Honorable Union Minister of State for Science and Technology, Mr. Sujana Chowdary is another Vijay Mallya in his own right.
According to the petition filed by a Mauritius Bank, Sujana has a 100 per cent subsidiary firm called M/s. Hestia Holding Ltd in Mauritius which availed the loan of Rs 92 crore between February and June 2012. Sujana Universal stood as guarantor for the same.
When the bank realized that the company completely defaulted in repaying the loan installments, it sought the guarantor's response.
As chairman of Sujana Universal Industries Ltd, Sujana Chowdary, vide his communication dated October 16, 2012, admitted to the default, the bank said in its petition.
An additional fine of Rs 60 lakh was imposed on Sujana Chowdary towards legal costs. To date, he has not paid even 60 paise and the matter is pending in the Indian Courts.
Now, in order to effectively deal with Vijay Mallya type loan default cases, government today directed public sector banks to immediately invoke personal guarantees of promoter directors and recover loans from them in case the companies fail to repay.
Issuing the directive to heads of PSBs, the Finance Ministry regretted that they seldom recover loan from guarantors in case of loan default by companies.
"It has been observed that there are a less number of cases where action has been taken for recovery against guarantors for attachment of assets owned by them and sell the same for recovery of defaulted loan," it said while issuing the directive in consultation with the RBI.
The ministry further told banks that "it would be prudent to take steps against guarantors immediately when no sign of revival is visible".
It now remains to be seen what impact this latest decision will have on the great son of India, Sujana Chowdary.