The Supreme Court is set to hear a significant Rs 500 crore money decree case in July, involving the Ras Al Khaimah Investment Authority and industrialist Nimmagadda Prasad, after a high-profile mediation attempt by former Chief Justice of India U U Lalit proved unsuccessful.
Illustration is used for representative purpose only. Illustration: Dominic Xavier/Rediff
Key Points
- The Supreme Court will hear the Rs 500 crore money decree case in July after mediation efforts, led by former CJI U U Lalit, failed.
- The case involves Ras Al Khaimah Investment Authority (RAKIA) seeking to enforce a UAE civil judgment against Hyderabad-based industrialist Nimmagadda Prasad.
- The dispute stems from the ‘Vanpic Project’, a failed 2008 joint venture, with RAKIA alleging misappropriation of USD 120 million by Prasad.
- Prasad has already deposited Rs 125 crore as cash security and submitted original title deeds for a 37-acre land parcel in Telangana as part of court-mandated security.
- The court has directed day-to-day hearings on the main case in the second week of July, while allowing Prasad to use funds for day-to-day affairs of his firms.
Taking note of a failed mediation process undertaken by former Chief Justice of India U U Lalit, the Supreme Court on Monday agreed to hear in July a plea related to the execution of a money decree of Rs 500 crore passed by a UAE court in favour of Ras Al Khaimah Investment Authority and against Hyderabad-based industrialist Nimmagadda Prasad.
At the outset, senior advocate Abhishek Singhvi, appearing for Ras Al Khaimah Investment Authority (RAKIA), informed a bench comprising Chief Justice Surya Kant and Justices Joymalya Bagchi and Vipul M Pancholi that the mediation process has failed and the matter be now heard by the court itself in July.
Mediation Efforts and Court Directives
On March 16, the CJI-led bench had appointed U U Lalit as the sole mediator to amicably resolve the dispute over the execution of a money decree of Rs 500 crore passed by the UAE court in favour of RAKIA and against Prasad.
The bench, on Monday, said that it is not going to hear interim applications at the moment and will accord day-to-day hearing on the main case in the second week of July.
RAKIA is seeking to enforce a UAE civil judgment for 267,941,374 dirham (approximately Rs 543 crore principal and Rs 643 crore with interest).
The case stems from the ‘Vanpic Project’, a failed 2008 joint venture to develop ports and an airport in Andhra Pradesh.
RAKIA has alleged that Prasad, in collusion with former RAKIA CEO Khater Massaad, misappropriated USD 120 million intended for the project.
Security Furnished by Prasad
Senior advocate Gopal Subramanium, appearing for Prasad, had earlier informed the bench that the industrialist deposited Rs 125 crore as cash security as directed through a previous order.
The senior lawyer also said that the original title deeds of a 37-acre land parcel in Telangana have also been submitted in the court. He added that the land parcel is free from encumbrances.
He had also said that his client was willing to undergo mediation for an amicable settlement of the case.
Singhvi and another senior advocate, Gopal Sankaranarayanan, appearing for the foreign firm, said that they were agreeable to the time-bound mediation to resolve the dispute with a condition that the status quo about the assets of Prasad be maintained and no third party be created till the conclusion of mediation.
Taking note of the consent of both parties, CJI Surya Kant had appointed Justice Lalit as the sole mediator and requested him to undertake the mediation for expeditious disposal.
The bench had asked Justice Lalit to undertake a mediation exercise in hybrid mode to enable the representatives of RAKIA to appear through videoconferencing, keeping in mind the security situation in the Gulf region.
Court’s Clarifications and Future Proceedings
Clarifying its earlier order, the CJI said the Hyderabad-based businessman can use the funds for running “day-to-day affairs” of his firms, including payment of salaries and will not alienate immovable properties without prior nod of the court.
Earlier, the top court had directed Prasad to deposit Rs 125 crore in cash security and submit the original title deeds of the 37-acre land parcel in Telangana in the case stemming from the failed 2008 joint venture to develop ports and an airport in Andhra Pradesh.
It had granted time to the industrialist to propose an alternative arrangement for the remaining security.
The bench had also asked Prasad to furnish a security of Rs 600 crore for hearing his plea against the UAE decree.
The court took note of the affidavit filed by Prasad in compliance with its February 12 order and analysed the proposal to deposit the security worth Rs 600 crore.
“In a purported attempt to honour the observations, which this court proposed to issue on the previous date re: furnishing a security comprising Rs 600 crore with the Registry of this Court, the deponent – respondent no. 5 has offered the following three assets,” the bench noted in the order.
The businessman offered shares and assets allegedly valued at Rs 212 crore, presently attached by commercial courts under orders passed on September 5 and October 6, 2023.
Besides additional cash security of Rs 125 crore, Prasad also offered a 37-acre land parcel at Devarayamjal village in Medchal-Malkajgiri district, claimed to be worth Rs 408 crore.
On the issue of the 37-acre property, known as Medchal Land, the bench said the original title deeds should be deposited with the registrar of the top court with an affidavit of undertaking that the land is free from all encumbrances except that it was earlier attached by the Enforcement Directorate and was released subject to the furnishing of an indemnity bond.
On the issue of additional cash security of Rs 125 crore, the bench took note of the statement of Subramanium that the amount shall be deposited within one week.
“On doing so, the registry is directed to keep that amount in the UCO Bank of the Supreme Court in a high-interest-bearing FDR initially for a period of six months with an auto-renewal facility,” the bench had said.
It said the interim arrangement regarding the security shall be without prejudice to the rights of the parties.
