Companies & Sectors
Economy & Nation Exclusive
Now Kingfisher House, near Sahar served eviction notice for not paying rent and charges

What banks have not done against Kingfisher Airlines for its outstanding loan of Rs7,000 crore turning into to non-performing assets (NPAs), has been done by realtors on whose premises the “King of Good Times” has its operational offices

What banks have not done against Kingfisher Airlines for its outstanding loan of Rs7,000 crore turning into to non-performing assets (NPA), has been done by two realtors on whose premises the “King of Good Times” has its operational offices. Samruddha Realtors and Dhruvam Realtors, the owners of the premises, have served a winding up notice to the airline for failing to pay license fee, amenities and maintenance charges since November 2011.

Kingfisher House, the famous building of 52,350 sq ft on Mumbai’s Western Express highway known as its head office, was repeatedly given reminders for its pending dues. Despite this, the airline failed to comply and hence the termination notice, dated 11th April 2012, was served. As per the clauses in the agreements, since the airline has failed to pay its dues, a notice terminating the agreements has been given. The termination will come in effect on the expiry of 30 days after the receipt of the notice.

A similar notice is been served by Dhruvam Realtors to the Kingfisher Airlines for not paying the license fee, amenities and maintenance charges since November 2011 for using the premises, of around 6,450 sq ft, at Marol, Andheri. This plot originally belongs to Dhruvam Realtors.

According to the notice by Samruddha Realtors, the airline failed to comply with three agreements. As per the leave and license agreement dated 17th October 2010, Kingfisher promised to pay Rs26.17 lakh as license fee per month, along with the service tax. In the amenities agreement, also signed on the same date, Kingfisher agreed to pay Rs25.12 lakh per month for the services and amenities. The airline is also liable to pay Rs11.51 lakh per month as maintenance as per the Maintenance Agreement. (The document is been reviewed by Moneylife)

Similarly, Dhruvam has also served the notice as the airline failed to comply the same three agreements. Kingfisher Airlines, as per the leave and license agreement dated 17th October 2010, had promised to pay Rs3.22 lakh as license fee per month, along with the service tax. In the amenities agreement, also signed on the same date, Kingfisher agreed to pay Rs3.09 lakh per month for the services and amenities. The airline is also liable to pay Rs1.41 lakh per month as maintenance as per the Maintenance Agreement.

As per both these agreements, the amount agreed to be paid on monthly basis was to be escalated by 15% after the initial period of the three years. All charges were to be paid by Kingfisher on 20th or before of each month and on for delayed payment it has to pay interest at 18% per annum.

Having failed to pay the dues since November 2011, a letter was sent of 28th February 2012, reminding the airline to pay the pending dues along with interests within 30 days of the receipt of the letter. However Kingfisher Airlines neglected the same and the dues remained unpaid. 

Samruddha Realtors had warned Kingfisher Airlines that if it uses the premises in spite of termination of license and other pending dues, such use shall be “unauthorized and as party in unauthorised occupation you will be liable to pay damages…”

The realtor further said that if Kingfisher Airlines failed to comply with the notice, it will be “constrained to take such proceedings as they may be advised including the proceeding for winding up of your company at your entire risks as to costs and consequences.”

Incidentally, financial news channel CNBC TV18 reported that the Income Tax department has sent third reminder, about its show-cause notice sent on 7th March, to the top management of the airline. It has sought an explanation on why prosecution proceedings should not be initiated for the violation of Tax Deducted at Source (TDS) payments.

The cash-strapped airline has also been struggling to pay the salaries of its employees. Recently, it was reported that around 200 engineers of Kingfisher Airlines stayed off from duty as they were not paid, despite repeated assurances.

Industry experts point out that the troubled airline has pending dues on many fronts. In first week of April, it was asked to Rs60 crore as service tax. Earlier, 40 bank accounts belonging tot the carrier were frozen by the service tax department after it failed to pay dues of Rs40 crore on the given deadline of 29th February.

Mounting debt and financial crisis has taken toll on the operations of the airline as a number of its flights are been cancelled. Vijay Mallya, chairman of the airline, had requested banks for fresh working capital to run its operations. In a meeting with banks, Mr Mallya had asked for Rs200 crore. However, banks are not in a mood to lend more. The 18-bank consortium headed by the State Bank of India, together, has a total exposure of over Rs7,000 crore in Kingfisher. Most of these banks have classified their exposure to the company as a NPA (non-performing asset). SBI is the biggest lender with an exposure of around Rs1,408 crore. On 4th April, SBI chairman Pratip Chaudhuri had said that Kingfisher Airlines can be viable if it gets more equity.

