscation.
On
a declaration under section 12 the Central Government may confiscate the
offender's property whether situated in India or abroad, including proceeds of
crime and benami holdings, and where the proceeds cannot be traced their value
may be quantified instead.[44]
The extraterritorial language is broad, but its practical force depends
entirely on the willingness of the foreign state in which the property lies to
give effect to the order — which returns the discussion to the cooperation
problem considered above.
● Bar
on civil claims. Section 14 empowers a court or tribunal to
disallow a declared offender from putting forward or defending a civil claim.[45]
This provision has attracted the sharpest criticism, on the ground that it
denies access to justice and operates as a penalty imposed before any
adjudication of guilt.[46]
5.2 An Assessment of Section 14
The
case for section 14 is that a litigant who refuses to submit to the criminal
jurisdiction of Indian courts cannot reasonably invoke their civil jurisdiction
when it suits him, and that section 12(8) already protects the innocent third
party by permitting the exclusion of property in which a bona fide interest has
been acquired without knowledge of its tainted origin.[47]
The case against it is that it is discretionary in form but punitive in
substance, and that it attaches consequences to a declaration made in
proceedings the respondent may have had no realistic opportunity to contest.
The
stronger objection, in this author's view, concerns collateral consequences
rather than the offender himself. A civil claim may concern a matrimonial
dispute, the succession of an estate, or the rights of a minor child. The
interests engaged in such proceedings are not the offender's alone, and section
12(8) protects only interests in property, not the standing of a family member
to have a dispute heard at all. The provision would be materially improved by
an express requirement that the court, before disallowing a claim or defence,
satisfy itself that no third party will be prejudiced, and by confining its
operation to claims arising from or connected with the scheduled offence. As
drafted, it invites a constitutional challenge that the statute does not need.
6. The Present Position and the Battle for the Narrative
By
December 2024 the Government reported that assets worth Rs 14,131.6 crore had
been restored to public sector banks from the realisation of Mallya's holdings,[48]
and in June 2025 the Finance Ministry stated that Rs 6,997 crore remained
outstanding against total dues of Rs 17,781 crore.[49]
Mallya has since contested these figures publicly, pointing to what he says are
inconsistencies between the recoveries announced in Parliament and those
acknowledged by the banks, and calling for an inquiry by a retired judge.[50]
The
arithmetic is less opaque than the dispute suggests, and the confusion is
largely rhetorical. What has been recovered is measured against a judgment debt
fixed at a particular date; what remains outstanding is measured against a
figure that includes interest which has continued to accrue throughout the
decade of non-payment. A borrower who declines to pay for ten years and then
observes that the sums recovered exceed the original principal is describing
the consequence of his own delay, not an injustice. The rhetorical move —
conflating the principal with the decretal sum — is effective precisely because
most listeners will not pause to separate them.
That
is where the reputational campaign becomes legally relevant. Mallya's
appearance on a widely circulated podcast in 2025 was not a media event so much
as an argument advanced outside any forum competent to test it.[51]
The device deployed there was the doctrine of separate corporate personality:
the borrower was Kingfisher Airlines, a company, and its failure was a business
failure rather than a theft. The response is straightforward and is unlikely to
be put in that setting. Separate personality is a rule about the allocation of
contractual liability; it is not a defence to allegations of misrepresentation
at the point of sanction, of diversion of funds after disbursement, or of the
retention of service tax collected from passengers. Those charges are levelled
against an individual's conduct, and the corporate veil has never been an
answer to them.
The
related contention — that recovery should end the prosecution — has now been
tested. In September 2026 the Enforcement Directorate submitted to the Bombay
High Court that the recovery of bank dues cannot render the proceedings under
the Prevention of Money-Laundering Act, or the criminal complaints, redundant,
because money laundering and the scheduled offences on which it rests are
distinct from the civil obligation to repay.[52]
That submission is plainly correct as a matter of principle. Restitution
mitigates the consequences of an offence; it does not unmake it. Were the
position otherwise, the criminal law applicable to economic offending would
operate as a payment plan available to those who can afford it.
