TaxTMI 
TaxTMI 
2026 (9) TMI 208
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....ir Singh, Sr. Adv., Ms. Aanchal Tikmani, AOR, Mr. Naman Tondon, Adv., Mr. Mujadid Gilani, Adv., Mr. Dama Seshadri Naidu, Sr. Adv., Mr. Ashutosh Ghade, AOR, Ms. Saloni Meshram, Adv., Mr. Abhishek Swaroop, Adv., Ms. Sanya Sud, AOR, Mr. Sahil Raveen, AOR, Ms. Akhila Palem, Adv., Mr. Dhruv Kohli, Adv., Mr. Balaji Srinivasan, AOR, Mr. Ajesh Kumar Shankar, Adv., Mr. Subornadeep Bhattacharjee, Adv., Mr. Vishwaditya Sharma, Adv., Ms. Harsha Tripathi, Adv., Ms. Kanishka Singh, Adv., Ms. Suganya TS, Adv., Mr. Parikshit Pitale, Adv., Ms. Amrit Sharma, Adv., Mr. K.Shiva, Adv., Mr. Rohan Dewan, Adv., Ms. Aakriti Priya, Adv., Ms. Preetika Dwivedi, AOR, Mr. Abhisek Mohanty, Adv., Mr. Ansh Rajauria, Adv. JUDGMENT PER V. MOHANA, J. 1. Leave Granted in all the Special Leave Petitions. 2. The Appeals arise out of following four different proceedings preferred by the Appellant, Decree Holder, Ras Al Khaimah Investment Authority (for short the "RAKIA") against the Judgement Debtor, Respondent i.e., Nimmagadda Prasad (for short the "NP") along with other Respondent entities - Matrix Pharmacorp Pvt. Ltd. (for short the "Matrix"), Tianish Laboratories Pvt. Ltd. (for short the "Tianish"), IQues....
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....est at the rate of 6% p.a. from 05.10.2021 until date of payment. This order was upheld without modification by the Superior Court - Civil Circuit Court in Cassation vide order judgment dated 27.12.2022 (RAK Foreign Decree). Appellant contends that it is this RAK Foreign Decree that the Appellant is seeking enforcement of in India. The Appellant contends that the: i. NP directly or indirectly owns and controls a web of companies including IQuest and other Respondent entities. ii. Appellant is a judgment creditor of NP and, by extension, a judgment creditor of IQuest and other Respondent entities which are part of NP's web of companies operating as a unified structure directly or indirectly through NP in disregard of their separate corporate proceedings. II. Proceedings before Execution Court: 7. Appellant contends that the RAK Foreign Decree is a decree of a superior court of a reciprocating territory and thus executable in India as a decree passed by the district court as per Section 44Aof the Code of Civil Procedure, 1908 (for short the "CPC"). 8. Due to non-satisfaction of the RAK Foreign Decree, the Appellant filed two separate execution petitions, i.....
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....our separate applications for addition of Matrix and Tianish as parties, along with the addition and disclosure of their assets and further sought injunction against them in the pending Hyderabad Execution Proceedings: i. CEA No. 20 of 2025 seeking disclosures from Matrix and Tianish about assets owned and controlled by them; ii. CEA No. 21 of 2025 seeking addition of assets of Matrix and Tianish to the Execution Petition. iii. CEA No. 22 of 2025 seeking addition of Matrix and Tianish as a party to the Execution Petition. iv. CEA No. 23 of 2025 seeking injunction against the alienation of assets of Matrix and Tianish. 14. All these applications remain pending before the Commercial Courts of Hyderabad. III. Proceedings before the High Court of Telangana 15. Alleging that the merger between Matrix and Tianish violates the undertaking submitted by IQuest before the Commercial Court, Hyderabad and is in contempt of the order dt. 01.05.2024, Appellant filed Contempt Case No. 1378 of 2024 before the Telangana High Court (for short the "High Court") against IQuest and its stakeholders, Swathi Gunupati Reddy (NP's daughter), Viatris and also aga....
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....mpany shall not alienate any of its assets without prior intimation to and approval of the High Court. ii. In the event the Company intends to create a charge over the assets by raising loans or for any other purpose the same shall be done only after informing the High Court. V. Proceedings before the National Company Law Appellate Tribunal 21. Aggrieved by the order dated 10.03.2025 passed by the NCLT, Appellant filed two separate Appeals viz. Company Appeal (AT) (CH) No. 46/2025 against the order approving the Merger Application and Company Appeal (AT) (CH) No. 47/2025 against the dismissal of the Intervention Petition before the NCLAT (for short the "NCLAT Appeals"). 22. The NCLAT vide order dated 06.08.2025 dismissed the Appeals filed by the Appellant. It is against order dated 06.08.2025 passed by the NCLAT, Appellant filed Civil Appeal Nos.12561-12566/2025, before this Court. 23. The Respondents, on the other hand filed NCLAT Appeal bearing Company (AT) (CH) 49/2025 against the order dated 10.03.2025 passed by the NCLT insofar as it granted the protective directions contained in paragraphs 16(xix) and 16(xx) (for short the "NCLAT Cross Appeals"). The Resp....