The financial crunch has also taken toll of its share price. Kingfisher Airlines has touched a new record low of Rs14.25, after the government ruled out any Foreign Direct Investment proposal immediately.




5 years ago

Kingfisher must be part of a case study in every Management Institute.
Each and every management student must learn HOW NOT TO DO BUSINESS.


5 years ago

KF is the most mismanaged and corrupt organisation in the recent history. Rs.7000 due is just the tip of iceberg.
There has been no line of control in management and no work ethics followed.
The company has not paid salaries since Jan 2012 and there are still some people left to receive Dec11 salaries.
The company has not paid the service tax collected by its passengers, the tax deducted as source and the PF amount collected from its 4000+ employees has not been deposited, no rent for any of its business premises has been paid, airport operating taxes has not been paid, fuel charges are pending, there is not a single vendor who has been paid which the airlines has been using their services at leisure (free infact), the aircraft lessors are wanting their aircrafts back for non payment of lease. The airline has not given any of its future plans to anyone, but is only asking for more money to swindle.
The list is never ending.
Our laws are only for the common man who is suffering for non payment of dues and salaries.

Kingfisher Vendor

5 years ago



5 years ago

as i recall, vijay m gave personal guarantees to these loans & also got paid for this 'service'. what is preventing banks from invoking the guarantee & seizing his personal assets? after all, this is what they do in case of a common man, right? perhaps the water is too murky...

my conspirary thoery is that KF is using all tactics to bring down share prices so that well-connected people can lap up the entire stock for pennies. then govt will announce FDI & it will look like all woes have ended & share price will shoot thru the roof & the same idiots now will be held with duds. cheers!


5 years ago

Kingfisher Airlines due is over Rs 7,000 crore. This Airline has never made any profit. From where are they going to repay this amount. The banks should immediately seize all their assets and liquidate them and recover their dues. Vijay Mallya has to be held personally accountable and prosecuted under law for defaulting on loans and taxes. Allowing this airline to continue running and hope that it repays all its dues to the banks is a dream that will never turn into reality for these PSU banks. Also all the bank officials who have sanctioned these loans without taking proper security and guarantees and checking the credit worthiness of the airline should also be prosecuted. Why is the govt keeping silent. If A Raja is in jail because of the 2 G scam, then also Vijay Mallya and all these bank officials should also be behind bars for cheating and fraud and causing such a huge loss to the banks.

a v moorthi besides TIHAR

5 years ago

on 01.04.2011 the No 1 PSB had advertised on the mast head of Times of India Delhi edition having surpassed business of 6,00,000 crores this year till today 18 Banks who have financed KFA are yet to declare the results as on 31.03.2012. Landlord may be able to evict but with every passing day these 18 Bamks will be adding up more losses thanks to KFA. Rather the majority stake holder in these Banks being Govt, it should send packing the EDs , CMDs , the GMs in credit Department who were responsible for converting loans of KFA to equity earlier with out doing proper credit appraisal as they were drowing themselves in the hospitality provide by KFA , Rather defaulting Tax collected is misappropriation and should have led to imprisonment of KFA higher ups.

chandra shekhar

5 years ago

* first, #we need to find out if, King-Fisher
intentions were n now 'r' malafide or clean ...?
* it would a sad day for the King if, his Airlines business is declared "NPA" officially ...!
* i some how feel, King is still a better player amongst those, who have raised FUNDS in $$$ Billions & in Rs/- as "unlisted & listed Companies" since 2003 (almost 8 to 10 years) n have yet
not started any businesses, nor they pay any investment returns nor dividends nor refunding the principle amounts . Atleast, Mallya is carryingout
his business activities & should He fail,
i think #we have Tata's , who can take-it-over & give a fair-price, such that all
the Lenders can "restore" FAITH in Fishers to further their cause in near FUTURE...!!
* #we need to give him some breathing-space as, the larger issue associated with it is JOBS of employees, who may be asked to leave, which would b even more Painful...!!!

