Ms Mahal had paid for Mallya's living expenses and had got into financial problems
The Insolvency and Companies court of London High Court has reduced the personal allowance of Vijay Mallya by £4,000.
From his funds frozen due to legal action brought by Indian banks, Mallya can now access only £22,500 per month.
On Friday, July 12, 2019, Judge Catherine Burton called Mallya’s lifestyle “extravagant” and said, “there should be scope for further reduction”.
Judge Burton said this when she ruled on validating the amount that Mallya can access.
The former business tycoon had sought validation order for £26,585 for his monthly living expenses.
Judge Burton said it is “commendable” that Mallya reduced his expenses even though it emerged that he is a member of several exclusive clubs.
The validation order includes Mallya’s legal fees and personal needs such as insurance, transport, fuel, haircare, dry-cleaning, TV licence, personal care, medical prescriptions and other needs.
However, the banks’ counsel objected a validation order being made in respect of expenses supported by Mallya’s personal assistant Ms Mahal and son Siddhartha Mallya.
Ms Mahal had spent around £122,000 while Siddhartha, known as Sid, spent approximately £38,500.
The court heard that Sid paid for expenses concerning his father’s court cases and must be reimbursed.
Ms Mahal had paid for Mallya’s living expenses and had got into financial problems as a result. Therefore, she was eligible to be covered under the application for the validation order.
However, Judge Burton ruled that the majority of the expenses paid for by Ms Mahal were before the application and told her that they could not pay her back.
The court sympathised with Ms Mahal but stated that her “generosity” has now caused problems for her. They told that she should have known that paying for the expenses was a “risky affair”.
Even though the banks’ counsel opposed, the judge allowed £1,159 per month to be spent on a secure, high-speed internet connection for Vijay Mallya to use as part of his “consultancy services”.
Judge Burton said it was a necessary tool of trade.
Mallya’s counsel told the court that his high grocery bills and expensive club memberships were part of his business expenses.
Mallya’s validation application order also included an £83,802 legal bill that is owed to the Crown Prosecution Service (CPS) after he lost the extradition case at Westminister Magistrates’ Court.
The court was informed about the “critical urgency” in relation to the outstanding legal cost.
They were told that the “consequences of not paying could result in Mallya going to prison”.
Vijay Mallya lost the case in December 2018.
According to the Mumbai Mirror, the judge agreed in making a validation order in respect to the legal bill, therefore, saving Mallya from a potential jail term.