HC paves way for fresh auction of Mallya’s plane


The Bombay High Court on Monday allowed a company which had claimed to have won the auction for industrialist Vijay Mallya’s luxury jet at Rs. 27.39 crore to withdraw its bid, paving the way for a fresh auction.

The Service Tax department, which has to recover dues of over Rs. 500 crore from Mr. Mallya’s defunct Kingfisher Airlines, had attached the plane in December 2013. The aircraft is grounded since October 2012. The Mumbai International Airport Ltd (MIAL) has also approached the HC, claiming hangar charges for the plane from SGI Commex, the purported bid winner.

However, SGI Commex told the court that it wanted to withdraw from the process because “it was not acceptable to other side and the deal could not be struck under a cloud.” “A fresh auction may be permitted (by the court)…We may bid again if we feel necessary,” its lawyer said.

A division bench headed by Justice S.C. Dharmadhikari recorded the statement and allowed a fresh auction. The bench also gave the option to C.J. Leasing, the company which owns the aircraft and which had given it to Mallya on lease, to pick an agency to conduct the fresh auction. The agency should be an expert in holding auctions, independent and not controlled by the government or any other body, it said.

The next hearing would be on October 6 when C.J. Leasing’s lawyer would inform the court of the agency it wants to appoint for the fresh auction.

The HC was hearing a petition filed by the Service Tax department seeking recall of the auction, as the highest bid was lower than the reserve price.

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