Mallya default case: Kingfisher airbus auction fails as bidding amount was low

“Since the service tax department has rejected the bid, the auction will have to be held again after getting a clearance from the court,” said an official.

[related-post]

Watch Video: What’s making news

The jet was auctioned through MSTC by the service tax department on June 29 and June 30 after the Bombay High Court observed, there was no legal trouble in auction of the aircraft which is on financial lease. Proceeds of the sale has to be deposited with the high court.

The high court is scheduled to hear the case on July 4 said sources.

According to sources, the service tax department had hoped to raise at least Rs 150 crore from the auction of the airbus.

The department had seized the airbus in December 2013, to recover tax dues of over Rs 800 crore.

The luxury aircraft is owned by C J Leasing (Cayman) Ltd and was given on lease to Kingfisher Airlines.

The tax authority has seized at least eight aircraft owned by Kingfisher Airlines and Mallya. Last year, Mumbai International Airport Private Limited (MIAL) had auctioned Mallya’s 11-seater jet to a scrap dealer in Mumbai for Rs 22 lakh.

This is not the first time when an auction of Mallya’s properties has failed. Earlier on March 17, a consortium of banks led by the State Bank of India were unsuccessful in auctioning Kingfisher House in Mumbai as it did not attract a single buyer due to the high reserve price of Rs 150 crore. On April 30, once again auction of brands and trademarks of Kingfisher Airlines turned out to be a damp squib as it failed to attract a single bidder for these pledged assets at a reserve price of Rs 366.70 crore.

Mallya’s Kingfisher Airlines allegedly owes over Rs 9,000 crore to at least 17 Indian banks. Mallya and his companies have come under the scanner of multiple investigating agencies in the country and the Supreme Court over loan default.