Examining the Vijay Mallya Scandal: A Case Study in Financial Fraud


In the previous many years, there have been numerous exploitative behaviours in the organizations of different callings which impacted the general population at large. A large portion of the tricks and cheats are finished by powerful individuals of the general public and consequently, have an extraordinary effect. These tricks and fakes by powerful individuals structure a piece of middle-class wrongdoings. The term ‘middle-class violations’ and its idea were interestingly given by Sutherland. He brought up that there are sure violations other than the customary wrongdoings (likewise called common wrongdoings) and were viewed as a piece of regular exploitative business strategies embraced by men to acquire achievement. This is the explanation that such violations were not rebuffed until the idea was not made sense of by Sutherland.

He alongside different essayists attempted to move the focal point of the general public to much-required risks from the violations committed by upper financial gatherings in the public eye. He characterized middle-class violations as ‘wrongdoings perpetrated by people of high economic well-being over their occupation or work.’ These violations incorporate fakes, encroachment of licenses, copyrights, brand names, illegal tax avoidance, and so forth. The nation has seen the biggest tricks of the ten years, one of them being the Vijay Mallya Trick of Rs 9000 crore. Indeed, even after numerous endeavors, he has not been shipped off the country for finishing the preliminary. A new report in 2016 showed that there is a connection between expanding misrepresentation and NPA (non-performing resources). NPAs are advances where the total isn’t paid for over 90 days and is late. This is taken advantage of by the ones who mean to do misrepresentation. The trick done by Vijay Mallya is additionally talked about exhaustively in the article.

History of Vijay Mallya and his organization

The previous Individual from Parliament (Rajya Sabha) and a popular finance manager, named Vijay Mallya, is the ex-director of Joined Spirits and the executive of Joined Distilleries Gathering enjoyed drinking liquor, composts, and land business. He turned into the executive of the organization at 28 years old and focussed on the development of his privately-run company from that point forward. He is likewise known to claim a renowned IPL group RCB for example Illustrious Challenger Bangalore for an extensive stretch of time. With his diligent effort, the organization had the option to take a major jump in turnover making it 64% in 1999. He additionally extended his business outside the country to numerous far-off nations and furthermore obtained Berger paints in his name. He has likewise been chosen as the Individual from Parliament twice from Karnataka.

He once chose to extend his business of alcohol and aircraft yet was informed by the individuals concerning the organization. Without paying any notice to the exhortation, he offered one of his organizations to gather assets for his business of Carriers. He put every one of the gathered assets in the Carriers, because of which his Kingfisher Aircrafts turned into the famous homegrown carriers in the country. He additionally needed to extend the carriers however the public authority forced different limitations and didn’t permit it to continue with global flights. As an outcome of this, he controlled his own Unified Bottling Works organization to purchase another organization going in misfortune for example Deccan Carriers, and blended it with his own aircrafts yet couldn’t create gains as wanted and to be sure experienced an extraordinary misfortune.

How did the Vijay Mallya trick happen

To proceed with his business, he took weighty advances from different banks but was not repaying them. Many banks announced his bankruptcy and didn’t give further advances yet he kept on taking it from various banks utilizing his key place of authority. One more deceptive practice done by his carriers was that they were not paying any PF and compensations to their workers and duties to the public authority. With such extraordinary misfortunes ceaselessly, he would not pay the pay rates of his representatives and shut down his business.

Subtleties of different advances taken by Vijay Mallya all through the trick

He took advances from 17 banks in the nation (absolute Rs. 9000 crores) and would not reimburse the chief sum because of which they recorded a legal dispute against him. The subtleties of significant credits and the sum taken by him are given underneath:

  1. no. – Name of Bank  -Loan sum
  2. Pivot bank    –  50 crores
  3. Punjab and Sind Bank  – 60 crores
  4. Government bank – 90 crores
  5. Indian abroad bank -140 crores
  6. Joined Bank of India -430 crores
  7.  Bank of Baroda 550 crores
  8. IDBI 800 crores
  9. PNB 800 crores
  10. SBI 1600 crores

Inability to reimburse the credit and to keep away from criminal risk, he raced to one more country with all the cash he took as an advance in 2016 and has not gotten back yet. The different purposes behind the disappointment of aircraft could be:

  • Awful business system
  • Disappointment with respect to the executives
  • High fuel costs
  • Downturn of 2008
  • The significant expense of activity.
  • High ticket costs.

