External affairs ministry suspends Mallya's passport for 4 weeks

Mallya, a Rajya Sabha member, holds a diplomatic passport.

In case the passport is revoked, the ED could also ask the Interpol to issue a red-corner notice.

Earlier, the CBI faced flak for revoking a lookout notice that made it easier for Mallya to flee.

Mallya left the country in March after the investigating agencies and lender banks were closing on him. He has since been telling the agencies, including the ED, that he needs more time to appear as he was busy in chalking out details related to repayment of loans.

This is not the first time the businessman has troubled the enforcement agency. In 2015, the Supreme Court had imposed a penalty of Rs 10 lakh on him, refusing to entertain his request for quashing criminal proceedings against him for not honouring summonses.

In 1995, The ED registered a case against him under Foreign Exchange Regulation Act, when his company paid a foreign company, without informing the Reserve Bank of India.

Meanwhile, the liquor baron is, reportedly, considering making a revised offer of repaying Rs 6,000 crore in three installments. The banks are looking at recovering the principal amount of Rs 4,900 crore immediately while the rest of the amount, which mostly comprises of the interest accrued overtime may be recovered in installments. A settlement may be reached later this month.

Earlier, Mallya's offer to repay Rs 4,000 crore was turned down by the banks. He reportedly offered to repay Rs 2,000 crore immediately and another installment of Rs 2,000 crore once the company's pending case against an aircraft engines firm is settled. The refusal by the banks to agree to his offer had prompted the SC to ask Mallya to disclose his assets.

"I am not sure if he would come back even if the passport is revoked," the finance ministry official said when probed if the ED request would force him to join the investigations. "It depends on the proceeding in the court," he added.

While the Regional Passport Office could revoke his passport, the decision may be challenged in the Court. "The government can revoke his passport since as per the Act they have wide powers. The ED did not seem to have any option left when he was not responding to their requests," a lawyer associated with the case said.

Lalit Modi, the businessman who kick-started Indian Premier League, who too fled to Europe in 2010 fearing action by the investigators, too had his passport revoked. Although, even then he was allowed to stayed in the UK after the authorities said that cancellation of passport doesn't mean that he can't continue his stay. The British authorities had noted that the country's law permits stay without a passport.

The Delhi High Court in 2014, had set aside the decision of the Ministry of External Affairs, and come down heavily on the ED. It said that the agencies investigations moved too slowly and that the FEMA case against Modi didn't require his personal appearance.

Edited by Joyjeet Das