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....pleadment Application, the same was allowed and Moschip was impleaded as Respondent No. 3. Submissions on behalf of Appellant: 29. Dr. Abhishek Manu Singhvi and Mr. Gopal Sankaranarayanan, Ld. Senior Counsels for the Appellant advanced the case on three interlinked grounds - first, the underlying decree is valid, binding and remains substantially unsatisfied; second, that the Judgment Debtor and his family have, through a series of corporate arrangements and transactions, sought to dissipate or shield assets from execution; and third, that the corporate respondents cannot avoid scrutiny merely by invoking the doctrine of separate legal personality where the surrounding circumstances demonstrate pervasive familial control and the use of corporate entities as instruments for asset protection and diversion. The Appellant submitted that the Respondents acted in concert and with common intent, suppressing relevant facts from the executing court while simultaneously pursuing regulatory approvals from the Competition Commission of India (for short the "CCI"). They made applications before the CCI under the green channel route and got automatic approval without mentioning ongoing jud....
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....at it has been compelled to adopt a multi-front approach to preserve the efficacy of the decree and prevent its frustration through successive corporate or asset-level transactions. Further, any relaxation of the existing status quo or injunctions ought to be made conditional upon adequate security being furnished for the entire outstanding decretal amount. 34. They further submitted that 75% of the decretal value remains unsecured. The present value of the RAK Foreign Decree as on 23.07.2026 is approximately 949.96 crores. They submit that the Status Quo Order dated 15.10.2025 ought to be continued until the present value of RAK Foreign Decree is satisfied. Absent a restraint on further transfer/dissipation by NP directly or indirectly through his immediate family members and entities in the web of companies would cause irretrievable prejudice to the Appellant's effort in the execution proceedings and being left with the paper decree. They pray for expeditious disposal of the Execution Proceedings and further prays for appointment of a forensic audit professional to determine the assets available with NP, his family members and affiliates to satisfy the RAK Foreign Decree. S....
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....for the RAK Foreign Decree, they placed reliance on Section 60 of CPC stating that only property of Judgment Debtor can be attached and he is a stranger to the RAK Foreign Decree. 40. Ld. Senior Counsel for NP submitted that there is no finding by any court that NP transferred, diverted or dissipated any asset to defeat the RAK Foreign Judgment. He further submitted that NP has disclosed his assets on affidavit before the Commercial Courts, and the disclosure shows that none was disposed of or applied towards either impugned transaction, which is subject matter of the Contempt proceedings from which the present proceedings arise. The Appellant does not even allege that any of NP assets were used. Indeed, even going by the list of transactions identified by the Appellant itself, none involved any transfer of NP's assets after the RAK Foreign Decree. The Mudhra Transaction was Matrix's acquisition of Tianish, financed by inter alia third-party institutional investors and NP did not contribute anything to Matrix's acquisition of Tianish. Ld. Senior Counsel for NP submitted that prima facie the RAK Foreign Decree is not enforceable. 41. Ld. Senior Counsel for IQuest submi....
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....y of the company and the absence of any legal or factual basis for treating it as an alter ego of NP or IQuest. Ld. Counsel submitted that the corporate veil can only be pierced upon clear and cogent evidence being presented and after proper enquiry on pleadings and evidence which is not there in the present case and therefore it cannot be done. 45. Ld. Counsel further submitted that NP was not an investor in Matrix, has never held any shares in Matrix or exercised any legal, managerial, or beneficial control over Matrix. Similarly, Swathi did not fund the acquisition either. Pranav was only an investor/promoter stakeholder and his relationship with NP does not convert his independent investment or the investments of unrelated institutional or domestic investors into the assets of NP or his family. 46. He submitted that Matrix is a distinct juristic entity which was never a party to the original RAK proceedings before the Civil Major Circuit and neither was it a party to the statement or order dated 01.05.2024 passed by the Commercial Court of Hyderabad. The fact that Matrix was incorporated after the passing of the underlying RAK Foreign Decree, cannot by itself give rise to....
