GVK sues Kingfisher for issuing rubber cheques
23 June 2012
Concerned by a number of cheques issued by Kingfisher Airlines that have bounced, a consortium led by GVK - India's second-largest airport operator which operates the Mumbai international airport, among others - has launched legal proceedings against the financially crippled airline.
Kingfisher Airlines, promoted by liquor baron Vijay Mallya, owes Rs60 crore to Mumbai International Airport Ltd. The dues have added up as it has not paid airport charges (parking, landing and navigation) for over a year now, an Economic Times report said citing airport sources. During the year, the airline issued cheques worth Rs30 crore, but none was honoured.
The paper's sources said MIAL filed a suit in a Mumbai civil court last week when a cheque for Rs5 crore issued by Kingfisher bounced. "This has been going on for a while and the airport operator thought the time has come to take legal action," said an MIAL source.
This is the first time an airport operator has taken the cash-strapped airline to the courts over non-payment of dues. In the past, the Airports Authority of India - to whom the airline owes Rs272 crore, according to information provided by civil aviation minster Ajit Singh to Parliament - has threatened to take legal action, but has avoided the extreme move so far. Kingfisher also owes Rs80 crore to the GMR-operated Indira Gandhi International Airport in Delhi.
Meanwhile, lenders to Kingfisher will review the status of its account next week, after the company announced losses in excess of Rs1,000 crore in the fourth quarter of the 2011-12 financial ended in March.
''The condition of the airline has gone from bad to worse,'' State Bank of India chairman Pratip Chaudhuri told reporters after the bank's annual general meeting in Mumbai on Friday. SBI leads the consortium of lenders to Kingfisher.