The reaction of Vijay Mallya to the charges

After the trick in 2016, he raced to the Assembled Realm and has not returned back from that point forward. He prevented every one of the claims from getting tricked and misrepresentation affirmed by the banks and his representatives and composed a letter promising to repay all the cash with legitimate revenue. In any case, he isn’t following up on his words and his lead uncovers that he has not paid the chief sum. The High Court in 2017 arranged for him on different occasions to show up under the steady gaze of the court yet he overlooked the request. Subsequently, the court accused him of Hatred of the court and extortion and requested the public authority to look for his removal. The High Court in a new hearing likewise viewed him to be blameworthy of hatred for keeping data from the court and offered him the last chance to show up under the watchful eye of the court either through his promoter or himself.

Then again, the Public authority of India pursued in the court in London to send Vijay Mallya back to his own country for the finished preliminary. They made removal solicitations to the court in London thus, he was captured yet bailed each time because of his political and place of authority.

Judgment of Illustrious Courtrooms

For this situation, the public authority of India mentioned a court in London for the removal of Vijay Mallya from their country to India. It was contended that he pursued the nation by doing a trick with the goal to cheat the banks and individuals and took all the cash illicitly with him and participated in tax evasion thus, they need to take him back into the country. They again recorded a removal demand in 2017 in the court based on which he was captured and conceded bail once more. This happened each time such a solicitation was made in court.

Vijay Mallya, then again, fought something contrary to what the public authority of India contended. The court thought that the litigant won’t get a fair preliminary in that frame of mind to political impact and strain, and will be wretchedly tormented. They applied common freedoms from a severe perspective and kept the solicitation from getting the Indian Government. They found the solicitation of removal by the Indian Government restricting and against the European Show on basic liberties as a result of unfortunate jail conditions in India and requested to work on the circumstances and offices in detainment facilities.

Legitimate arrangements applied to the situation

The different charges on Vijay Mallya and the legitimate arrangements are made sense of beneath:

Criminal trick

The prior trick was a common wrong yet later it was made a lawbreaker wrong based on the gravity and nature of the cases. Segment 120A of the Indian Correctional Code, 1860 arrangements with the offense of criminal trick. Initially, it was culpable in 2 structures:

  • Via abetment.
  • The trick in specific offenses.

An unlawful demonstration or oversight was important to convict an individual in the previous yet later in the event that an individual is an individual from the trick, it was viewed as an adequate ground to convict an individual for criminal connivance.

In any case, with the revision in the Code, Segment 120A and Area 120B were embedded. It currently manages the offense of criminal connivance as:

  • Meaningful offense
  • Type of abetment under Segment 107 of Section V.
  • Pay or endeavor to take up arms against the Public authority of India (Area 121A).

On account of State (C.B.I/S.I.T) v. Nalini (1971), it was held by the Peak Court that an arrangement between at least two people for the commission of unlawful demonstrations adds up to criminal intrigue. It isn’t important to demonstrate that every individual blamed for such wrongdoing gave their unequivocal assent to the scheme and partook in it.

Elements of Area 120A

  1. Agreement between at least two people for a scheme;
  2. The understanding ought to be made with the end goal of:
  3. Illegal demonstration
  4. A lawful demonstration to be finished by unlawful means.

On account of Topandas v. Territory of Bombay (1956), the High Court held that a solitary individual can never be charged and made at real fault for criminal connivance since he can’t be the only one to contrive anything against anybody.

Segment 120B of the code gives discipline for the offense of criminal connivance. On the off chance that the connivance was finished for the commission of the serious offense, the individual would be rebuffed with capital punishment, life detainment, or rigorous detainment for a long time or more, which is chosen from one case to another. In the event that they contrived to commit an offense that is culpable with a fine, the discipline would be a half-year detainment or fine, or both. Vijay Mallya has been blamed for plotting to cheat the individuals from the organization and his representatives alongside different banks in the country.


Segment 420 of the Indian Punitive Code, 1860 arrangements with the offense of cheating and conveying property with unscrupulous aim. The laid out rule for the offense of cheating is that to convict an individual for the offense of cheating, it isn’t important to show that he had an exploitative aim when he made a guarantee to follow through with something. In any case, in the event that he can’t satisfy the commitment, it doesn’t simply imply that he committed the offense of cheating as untrustworthy expectation should be there to demonstrate the offense.