Mallya's
status in the Indian proceedings meanwhile remains unresolved. In February 2026
the Bombay High Court gave him a final opportunity to appear in person to
challenge his designation as a fugitive economic offender, and he did not do
so, maintaining that his passport had been surrendered in the English
bankruptcy and that he is restrained from leaving England and Wales.[53]
The circularity is complete. He cannot contest the declaration without
returning, cannot return without the resolution of the confidential matter in
the United Kingdom, and the confidential matter shows no sign of resolution.
7. Recommendations
● Put
travel restraint on a statutory footing. Following Viraj
Chetan Shah, the power to restrain a borrower's departure requires
legislative authority rather than an executive memorandum. A narrowly drawn
provision — available on application by a lender to a designated court, on a
demonstrated risk of flight, for a limited and renewable period, with reasons
recorded — would be both constitutionally defensible and more useful than the
present position, in which the power is under appeal and its validity
uncertain.
● Make
end-use verification independent of the borrower. The
certification requirement in the Reserve Bank's circulars should be
supplemented by lender-appointed monitoring for facilities above a prescribed
threshold, with the monitor reporting to the consortium rather than to the
borrower, and with the accountability of third-party professionals under the
2024 directions extended to that function.
● Require
a consortium lead with named responsibility. Diffusion of
responsibility among seventeen lenders was a proximate cause of the delay in
recognising the Kingfisher position. Consortium lending arrangements should
identify a lead institution and a named officer accountable for monitoring,
with a mandatory early-warning report circulated to every participant on the
occurrence of defined triggers such as unpaid wages, grounded assets or the
servicing of interest from fresh drawings.
● Narrow
section 14 of the 2018 Act. The bar on civil claims
should be confined to claims connected with the scheduled offence, and should
be exercisable only after the court has satisfied itself that third parties
will not be prejudiced.
● Pursue
registration, not enforcement, in treaty negotiation. India
should seek reciprocal fast-track registration of superior court judgments
within existing groupings rather than the direct enforcement of Indian orders
abroad, which no counterparty is likely to concede. Extending the reciprocating
territory notifications under section 44A of the Code of Civil Procedure, 1908
is the realistic first step.
● Answer
the narrative rather than suppress it. Proposals to restrain a
fugitive from speaking about a pending matter are constitutionally fragile and
practically unenforceable against a person outside the jurisdiction. The better
course is institutional: the investigating agencies should publish accessible,
periodically updated statements of account in significant cases, setting out
principal, interest, recoveries and outstanding dues. An accurate public record
is a more effective answer to a podcast than a gag order that cannot be served.
8. Conclusion
The
King of Good Times has given India a decade of hard ones, and the file is not
closed. What the Kingfisher episode ultimately demonstrates is that a legal
system can win nearly every argument and still fail to obtain the result it
sought. India secured a contempt conviction in its own Supreme Court, an
extradition order in a foreign magistrates' court, an appellate affirmation of
that order, a worldwide freezing order, the first declaration under a new
statute, and the restoration of more than fourteen thousand crore rupees to the
lenders. It has not secured the presence of the accused, and without that the
criminal allegations at the centre of the matter remain untried after ten
years.
The
Fugitive Economic Offenders Act, 2018 is a competent piece of drafting that
addresses the wrong stage of the problem. It confiscates efficiently and
declares decisively, but it is triggered only once the offender has gone, and
it does nothing about the credit decision, the unmonitored disbursement, the
silence between consortium members, or the officer inside the bank who moved
the file along. India is, so far as the author is aware, unusual in having
criminalised the concept of wilful default at all; that is a genuine
contribution, and other jurisdictions have something to learn from it. But the
lesson of this case runs the other way as well. A statute directed at the
fugitive is a statute that has already conceded the flight. The work that
matters is done earlier, in the lending hall rather than at the airport, and it
is measured not in confiscations but in defaults that never mature into
scandals.
[1]Vijay Mallya Has
Left the Country, Government Tells Supreme Court, New Indian Express (Mar. 9, 2016),
https://www.newindianexpress.com/nation/2016/Mar/09/vijay-mallya-has-left-the-country-government-tells-supreme-court-901734.html.
