TaxTMI 
TaxTMI 
2026 (8) TMI 527
X X X X Extracts X X X X
X X X X Extracts X X X X
....k statements, income tax returns and any alleged alienation thereof from the commencement of the New York proceedings. The order further restrains the Appellant from dealing with or creating third party rights in respect of any asset allegedly owned or controlled by him, whether directly or indirectly. 2) Mr. J.P. Sen, learned senior Counsel appearing on behalf of the Appellant submits that, the direction contained in the impugned Order for disclosure is vague, as neither the Suit nor the Interim Application identifies the date from which the N. Y. litigation commenced. He submitted that, the disclosures ought to apply prospectively and not retrospectively. 3) He relied upon the decision of the Supreme Court in the case of L. K. Prabhu vs. K. T. Mathew reported in 2025 SCC OnLine SC 2577, to submit that the property sought to be attached must belong to the Defendant on the date of institution of the Suit; property already transferred prior thereto cannot be attached. Compelling disclosure of property transferred before the suit's institution, he argued, serves no legal purpose where attachment itself would be unavailable. 4) According to him, the captioned Suit was filed i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted that mere possession of a money decree does not, in law, justify a roving inquiry into an individual's personal and financial affairs. A judgment debtor may be compelled to disclose only to the extent necessary for execution-which, in this case, the Respondents have yet to obtain from the Indian Court. The impugned Order is thus wholly disproportionate and invasive, particularly because: (i) no prima facie finding exists against the Appellant; (ii) there is no finding of apprehension that the Appellant will dissipate assets; (iii) the Appellant was denied an opportunity to reply; and (iv) the foreign judgments remain untested against Section 13 of the CPC. 9) Mr. Sen further contended that the Respondents created artificial urgency after nearly three years of inaction, now seeking a sweeping retrospective audit. He relied on Raman Tech. & Process Engg. Co. v. Solanki Traders (2008 2 SCC 302) to argue that Order XXXVIII Rule 5 of the CPC is not intended to convert unsecured debt into secured debt; invoking the provision as leverage to coerce settlement ought to be discouraged. 10) Counsel reiterated that a judgment debtor under a money decree cannot routinely be direct....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ly Rs.2,300 crores). Pursuant to these judgments, the Respondents initiated enforcement proceedings. 17) In response to enforcement, Rolta India filed an Affidavit (30th September 2020) citing FEMA restrictions requiring RBI approval for transferring shareholding in overseas subsidiaries. On 20th October 2020, the New York Supreme Court passed a Turnover Order directing: (a) Rolta India to transfer its subsidiary shares; (b) Rolta Global BV and Rolta Middle East FZ-LLC to do likewise; and (c) all Rolta Group entities to remit cash on hand (approximately USD 2 million) for enforcement. Notably, neither Rolta India nor its subsidiaries appealed these orders. 18) Within nine days, on 29th October 2020, six Rolta subsidiaries filed for Chapter 11 bankruptcy. The Respondents promptly moved to dismiss, alleging bad faith and circumvention of the Turnover Order. The US Bankruptcy Court (11th January and 9th February 2021) dismissed the proceedings, holding that: (i) the action was designed to delay and frustrate the decree; (ii) proposed reorganization plans with Streamcast and AdviseX failed; (iii) the filing divided the dispute....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Appellant's conduct transcends simple breach of the foreign judgment; it constitutes aggravated and willful disobedience compounded by subsequent evasion. Under the Indian Laws the Appellant falls under the definition of "officer" under Section 2(59) of the Companies Act, 2013, which is reproduced hereinbelow for ready reference: "Section 2(59): "officer" includes any director, manager or key managerial personnel or any person in accordance with whose directions or instructions the Board of Directors or any one or more of the directors is or are accustomed to act." 22) Consequently, the Appellant also falls under the definition of "officer in default" under Section 2(60) of the Companies Act, 2013, which is reproduced hereinbelow: "Section 2(60): "officer who is in default", for the purpose of any provision in this Act which enacts that an officer of the company who is in default shall be liable to any penalty or punishment by way of imprisonment, fine or otherwise, means any of the following officers of a company, namely:- (i) whole-time director; (ii) key managerial personnel; (iii) where there is no key managerial personnel, s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h is undisputedly 6th June 2018. 28) The Appellant's argument that the foreign judgment's compliance with Section 13 of the CPC requires determination in the captioned Suit is also without substance. The Appellant cannot approbate and reprobate, a principle long establised. The Appellant cannot feign ignorance of Suit No. 6612/2020 filed on 19th November 2020 (with Interim Application No. 6618/2020) seeking to restrain enforcement of the New York judgment and Turnover Order. This very act acknowledged the foreign judgment's existence and enforceability. The Appellant cannot now feign ignorance of that judgment or demand its re-adjudication as a prerequisite to disclosure. He stands estopped by his own conduct and pleadings. 29) A plain reading of Section 13 of CPC demonstrates that a foreign judgment is conclusive as to directly adjudicated matters between the same parties, subject only to specified exceptions. Section 13 is reproduced for ready reference: "13. When foreign judgment not conclusive.-A foreign judgment shall be conclusive as to any matter thereby directly adjudicated upon between the same parties or between parties under whom they or any of....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 33) Following the principles articulated in Wander Ltd. v. Antox Pvt. Ltd. (1990 Supp SCC 727), we decline to interfere with the Single Judge's exercise of discretion. The discretion was neither arbitrary, capricious, nor perverse, nor did it ignore settled principles governing interlocutory injunctions. The Supreme Court has clearly directed that appellate courts will not reassess materials or reach contrary conclusions if the trial court's conclusion was reasonably possible on the record. The trial court's reasoned exercise of discretion should not be disturbed merely because the appellate court would have decided differently. Relevant paragraph reproduced for ready reference: "14. The appeals before the Division Bench were against the exercise of discretion by the Single Judge. In such appeals, the appellate court will not interfere with the exercise of discretion of the court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the court had ignored the settled principles of law regulating grant of refusal of interlocutory injunctions. A....