Personal Finance Exclusive
Birla Sun Life Insurance fined for only 2 out the 22 violations

IRDA has penalised Birla Sun Life Insurance Company a paltry Rs6 lakh for a slew of violations, some serious including using unlicensed entities to sell insurance

The Insurance Regulatory Development Authority (IRDA) had detected 22 irregularities in the functioning of Birla Sun Life Insurance Company (BSLI) but penalised it a paltry Rs6 lakh for two of the violations. What is most pertinent is that it took the regulator around a year and a half, from the date of its first inspection letter (22 November 2010), to pass the judgement (13 April 2012).

IRDA levied Rs5 lakh for a major violation of using unlicensed entities to solicit insurance business, thus violating an IRDA circular which states, “No insurer shall distribute the product through any person who is not licensed as per the provisions of the Insurance Act, 1938, for the purpose of the soliciting and procuring insurance business.”

BSLI admitted to this misdeed but was fined just Rs5 lakh for this. This is pocket money for the insurer and makes a mockery of the regulatory system. We had covered the issue of unlicensed entities way back in 2010, over here (

The second and last indictment accused the company for flouting guidelines on Group Insurance Policies dated 14 July 2005, wherein it is the insurer’s responsibility to ensure that claims payments go directly to the beneficiary, or insured. However, the company had apparently been sending cheques, in event of claims, in favour of the master policy holder (for instance, any firm which has taken insurance on behalf of its employees) instead of the beneficiary (the employee), thus putting the onus on the policy holder to settle the cheque, and absolving itself of the responsibilities. For this violation, the company was fined just Rs1 lakh.

Thus a total of Rs 6 lakh was fined by BSLI for two out of 22 violations. This isn’t the first time that Moneylife has written about selling through illegal intermediaries. Insurance companies are merrily using the illegal multi-level marketing (MLM) system to push insurance. When caught they promptly disown any linkage and promise to “take action.”

It is pertinent to note that it took as much as eight months to issue a show-cause notice (27 July 2011) after BSLI replied to IRDA’s initial observation. And after the insurer had replied to the show-cause notice on 30 August 2011, IRDA then took more time, till 1 February 2012 before calling for a personal hearing. Only then, after the hearing, the final order (13 April 2012) was passed.

We cite a few important transgressions and IRDA’s decision on each of them:

•  Violation of Section 40A of Insurance Act, 1938

(IRDA) Inspection Observation 30(d): Commission being paid to agents even when premiums are being funded by the company under premium waiver benefit.

(IRDA) Decision: Insurer has submitted that there could be policy servicing requests during the term of the policy to agent and the practice of payment of commission in such cases may motivate agents to continue promoting such waiver benefits wherever applicable which again is in the interest of policy holders. On examining the reply of the Insurer charges are not pressed. However insurer is hereby directed to stop paying the commission to agents in all such cases where premium is funded by the company as part of premium waiver benefit.

So, for the last two years, the company has been ‘motivating’ agents by paying commissions to them even though when it shouldn’t have. BSLI claims that this is in “the interest of the policy holders”. Really? Well, motivating agents to ram policies down consumers’ throats is most definitely NOT in consumers’ interests.

• Violation of Regulation 2(CC) of IRDA (Investment Regulations, 4th Amendment) 2008

Inspection Observation 2: Insurer has categorized the investments in mutual funds as “Money Market Instruments” for the purpose of public information. (Product Brochure of Titanium plus Plan)

Decision: The insurer states that BSLI invests in liquid mutual funds and they have included the mutual fund in the ‘Money Market and Cash’ segment in the product brochure to represent investments in short-term investment. The insurer has also submitted that now an alteration was made in the product brochures to show mutual fund separately.

This is a classic case of mis-selling by misrepresenting a product in flyers and brochures. Companies will window-dress their product to make it look ‘safe’.

• Violation of Section 5 of IRDA (Investment Regulations, Fourth Amendment), 2008

IRDA Inspection observation 1(d): Insurer has breached the prescribed limit of 5% of fund size while investing in Mutual Funds and categorizing them as “Approved Investments”.

IRDA Decision: The insurer has submitted that he has acted as per the directions of the authority issued vide Regulation 3 (Investments) point 3, Investment Regulation 5 and The Asset Liability and Solvency Margin of Insurers Regulations, 2000, Schedule IIA 1(c). Insurer has also confirmed that in view of the IRDA Circular IRDA/F&I/CIR/INV/173/08/2011 dated 20th July, 2011, realigned its portfolio to come in compliance with the issued circular effective 1st October, 2011. Taking into account the submissions made by the insurer, the charges are not pressed.

