Kingfisher airbus to be auctioned again after buyer backs out
SGI Commex claimed to have bought airbus A319-133 at a price of Rs 27.39 crore ($ 4.1 million), which was nearly one-sixth of the reserve price.
In Short
- A Kingfisher airbus that was auctioned is slatted for a re-auction.
- The bidder who bought it informed the Bombay High Court that they want to withdraw.
- SGI Commex, the bidder bought two airbus for one-sixth the price.
An aircraft of embattled Kingfisher Airlines is slatted for a re-auction as the bidder SGI Commex informed the Bombay High Court on Monday that they want to withdraw their bid.
DUES TO BE CLEARED
The auction of the jet was challenged by the Mumbai airport, who claimed an unpaid amount of airport fees.
As per an order passed on August 22, SGI Commex will have to pay an additional amount under taxes, hangar charges and the cost of equipment to be installed to make the aircraft air-worthy.
Justice SC Dharmadhikari was hearing a plea filed by the service tax department, challenging a 2014 decision of the debt recovery tribunal that had waived off dues worth Rs 18 crore of the Kingfisher Airlines.
Last week, court had observed that Mallya "Couldn't have come up with a better name than 'Kingfisher' for his entity, for just like the bird can fly with no boundaries to prevent it, he flew away."
WHAT'S HAPPENING
Service Tax Department had informed the court that it wished to recall the auction as the highest bidder who bid for the airbus had bid only "81 per cent of its total cost".
Its likely that the aircraft will undergo rebidding to recover dues. Additional Solicitor General Anil Singh said that both the Union government and the Service Tax Department were committed to selling the airbus and only needed to work out some modalities.
SGI Commex claimed to have both airbus A319-133 at a price of Rs 27.39 crore ($ 4.1 million), which was nearly one-sixth of the reserve price.
On June 30, the department had conducted an e-auction for the airbus advertising it as "designed exclusively for exotic and luxurious use" but recalled it after the highest bidder at the time offered just Rs 1 crore.
In August this year, it conducted a second auction saying that it had set the reserve price of the airbus at Rs 152 crore. That's when SGI Commex bought it at a much lower price.