[2]Fugitive Economic
Offenders Act, No. 17 of 2018, India Code
(2018).
[3]Directorate of
Enforcement v. Mallya, Special Court (Prevention of Money-Laundering Act),
Mumbai (Jan. 5, 2019) (Azmi, J.) (India) (unreported); see also Vijay
Mallya Becomes First Person to Be Officially Tagged as a Fugitive Economic
Offender, Bus. Today (Jan. 5,
2019),
https://www.businesstoday.in/latest/economy-politics/story/vijay-mallya-becomes-first-person-to-be-officially-tagged-as-a-fugitive-economic-offender-157748-2019-01-05.
[4]Mallya v. Gov't of
India [2020] EWHC (Admin) 924, [3]–[12] (Eng.). The English Divisional Court's
recital of the lending history is the most complete judicial account of the
Kingfisher facts available in the public domain.
[5]State Bank of
India v. Mallya, 2022 INSC 700 (India).
[6]Recovery of Debts
Due to Banks and Financial Institutions Act, No. 51 of 1993, India Code (1993), renamed the Recovery
of Debts and Bankruptcy Act, 1993, by the Insolvency and Bankruptcy Code, No.
31 of 2016, § 250, India Code
(2016).
[7]Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest Act,
No. 54 of 2002, India Code (2002).
[8]Prevention of
Money-Laundering Act, No. 15 of 2003, India
Code (2003).
[9]CBI Files
Chargesheet Against Mallya in IDBI Loan Case, Bus.
Standard (Jan. 24, 2017),
https://www.business-standard.com/article/news-ians/cbi-files-chargesheet-against-mallya-in-idbi-loan-case-117012401278_1.html.
[10]Shaswati Das &
Jayshree P. Upadhyay, ED Files Charges Against Vijay Mallya in Case over
IDBI Bank Loans to Kingfisher Airlines, Mint
(June 15, 2017),
https://www.livemint.com/Politics/VUWHexf9LQwbwgTDNPBt2M/Vijay-Mallya-chargesheeted-by-ED-in-case-over-IDBI-Bank-loan.html.
[11]Vijay Mallya
Receives Non-Bailable Warrant in Loan Default Case Linked to Indian Overseas
Bank,
Hindu (July 2, 2024).
[12]Press Trust of
India, Vijay Mallya Fraudulently Diverted Rs 3,700 Crore for Jet Sorties,
F1, IPL Teams: Enforcement Directorate, NDTV
(June 20, 2018),
https://www.ndtv.com/india-news/vijay-mallya-charged-with-fradulently-diverting-rs-3700-crore-1870614.
[13]Press Trust of
India, Mallya Flew Away Just Like 'Kingfisher' Bird: HC, Mumbai Mirror (Sept. 19, 2016).
[14]Money Laundering
Case: Fraud Office Probes 17 Firms Who Took Loans to Fund Vijay Mallya, Indian Express (July 22, 2016). The
Serious Fraud Investigation Office derives its investigative mandate from the
Companies Act, No. 18 of 2013, §§ 211–212, India
Code (2013).
[15]State Bank of
India v. Mallya [2018] EWHC (Comm) 1084 (Eng.). The Debt Recovery Tribunal's
award was registered in England under the Foreign Judgments (Reciprocal
Enforcement) Act 1933, c. 13 (U.K.).
[16]Gov't of India v.
Mallya (Westminster Magistrates' Ct. Dec. 10, 2018) (Arbuthnot, C.M.) (Eng.)
(unreported).
[18]Ron Emler, Vijay
Mallya Debt Recovery Cannot End Criminal Case, Indian Court Told, Drinks Bus. (Sept. 14, 2026),
https://www.thedrinksbusiness.com/2026/09/vijay-mallya-debt-recovery-cannot-end-criminal-case-indian-court-told/.
[19]State Bank of
India v. Mallya, supra note 5.
[20]Press Trust of
India, Mallya Assets Freeze Order in UK Courts Until April 2018, Econ. Times (Dec. 13, 2017),
https://economictimes.indiatimes.com/news/politics-and-nation/mallya-assets-freeze-order-in-uk-courts-until-april-2018/articleshow/62057873.cms.
