To support UB Group promoter Vijay Mallya, counsel Uday Holla, on Friday said that his client was a "small-time" defaulter unlike companies like Reliance who he claimed are bigger defaulters, and the banks were hounding the small defaulters and leaving big defaulters off the hook.

"Recently the RBI had said that these banks do not take action against large fries, but small fries. My client Mallya is a small defaulter compared to Ambani's Reliance. Some of the companies have defaulted to the tune of Rs 40,000 crore, and nothing happens to them," he claimed.

The Debt Recovery Tribunal here on Friday reserved its order on state-run SBI's application seeking securement of the lenders' first right on the $75 million payout from Diageo to UB Group promoter Vijay Mallya under a recent sweetheart deal.

Earlier, after filing the objections before DRT, Mallya's counsel Uday Holla submitted that $75 million cannot be attached because his client is getting the severance package after signing a non-compete agreement under which he would not enter into liquor business for next five years.

On the application seeking Mallya's arrest, Holla said such an action would tantamount to demeaning the institution of Rajya Sabha because he is a "respected member" of the Upper House.

The State Bank of India has filed three other applications including one seeking arrest of Mallya and impounding of his passport, as the bank approached DRT seeking action against him for defaulting on loans. SBI, which heads the consortium of 17 lenders to the grounded Kingfisher Airlines, had moved DRT here against the airline's chairman Mallya in its bid to recover over Rs 7,000-crore dues from him.

DRT judge Benakanahalli, on priority basis, took up the application for securing a first right on the $75 million severance package that Mallya will be getting for quitting Diageo-owned United Spirits (USL) as its Chairman last week under a sweetheart deal.

The judge said other three applications - seeking impounding of Mallya's passport, getting him arrested and getting full disclosure of his assets in the country and abroad - will be heard later.

"For now, I am taking up the application seeking to secure lenders' first right on the payout from Diageo on priority basis. I will take up other applications later," he said.

George Joseph, counsel for SBI, submitted that going by Mallya's track record, banks cannot take his statements on face value and be sure of getting money from Mallya if the $75 million are not secured.

"Going by Mallya's track record, we cannot take his statements on face value. Once the money is secured, we will be sure that it will not go anywhere, else the bank will not get anything," he said.

Holla also submitted that due to the increasing fuel prices, not only his client's airline Kingfisher Airlines, but also some of the known carriers around the world suffered losses, and to pressure Mallya, asking him to pay the debt "is not okay".

"It is not that (only) Mallya's airline was suffering losses, but other airlines around world also suffered - Swiss Air, the Indian Airlines and four US airlines, also suffered huge losses. Even as my client was paying up the loans, it is not right to hound my client for the payup," he said.

He said the airline had already paid Rs 1,500 crore and "what is it that the banks want more when he has paid the principal amount in spite of airline industry facing crisis the world over." Mallya and Kingfisher Airlines owed Rs 7,800 crore to a consortium of 17 lenders led by SBI which had an exposure of over Rs 1,600 crore to the now defunct airline.

Since January 2012, the loan was not serviced. Other lenders include Punjab National Bank, Bank of Baroda, Canara Bank, Bank of India, Central Bank of India, Federal Bank, Uco Bank and Dena Bank among others.

Last year, SBI declared Mallya as wilful defaulter. Last month, Punjab National Bank had also declared him, his group holding company United Breweries Holdings and the long-defunct Kingfisher Airlines as wilful defaulters.

As part of a deal, Diageo said it would pay $40 million immediately to Mallya with the balance being payable in equal installments over the next five years. It will also absolve Mallya of all liabilities over alleged financial lapses at the company founded by his family.

(With agency inputs)