Elements for the offense of Cheating

  1. Bogus portrayal made by the denounced.
  2. Information that the portrayal was bogus.
  3. Untrustworthy goal to misdirect the individual
  4. Initiated an individual to follow through with something or overlook to follow through with something, which he could not have possibly finished.

On account of Bakshish Singh Dhaliwal v. Territory of Punjab (1967), the litigant submitted different misleading cases to the public authority of Burma in Simla in 1942 for the works he executed and for the stockpile of materials according to the directions of the Military. The High Court held that the cases were false and this prompted the induction that he realize that every one of the portrayals was misleading and was expected to take responsibility for the offense of cheating.

Criminal wrongdoing and tax evasion

On the off chance that a community worker carries out the offense of criminal wrongdoing to acquire any money-related benefit or important thing by utilizing his place of authority and misusing his powers, he will be held at risk under Segment 13 of The Counteraction of Debasement Act, 1988. He will be rebuffed with detainment up to 7 years or a fine or both. In the current case, Vijay Mallya utilized his place as an Individual from Parliament (Rajya Sabha) to acquire advances from the banks in any event, when he was proclaimed bankrupt by different banks. This shows that he utilized his compelling nature and manhandled his ability to acquire financial benefits and was consequently charged under this Segment.

He was additionally charged under Segments 3 and 4 of the Anticipation of Illegal tax avoidance Act, 2002 for the misrepresentation of cash. Area 4 gives discipline to the offence which is thorough detainment expanding up to 7 years and at least 3 years alongside a fine.


This Act empowers the moneylenders of the credit to recuperate their sum and premium by auctioning off the property and resources of the individual who has taken the advance. In the current case, the loan specialists in different banks were allowed to recuperate the chief sum and premium by selling the resources and properties of Vijay Mallya’s organization Kingfisher. The bartering was finished through electronic mode yet the recuperation wasn’t possible because of no purchasers for the resources. The housing market was at that point battling and hence, the loan specialists couldn’t find any purchaser who could purchase any resource or property of the organization due to greater costs.

Removal Regulations

Removal is a cycle through which a nation demands one more nation where the outlaw wrongdoer is stowing away, to send him back to his own country. The regulations are normally administered by arrangements and relations between the nations. It is administered by the Removal Demonstration of 1962. The idea depends on 3 different standards, in particular, Double culpability, Claim to fame, and Political impact. Be that as it may, these regulations are not applied in specific cases. These are:

  • In the event that the rule of double guiltiness can’t be applied or necessities can’t be satisfied.
  • In the event that the wrongdoing is political wrongdoing, removal of such guilty parties is by and large rejected.
  • In the event that the nation has severe basic freedoms, it can deny the extradition on the ground of infringement of these privileges and torment to the wrongdoer in his nation’s jail, as found in the current trick.
  • Assuming there is no removal deal between the two nations, the outside country where the guilty party got away, can reject his removal.


Middle-class violations are the most hazardous wrongdoings in the current period as they influence individuals on the loose as well as effects the economy of a country generally. India has seen many such tricks, a portion of these are feed trick, Satyam trick, hawala trick, and so on. Vijay Mallya’s trick is one more illustration of such tricks. It was likewise finished by an Individual from Parliament who knows how to get away from the criminal risk. This is the explanation that he has not been sentenced at this point in spite of numerous endeavours of the Indian Government. This is equivalent to “equity deferred is equity denied” and shows the insufficiency of the framework to manage such circumstances.

According to the reports of Seasons of India, the courts in the UK acknowledged the solicitation of removal of Vijay Mallya to India in 2019, however, has not been sent back yet as he is making an honest effort to remain in the country using any and all means. The country, particularly the financial area saw a drop in the economy after the trick by Vijay Mallya. The land was battling and this was the explanation that nobody approached to purchase the resources of the organization for recuperation of advances. The Focal Cautiousness Board of Trustees (CVC), thus, advised the banks to have a second layer of the confirmation process for the assessment of credit demands by persuasive individuals and financial specialists and to have their own counselling organization. Another such ongoing trick that India confronted was finished by Nirav Modi in 2018. He duped Rs. 11400 crores utilizing counterfeit bank ensures and escaped to London. The case is forthcoming in the court in London.

Written By:- Manika Jamatia

LLM Student, School of LAW,
Lovely Professional University, Punjab

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