Author: Sahanadevi. S. Dongaragavi, B. V. Bellad Law College, Belagavi, Karnataka
To the point
Vijay Mallya’s case stands as a crucial illustration of the hurdles India faces in bringing economic offenders to justice across borders. After defaulting on loans exceeding ₹9,000 crore tied to Kingfisher Airlines, Mallya fled India in 2016, prompting Indian agencies to initiate an extensive extradition process with the UK and secure his arrest under international warrants. The prosecution combined the strength of India’s investigative bodies with new legislative tools like the Fugitive Economic Offenders Act, aiming not only to return the accused but also to recover public funds and set a legal precedent. Even as legal and diplomatic complexities have delayed actual extradition, the case reflects both the advances and limitations of India’s evolving financial crime enforcement.
Use of legal jargon
1. Fugitive Economic Offender (FEO), this term refers to an individual against whom an arrest warrant has been issued for serious economic crimes listed under the law, involving sums of at least ₹100 crore. Crucially, this person either flees India or refuses to return to face prosecution, thereby evading the Indian justice system. The law empowers courts to declare such persons as FEOs, enabling the government to confiscate their properties to protect public interest and uphold the rule of law.
2. Extradition, Extradition is the formal legal process through which one country surrenders an accused or convicted individual to another country to face criminal charges or serve a sentence. In India, this process is governed by the Extradition Act, 1962, ensuring that a person cannot escape justice simply by crossing borders. It requires cooperation between governments and typically demands that the alleged offence be recognized in both jurisdictions, a principle known as dual criminality.
3. Attachment of Property, when crime proceeds or assets related to economic offences are suspected, law enforcement agencies can temporarily seize these properties under legal protections provided by the Fugitive Economic Offenders Act and the Prevention of Money Laundering Act. This prevents offenders from disposing of or hiding assets while investigations and prosecutions are underway, thereby securing potential recovery for creditors and the state.
4. Dual Criminality, this key legal principle ensures that for a person to be extradited, the act they are accused of must be a crime in both India and the requesting country. This safeguards individuals from being sent abroad for acts that are not considered offenses locally and promotes fairness in international legal cooperation.
5. Non-Bailable Warrant (NBW), an NBW is a serious tool issued by Indian courts against individuals accused of grave offences. Unlike bailable warrants, it does not offer the accused an automatic right to bail upon arrest. It is often central to declaring someone a Fugitive Economic Offender, showing the court’s insistence on the person’s presence to face charges due to the severity of the alleged crime.
The proof
The pursuit of Vijay Mallya officially began in February 2017 when India submitted a formal extradition request to the UK under the India–UK Extradition Treaty. This came after Mallya fled India in March 2016 to avoid prosecution, facing multiple non-bailable warrants (NBWs) for alleged financial irregularities and default on loans totaling over ₹9,000 crore.
In April 2017, Mallya was arrested by the London Metropolitan Police but was granted conditional bail pending his full extradition hearings, a process that spanned several years, involving numerous court hearings, appeals, and detailed scrutiny of evidence on both sides. In December 2018, the Westminster Magistrates’ Court ordered his extradition, followed by approval from the UK Home Secretary in early 2019. Mallya exhausted multiple appeals up to 2020, but despite losing his final legal battles, actual extradition has been delayed due to complex procedural and diplomatic factors as of September 2025.
In parallel, India’s Enforcement Directorate (ED) and other authorities rigorously pursued asset recovery. They successfully attached and confiscated significant portions of Mallya’s assets within India, ultimately recovering and transferring over ₹14,131 crore to public sector banks, though full settlement remains elusive given accrued interest and penalties.
Further compounding his legal troubles, in 2022 the Supreme Court of India convicted Mallya of contempt of court for illegally transferring approximately $40 million overseas, ordering his imprisonment and directing asset recovery measures, actions reflecting India’s resolve to hold economic offenders accountable even beyond the extradition hurdles.
This chronology and asset recovery evidence neatly illustrate India’s dual-front approach, legal pursuit abroad for extradition and robust domestic enforcement to safeguard public resources and uphold justice in cases of large-scale economic fraud.
Abstract
The pursuit of Vijay Mallya, a high-profile economic offender, has rigorously tested the Indian legal system’s cross-border enforcement and diplomatic mechanisms. This article delves into the detailed facts of the Mallya case, the combined actions of the judiciary and the executive, and the foundational legal frameworks governing extradition and fugitive economic offenders in India. By exploring the tangible challenges and lessons that have emerged from this high-stakes pursuit, the analysis highlights both the triumphs and the limitations of India’s evolving approach to big-ticket financial crimes. The study draws exclusively on official laws, court records, and government documentation to ensure a credible, research-focused perspective.
The case laws
1. Enforcement Directorate v. Vijay Mallya, (2022) 6 SCC 440
In this significant judgment, the Supreme Court of India sentenced Vijay Mallya to four months’ imprisonment and imposed a fine of ₹2,000 for contempt of court. This ruling stems from Mallya’s refusal to comply with earlier court orders by transferring approximately $40 million overseas in violation of judicial mandates, hindering recovery efforts in the multi-crore loan default case involving Kingfisher Airlines. The Court underscored the sanctity of judicial orders and sent a strong message against such defiance by economic offenders.
