Kingfisher Airlines Chairman Vijay Mallya suffered another setback on Saturday after lenders to his beleaguered airline took possession of the Kingfisher House.

The possession of the Kingfisher House was taken by the State Bank of India (SBI) - the biggest lender to Kingfisher Airlines. The Mumbai-based Kingfisher House is the headquarters of the grounded airline.

The property will be used auctioned and proceeds from the sale would be used to repay loans. The airline owes more than Rs 6,027 crore to lenders.

The Goa-based Kingfisher Villa is widely expected to be the next property that could slip into lenders' possession and go on sale.

Meanwhile, Central Board of Excise & Customs member Lipika Majumdar Roy Chowdhury has indicated Kingfisher owner Mallya may face prosecution for not paying service tax.

Speaking on the topic, Chowdhury said, "Prosecution is definitely a provision in the Act. And that decision of taking action on Kingfisher owner for not paying service tax arrears will be taken by the concerned commissioner."

The Directorate General of Civil Aviation (DGCA) had suspended Kingfisher Airlines' operating licence in October last year, after its employees went on strike due to non-payment of salaries for months. The airline's permit has since expired, though the civil aviation director can renew it within two years.