BPCL sues Kingfisher Airlines

Oil refiner, Bharat Petroleum Corporation Ltd has sued Vijay Mallya promoted Kingfisher Airlines in the Bombay High Court to get back its dues
worth Rs 300 crore. The oil company filed an arbitration petition in the Bombay High Court last week after all its attempts to get KFA to repay its dues failed, a source in the oil company said. The oil company has also asked KFA to lift fuel only after it pays cash at the time of delivery and withdrawn the credit facility, the source said.
When contacted, a Kingfisher Airlines spokesperson denied any legal battle is on with BPCL. "We are in compliance with the credit arrangements with the OMCs from whom we lift fuel as agreed from time to time," the spokesperson said. But sources in the oil refining company say the oil company had to hire law firm Udwadia and Udeshi to make the airline cough up its dues. The petition was filed on June 19th, court documents show.
Last year, the government had given 6-months to airlines to pay up their dues in time. While other airlines managed to repay part of their dues to BPCL, Kingfisher failed to repay its dues in time. Apart from BPCL, Indian Oil has also asked Kingfisher to pay for its fuel on cash and carry basis. Indian Oil had also encashed Kingfisher's bank guarantee of Rs 50 crore after the latter's cheque had bounced.
25/06/09 Dev Chatterjee/Economic Times

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Categories: Kingfisher Jun 2009