[21]Naomi Canton, Indian
Banks Face Uphill Task to Determine What Mallya Owns in England, Times India (July 11, 2018),
https://timesofindia.indiatimes.com/business/india-business/indian-banks-face-uphill-task-to-determine-what-mallya-owns-in-england/articleshow/64937513.cms.
[22]Press Trust of
India, Vijay Mallya Discontinues Bankruptcy Annulment Application in UK,
Econ. Times (Oct. 13, 2025),
https://economictimes.indiatimes.com/news/india/vijay-mallya-discontinues-bankruptcy-annulment-application-in-uk/articleshow/124531165.cms.
[23]United Nations
Convention Against Corruption arts. 51–57, opened for signature Dec. 9,
2003, 2349 U.N.T.S. 41 (ratified by India May 9, 2011). Article 51 declares the
return of assets a fundamental principle of the Convention.
[24]U.N. Comm'n on
Int'l Trade Law, Working Grp. V (Insolvency Law), Civil Asset Tracing and
Recovery in Insolvency Proceedings, U.N. Doc. A/CN.9/WG.V/WP.189 (63d
Sess., Dec. 11–15, 2023).
[25]Surbhi Pareek
& Monil Chheda, Asset Tracing and Recovery: Is India Ready? (INSOL
Int'l, Tech. Paper Series No. 63, June 2024),
https://www.cyrilshroff.com/wp-content/uploads/2024/07/asset-tracing-and-recovery-is-india-ready.pdf.
[26]Extradition Treaty
Between the Government of the Republic of India and the Government of the
United Kingdom of Great Britain and Northern Ireland, India-U.K., Sept. 22,
1992 (entered into force Nov. 15, 1993); see also Extradition Act, No.
34 of 1962, India Code (1962).
[27]Why UK Prosecutors
Toured Tihar Jail Before Deciding on Vijay Mallya and Nirav Modi's Fate, Moneycontrol (Sept. 7, 2025),
https://www.moneycontrol.com/news/india/why-uk-prosecutors-toured-tihar-jail-before-deciding-on-vijay-mallya-and-nirav-modi-s-fate-13526640.html.
[28]Bharatiya Nagarik
Suraksha Sanhita, No. 46 of 2023, §§ 355–356, India
Code (2023). Section 356 permits inquiry, trial or judgment in the
absence of a proclaimed offender.
[29]Press Info.
Bureau, Gov't of India, Release No. 2179886 (Oct. 16, 2025),
https://pib.gov.in/PressReleasePage.aspx?PRID=2179886.
[30]Neeraj Chauhan, Shah
Calls for Special Jails to Aid Extradition, Hindustan
Times (Oct. 17, 2025),
https://www.hindustantimes.com/india-news/shah-calls-for-special-jails-to-aid-extradition-101760641216821.html.
[31]Viraj Chetan Shah
v. Union of India, 2024 SCC OnLine Bom 1195 (India). The High Court quashed
clause 8(b)(xv) of the Ministry of Home Affairs Office Memorandum of 27 October
2010 (and its equivalent, clause 6(B)(xv) of the consolidated Office Memorandum
of 22 February 2021), which had authorised the heads of public sector banks to
request Look-Out Circulars.
[32]Maneka Gandhi v.
Union of India, (1978) 1 S.C.C. 248 (India).
[33]Union of India v.
Viraj Chetan Shah (S.C. Aug. 20, 2024) (India) (interim stay of the High
Court's judgment, with liberty to affected borrowers to seek travel permission
from the High Court).
[34]Ritu Singal v.
Bureau of Immigration, 2026:DHC:3806 (India) (following Viraj Chetan Shah).
[35]Kiran Ashok Kadam,
State Bank of India v. Dr. Vijay Mallya, Int'l
J. Legal Stud. & Soc. Sci. (July 2024),
https://ijlsss.com/wp-content/uploads/2024/07/18.-KiranKadam.pdf.
[36]Press Info.
