Mallya is facing a case of loan default of over Rs 9,400 crore and his resignation sent to Rajya Sabha Chairman already stands rejected.
"Having considered the whole matter, including Dr Mallya's letter, the Committee on Ethics unanimously decided at its meeting on May 3 to recommend to the House that Dr Vijay Mallya be expelled with immediate effect," the Committee on Ethics headed by senior Congress leader Karan Singh said in the report.
The Upper House will now take a call on the recommendation made by the ethics panel in the report "on the non-disclosure of liabilities such as the loans taken from different banks in his assets and liabilities returns by Dr. Vijay Mallya, Member, Rajya Sabha."
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Mallya, in his letter in response to the panel's offer to explain his position, "has raised some legal and constitutional issues which are not tenable, because the Supreme Court has clearly upheld the power of the Rajya Sabha to expel its members for gross misconduct unbecoming of a Member of the House", the Ethics panel report said.
The panel said "it is a matter of regret that Dr Mallya has thought it fit to impugn the (Supreme Court) judgment and impartiality of the Committee on Ethics as well as the entire House."