• Violation of note 4 to Regulation 5 of IRDA (Investment Regulations, 4th Amendment) 2008

Inspection Observation 1(g): The company has taken blanket approval for raising the limit up to 15% in respect of industry/group exposure.

Decision: The insurer has submitted that the investment committee, as per the authority given to it by the board of directors, reviewed the exposure norms at group and industry level in its 41st meeting held on 28 January 2011 and has restricted the increased exposure to limited sectors only. The submissions of the insurer are taken into account. However, the delegation of authority, given to it by the board, by investment committee of the insurer is not proper and the insurer is advised to strictly follow henceforth the prescription of Note 4 to Regulation 5 of IRDA Investment Regulations. 

IRDA is being too lenient, especially concerning investments which are a crucial part of an insurance company’s functional model.

•  Violation of 4(6) of IRDA (Protection of policyholders’ interests) Regulations, 2002

Inspection Observation 16: Proper follow up is not done with the proposers to obtain pending requirements.

Decision: The insurer submitted that auto generated communication on pending requirements dispatched to proposers on the 10th, 20th, 30th and 38th day from the application receipt date with documentary proof. The insurer also informed the house that follow-up is being done through SMSs for all the pending proposals The submissions made by the insurer that proper follow up is indeed being done to obtain pending requirements from proposers is considered and the charges are not pressed.

• Violation of F&U Procedure

Inspection Observation 32: Top-up premium remitted along with the first premium was being accepted without minimum mandated additional risk coverage even when the top up premium is more than 25% of the first premium.

Decision: The insurer submitted that it has happened due to a system error which has been now rectified and assured that going forward such instances would not recur. Taking into account the submissions made by the insurer the charges are not pressed.

• Violation of provisions of Clause 27 of Licensing of Corporate Agents’ Guidelines, 14/07/2005

Inspection observation 33: It is observed that the company is not carrying out due diligence at the time of appointment of “Business Mentors”. The business mentors as mentioned in the report are working in different capacities with many insurers in contravention of the business mentor model as described by the company.

Decision: The insurer has submitted that they prohibit business mentor’s association with any other insurance company by taking self declaration on the same while recruiting. If they are found to be in association with any other life insurance company action against them is initiated. The insurer has also expressed that due to lack of central repository of corporate agents, due diligence could not be carried out while recruiting business mentors. They also submitted documentary proof of action taken on business mentors who are associated with more than one insurance company. Taking into account the submissions made by the insurer the charges are not pressed.

The remaining violations were ‘spared’ by IRDA.

Earlier, IRDA had admitted to industry-wide mis-selling ( However, if a company can violate regulations and norms and get away with a paltry fine, it would set a poor precedent.

Earlier, Sahara Life Insurance had too committed a host of violations. We had written about it here. ( Sahara, too, was let off by IRDA in a similar fashion. A few months ago, HDFC Standard Life Insurance was slapped with a fine of just Rs5 lakh, for delaying a settlement claim ( 




5 years ago

The article is being too harsh on the company - pls note that IRDA has provided explanations on why the charges have been dropped. With regard to commissions being on cases where premium is waived, can you pls enlighten how many such cases have been discovered ? As I understand, BSLI has over 4 million policies and would be surprised if there are even 0.01@% of cases on waiver - so pls do not make a mountain out of a molehill. As regard investment classifications, pls note interpretation differences have known to happen in numerous cases. I am a policyholder of BSLI, but am not perturbed by the nature of violations mentioned above.

P M Ravindran

5 years ago

Beware of Star Health and Allied Insurance Co Ltd also. They also default on services after selling the policy but continue to pay commission to fictitious agents even when a policy holder renews the policy without the help of an agent!


5 years ago

Hon sir

Pl find the attached letter (work order) issued by Municipality balotra cease this file immediately and stop this work order urgently to reach free and fair investigation
I am sending you this mail in the interest of PUBLIC.
BALOTRA 344022
MOBILE 9214021660

suresh kumar gupta

5 years ago

जोधपुर.फाइनेंस कंपनी को दिए गए ब्लैंक चेक से फर्जी हस्ताक्षर कर इंश्योरेंस पॉलिसी करने का मामला सामने आया है। लोन देने पर फाइनेंस कंपनी की ओर से लिए गए 10 खाली चेक में से एक चेक को कंपनी ने अपनी सिस्टर कन्सर्न इंश्योरेंस कंपनी को सौंप दिया। इस चेक से लोन लेने वाले की पत्नी के फर्जी हस्ताक्षर कर उसके नाम से ढाई लाख रुपए की फर्जी पॉलिसी कर दी।