2. State Bank of India & Ors. v. Vijay Mallya & Ors., EWHC 968 (Ch)
The UK High Court confirmed a judgment debt exceeding £1 billion against Vijay Mallya, including principal dues and interest, based on Indian judicial findings. This ruling formed the basis for the bankruptcy order against Mallya and firmly established his liability to Indian banks under UK law. Despite appeals, the judgment was upheld in 2025, reinforcing cross-border enforceability of Indian court orders.
3. Special Court under PMLA- Orders dated 2017 to 2022
The Special Court constituted under the Prevention of Money Laundering Act (PMLA) issued multiple orders permitting provisional attachment and confiscation of Mallya’s properties. These orders were passed under the powers granted by the Fugitive Economic Offenders Act (FEOA), following findings that Mallya’s companies engaged in fraudulent fund diversion. Assets including farmhouses, shares, and commercial properties worth thousands of crores were seized, enabling significant recovery for the lending banks.
4. Applicability of NBW and Financial Threshold under FEOA
Legal precedents have clarified that the declaration of a Fugitive Economic Offender requires as follows,
(i) issuance of a Non-Bailable Warrant (NBW) against the accused, and
(ii) the scheduled economic offence must involve a minimum amount of ₹100 crore.
These conditions filter cases for the application of the FEOA, ensuring focus on significant economic offences. Courts applying these criteria in the Vijay Mallya case have strengthened the statute’s framework to deter large-scale financial crime.
Legal framework
1. Extradition Act, 1962: This Act lays down the detailed legal procedure for surrendering accused or convicted persons between India and foreign countries. It relies heavily on bilateral treaties—such as the India-UK Extradition Treaty used in Mallya’s case—and includes key principles like dual criminality (the act must be punishable in both countries) and the rule of specialty (extradited persons can only be tried for specified offences). The Act ensures India’s cooperation with foreign jurisdictions while safeguarding legal rights during extradition.
2. Fugitive Economic Offenders Act, 2018 (FEOA):
Introduced to plug gaps in dealing with economic offenders who flee jurisdiction, the FEOA allows courts to declare individuals fugitive economic offenders (FEOs), permitting authorities to attach and confiscate their properties to protect public money. It applies only when the debt involved is ₹100 crore or more, and a valid Non-Bailable Warrant (NBW) exists. The Act also bars such offenders from filing civil suits, streamlining recovery.
3. Special Courts under PMLA:
Specialized courts constituted under the Prevention of Money Laundering Act (PMLA) conduct trials for offences under the FEOA and related laws. These courts have powers to attach, freeze, and confiscate assets, speed up proceedings and ensure focused adjudication of complex economic offences connected with money laundering and fugitive offenders.
4. Prevention of Money-Laundering Act, 2002 (PMLA):
The PMLA empowers authorities to investigate and attach property acquired through illicit means. It complements the FEOA by providing a regime to track and recover proceeds of crime, reinforcing India’s crackdown on economic offenders who try to shield assets or launder money internationally.
Conclusion
The saga of Vijay Mallya’s prosecution is a watershed moment in India’s fight against fugitive economic offenders. It has exposed the complex challenges intertwined with cross-border extradition, where legal formalities and foreign court decisions can delay justice despite clear evidence. Yet, India’s robust domestic legal reforms—highlighted by the Fugitive Economic Offenders Act and strengthened enforcement agencies—have set new standards for asset recovery and deterrence. The Mallya case underscores the urgent need for seamless global cooperation and swift treaty enforcement to effectively tackle financial crimes that transcend national boundaries. It serves as a powerful reminder that while the road to justice may be long, persistent legal rigor and international collaboration can reshape how economic offenders are pursued and held accountable.
FAQs
Q1. What legal mechanisms enabled Mallya’s asset freezing and seizure?
Ans: Proceedings under the FEOA and PMLA, along with special court orders, led to the attachment, confiscation, and eventual transfer of Mallya’s assets to public sector banks.
Q2. What are the key requirements for declaring an FEO?
Ans: The accused must face a valid NBW, the offence must be scheduled and above ₹100 crore, and the fugitive must be outside India or refusing to return.
Q3. Why has Mallya not been extradited so far?
Ans: Despite court rulings in India and the UK, Mallya’s appeals and pending administrative steps in the UK have delayed actual extradition enforcement, reflecting complexities of international law and judicial discretion.
Q4. Has the full amount owed by Mallya been recovered?
Ans: Official records confirm the recovery of over ₹14,000 crore from Mallya’s assets, but full debts (including interest and penalties) remain outstanding.
Q5. What is the broader significance of this case?
Ans: It has influenced major legal reforms in India’s approach to economic offences, boosting preventive, punitive, and recovery frameworks, and has set an example for the pursuit of other high-profile offenders using coordinated cross-border actions.