Bureau, Gov't of India, Union Minister of Finance and Corporate Affairs
Launches New Initiatives for Corporate Sector (Feb. 20, 2019),
https://www.pib.gov.in/pressreleasepage.aspx?prid=1555992.
[37]Reserve Bank of
India, Master Circular on Wilful Defaulters, RBI/2015-16/100,
DBR.No.CID.BC.22/20.16.003/2015-16 (July 1, 2015),
https://www.rbi.org.in/commonperson/English/Scripts/Notification.aspx?Id=1458.
[38]Reserve Bank of
India, Report of the Committee on the
Financial System (1991) (Chairman: M. Narasimham).
[39]Reserve Bank of
India (Treatment of Wilful Defaulters and Large Defaulters) Directions, 2024,
RBI/DoR/2024-25/122, DoR.FIN.REC.No.31/20.16.003/2024-25 (July 30, 2024)
(India).
[40]Vijay Mallya
Questions Minister's Statement on Recoveries from Him, Deccan Herald (Dec. 2, 2025),
https://www.deccanherald.com/india/vijay-mallya-questions-ministers-statement-on-recoveries-from-him-3816968.
The reply placed before the Lok Sabha recorded fifteen declared fugitive
economic offenders owing a principal sum of Rs 26,645 crore and accrued
interest of Rs 31,437 crore as on 31 October 2025, against recoveries of Rs
19,187 crore.
[41]Fugitive Economic
Offenders Act, supra note 2, § 1(3).
[42]Fugitive Economic
Offenders Act, No. 17 of 2018, § 4(2) proviso, India
Code (2018). The declaration is available only where the value involved
is at least one hundred crore rupees.
[43]Fugitive Economic
Offenders Act, No. 17 of 2018, § 11, India
Code (2018).
[46]Rahul Madathil, Fugitive
Economic Offenders Regulations and Securities Laws of India, 10 Int'l J. Rsch. & Analytical Revs.
560 (2023), https://ijrar.org/papers/IJRAR23B1798.pdf.
[47]Fugitive Economic
Offenders Act, No. 17 of 2018, § 12(8), India
Code (2018). The provision permits the Special Court to exclude property
in which a person other than the offender holds an interest acquired bona fide
and without knowledge that the property represented proceeds of crime.
[48]Rs 14,131.6 Crore
Recovered from Vijay Mallya's Asset Sales, Bus.
Standard (Dec. 18, 2024),
https://www.business-standard.com/india-news/vijay-mallya-assets-recovered-nirmala-sitharaman-ed-124121800573_1.html.
[49]Mallya Still Owes
Rs 6,997 Crore Out of Total Dues of Rs 17,781 Crore, Says Finance Ministry, New Indian Express (June 12, 2025).
[51]Vijay Mallya,
Interview by Raj Shamani, Figuring Out with Raj Shamani (June 2025).
[52]Emler, supra
note 18.
[53]Ron Emler, Vijay
Mallya Misses Mumbai Court Deadline in Fugitive Offender Case, Drinks Bus. (Feb. 20, 2026),
https://www.thedrinksbusiness.com/2026/02/vijay-mallya-misses-mumbai-court-deadline-in-fugitive-offender-case/.
How to Cite This Article
SHREYA KUMARI, SAGAR GAUTAM, The King of Good Times and the Long Arm of the Law: Wilful Default, Extradition and the Limits of the Fugitive Economic Offenders Act, 2018., White Black Legal – International Law Journal, ISSN: 2581-8503, Vol. Volume 4, Issue VOLUME 4 ISSUE 1, September 2026, pp. 894-912. Available at: https://www.whiteblacklegal.co.in/details/the-king-of-good-times-and-the-long-arm-of-the-law-wilful-default-extradition-and-the-limits-of-the-fugitive-economic-offenders-act-2018
Author & Publication Record
Authors: SHREYA KUMARI & SAGAR GAUTAM
Registration ID: 107107 | Published Paper ID: WBL7107 & WBL7108
Year: Sep- 2026 | Volume: 4 | Issue: 1
Approved ISSN: 2581-8503 | Country: Delhi, India
Page No.: 894-912
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