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....any application having been filed against IQuest. Once Matrix's financing obligation was satisfied, IQuest was removed as a party and the provision pertaining to termination fee was deleted from the agreement. Submissions on behalf of Moschip Technologies 52. Mr. Balaji Srinivasan, Ld. Counsel on behalf of Respondent Moschip submitted that Moschip is a publicly listed company incorporated in 1999, substantially predating the acquisition of any shareholding by the family. It is submitted that the company is presently managed by professional and independent persons who are unconnected with NP. Particular reliance is placed upon the position of its Chairman, who is stated to be a retired IAS officer and former Chief Secretary of Telangana. 53. Ld. Counsel submitted that the family's involvement in Moschip is limited and non-executive in nature. He further submitted that the restraint imposed upon Moschip was based only upon an oral apprehension and that no specific application had been filed seeking relief against Moschip. He submitted that the proposed acquisition of VLPL by Moschip was fully disclosed to the regulatory authorities and was expressly characterized as a no....
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....ng, this Court allowed the petitioner a period of one month from the date of the communication to him of the final order which the Central Government might pass on his revisional petition to enable him to file a petition for special leave to appeal if he was so advised. Then the order recorded the undertaking given by the Solicitor-General .... Indeed the petition seeks to suggest that the undertaking was that the revisional petition would be disposed of immediately in day or two, and, since the revisional petition was not disposed of within the time mentioned by the Solicitor-General, the petitioner says that all the respondents are guilty of contempt. It is clear that the petitioners grievance and the prayer for a writ are entirely misconceived. The petitioner is entirely in error in assuming that, on behalf of the Union of India, any undertaking was given that his revisional petition would also disposed of within a day or two .... The petitioner presumably thinks that the Court's order required that his revisional petition should be disposed of by the Central Government within a month. This assumption is entirely unwarranted." This decision, therefore, clearly shows....
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....circumstances we are in agreement with the findings of the High Court. The Statement made by IQuest before the Commercial Court, Hyderabad in its Counter Affidavit as recorded in the order dated 01.05.2024, cannot be treated as a firm conviction to qualify as an undertaking in terms of Babu Ram Gupta (supra) and Patanjali Ayurved Ltd., In re. (Supra). It is merely a clarificatory statement. All that is said by the IQuest was that at that point in time it had decided not to go ahead with the acquisition of Viatris. Subsequently, the Commercial Court did not take up the matter saying that there is no urgency in the matter. However, Matrix and Tianish proceeded with the merger which also involved the interest of IQuest and Viatris. However, the apprehension of the Appellant that NP and the Respondent entities could potentially dissipate the assets of NP and transfer his holding or the holding of his immediate family members to different entities is not without basis. This Court has taken into consideration the series of changes that have been brought about between NP and his family holdings, where the fact that he has an advisory role or that the family has a decisive role is clearly ....
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....y applications before the Commercial Courts. Their interests are to be protected in the meantime. This Court is conscious of the fact that rendering any final opinion in respect of merits of the Execution Petition or about the status of corporates or lifting of the corporate veil at this juncture will affect any decision that may be taken in the pending proceedings. 65. However, this Court has to take note of the fact that RAKIA has obtained a foreign judgment after contest, and the decree remains to be executed. RAKIA has instituted several connected proceedings to protect its rights as a decree holder. It is apposite to note that NP's contentions with regard to objections under Sections 13(a) to 13(f) read with Sections 44A and 47 of the CPC have been dismissed by the Commercial Courts. It is informed that there is a subsequent Revision Petition under Article 227 filed by NP before the High Court. However, in the said proceedings there is no stay in respect of execution proceedings. It is also noted that one of the contentions of the Appellant herein is that the Civil Revision Petitions are not maintainable. However, this Court is not expressing any opinion in respect of the s....
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....he genuine apprehension of the decree-holder, we find that the interim protection granted by the NCLT on 10.03.2025 ought not to have been disturbed by the NCLAT. 70. This Court had, vide order dated 16.03.2026, referred the Parties to Mediation by Chief Justice Mr. U.U. Lalit (Retd.), which however, it did not fructify. 71. Considering the above, as a matter of prudence and in keeping with the sequence of events, the Status Quo Order passed by this Court ought not to be vacated without the furnishing of appropriate security. The Appellant has shown sufficient cause for the imposition of furnishing of additional security by the Respondents. Therefore, we deem it appropriate to modify the status quo orders, subject to the Judgment Debtor furnishing additional security as directed below pending final satisfaction of the decree. 72. At this juncture, we have to only note that the present value of the decree inclusive of interest till 23.07.2026 is a sum of Rs.949.96 crores, out of which NP has been able to provide security to the extent of Rs.231.70 crores and also deposited title deeds of Medchal Land which the Appellant values approximately as INR.150 crores, though it is t....