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PNB contests HC order letting Kingfisher to be represented

Punjab National Bank (PNB) has challenged a Delhi High Court order allowing lawyers to represent Kingfisher Airlines in proceedings initiated by the bank to decide whether the grounded carrier and its regulators are wilful defaulters for non-payment of dues.

PNB in its plea has sought setting aside of the high court's 28 August order which had also stayed the bank's notice to the extent it threatened to hold the airlines and its guarantors United Breweries (Holdings) Ltd (UBHL) and Vijay Mallya as wilful defaulters in the event of no reply within seven days from 21 August.

The court had said the operation of the default notice would not come into effect as PNB will have to give to the airline, within a week from 28 August, the documents relied upon by it and Kingfisher was given two weeks time thereafter to respond.

In its appeal PNB said the airline had not disclosed that a similar plea of the carrier, against United Bank of India, was dismissed by a division bench of the Calcutta High Court on 16 July.

It has also submitted that the airline's appeal against the Calcutta High Court's decision was dismissed by the Supreme Court on 2 September.

‘Set aside the impugned judgement and order dated 28 August, 2014 passed by the single judge of the high court,’ the bank's petition has prayed. The Delhi High Court in its 28 August order had held as ‘unacceptable’ the bank's reasons for not allowing the airlines to be represented by lawyers in the proceedings initiated to decide whether the grounded carrier is a wilful defaulter for non-payment of dues and directed that two advocates be allowed to represent Kingfisher. Kingfisher had moved the court seeking directions to the bank to rescind its 21 August notice and those issued earlier as well as to restrain it from taking any action against the airlines in pursuance of the same.

The court had also said that the hearing before the committee will be held on 22 September and would be concluded the same day within six hours in order to prevent any delay in the issue.

According to PNB, the airline has wilfully defaulted in payment of outstanding dues of over Rs 774 crore.

It has also submitted that Kingfisher Airlines has already been held as a wilful defaulter by United Bank of India for non-payment of dues. The bank’s appeal is likely to come up for hearing next week.
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