यही नहीं, इंश्योरेंस कंपनी ने ब्लैंक चेक से 25 हजार रुपए निकाल कर पॉलिसी का प्रीमियम भी वसूल लिया। पीड़ित ने अब कंपनी के खिलाफ रातानाडा पुलिस में रिपोर्ट दी है। पुलिस ने बताया कि चौपासनी हाउसिंग बोर्ड निवासी दीपचंद ने एसबीआई से 33 लाख रुपए का लोन 16 प्रतिशत की दर से लिया था।

पीडब्ल्यूडी कॉलोनी स्थित एचडीएफसी इंश्योरेंस कंपनी के प्रतिनिधि ने दीपचंद से संपर्क कर उन्हें 13 प्रतिशत ब्याज पर लोन दिलाने की का ऑफर दिया। प्रतिनिधि ने एचडीएफसी फाइनेंस से दीपचंद को 50 लाख का लोन मंजूर करवा दिया। इसमें से उन्होंने 33 लाख रुपए एसबीआई लोन के बदले अदा कर दिए और 17 लाख रुपए खुद ले लिए। लोन लेने पर दीपचंद ने कंपनी को 10 खाली चेक दिए।

गत दो अप्रैल को दीपचंद को बैंक से मैसेज मिला कि उनके खाते से 25 हजार रुपए निकले हैं। बैंक से जानकारी लेने पर पता चला कि किया तो एचडीएफसी लाइफ इंश्योरेंस में उनकी पत्नी राजबीरी के नाम से पॉलिसी के 25 हजार रुपए जमा किए हैं। दस्तावेज देखे तो उन पर राजबीरी के फर्जी हस्ताक्षर थे। भास्कर ने इंश्योरेंस कंपनी के ब्रांच मैनेजर अंकित शर्मा से इस बारे में बात की तो वे टालते हुए बोले कि इस बारे में वे बाद में बात करेंगे।

मैनेजर ही बताएंगे

राजबीरी की पॉलिसी हुई है लेकिन लोन के ब्लैंक चेक से भुगतान कैसे और क्यों हुआ, इसकी मुझे जानकारी नहीं है। इस मामले में ब्रांच मैनेजर ही कुछ बता सकते हैं।

पीयूष कुमार, पॉलिसी फाइनेंशियल

Retrospective change in I-T Act may yield around Rs40,000 crore

“The Income Tax department has made an estimation that the total tax implication in consequences of retrospective amendments introduced in Finance Bill 2012 may be to the tune of Rs35,000-Rs40,000 crore,” minister of state for finance SS  Palanimanickam informed the Rajya Sabha

New Delhi: The controversial proposal to amend the Income Tax (I-T)Act with retrospective effect to bring into the tax net Vodafone-type deals is expected to yield to the exchequer Rs35,000 to Rs40,000 crore, reports PTI.

“The Income Tax department has made an estimation that the total tax implication in consequences of retrospective amendments introduced in Finance Bill 2012 may be to the tune of Rs35,000-Rs40,000 crore,” minister of state for finance SS Palanimanickam told the Rajya Sabha in a written reply.

Finance minister Pranab Mukherjee’s Budget proposal, aimed at taxing Vodafone-type merger and acquisition deals involving domestic assets has generated lot of debate, with various global bodies claiming that the move would hurt foreign investment.

Once the amendment is approved by Parliament, the British telecom giant would have to pay Rs11,000 crore as tax for its acquisition of the Hutchison's stake in Hutchison Essar in 2007.

On the overall implications of the proposed amendment, Mr Palanimanickam said, “The figure of Rs35,000-Rs40,000 crore is an estimate and the exact amount is determined only when assessing officer completes assessment proceedings. The proceeding before assessing officer is a quasi judicial proceeding and the name along with demand raised is determined only on completion of such proceedings.”
In a separate reply, minister of state for finance Namo Narain Meena said: “Foreign investors make their decisions taking into account all relevant factors and the investments are admitted into the country within the framework of the applicable laws, rules and regulations formulated to promote the country's interest.”




5 years ago

This is a gross under estimate. When the government comes down to outright cheating, there ought to be no upper limit. This government seems to be bent on destroying the rule of law and natural justice in the country, to usher in an era of fiduciary arbitrariness and instability, harbinger of general anarchy. Hopefully, the courts will strike down the move as contrary to natural justice. That's the only hope for India.

We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)