A three-judge bench of the Supreme Court comprising Justice Surya Kant, Justice Joymalya Bagchi, and Justice V. Mohana has ruled that a statement made by an entity in a counter-affidavit indicating it was no longer pursuing a transaction constitutes a clarificatory statement rather than an unconditional undertaking capable of attracting contempt proceedings. However, taking note of a prima facie pattern of corporate restructuring and pervasive familial control that risked reducing a foreign money decree to a “paper decree,” the Court directed judgment debtor Nimmagadda Prasad and associated respondent entities to jointly and severally deposit an additional ₹200 crore security with the Supreme Court Registry within two weeks. The Court also restored the National Company Law Tribunal’s (NCLT) protective conditions regarding asset alienation post-merger and directed the Commercial Courts in Hyderabad and Ranga Reddy to expeditiously dispose of the main execution petitions within four months.
Background of the Dispute
The appellant, Ras Al Khaimah Investment Authority (RAKIA), a public entity affiliated with the Government of Ras Al Khaimah (UAE), entered into a government-to-government contract through a Memorandum of Understanding with the Government of Andhra Pradesh for the development of the Vadarevu Port, Nizampatnam Port, an industrial corridor, and an airport (the “VANPIC Project”). RAKIA entrusted investment funds to Nimmagadda Prasad (NP), which it alleged were misappropriated.
RAKIA initiated civil proceedings before the UAE courts. On February 2, 2022, the Ras Al Khaimah Court of First Instance held that RAKIA was a victim of a fraudulent scheme and directed NP to pay AED 267,941,374 (approximately ₹543.92 crore) with 6% interest per annum from October 5, 2021. The decree was affirmed without modification by the Civil Circuit Court in Cassation on December 27, 2022.
Seeking to execute the decree in India under Section 44A of the Code of Civil Procedure, 1908 (CPC) as a decree from a reciprocating territory, RAKIA initiated execution petitions before the Commercial Court, Hyderabad (CEP No. 19 of 2023) and the Commercial Court, Ranga Reddy (CEP No. 19 of 2023). In October 2023, RAKIA filed applications to implead IQuest Enterprises Pvt. Ltd. (IQuest) and restrain its assets, alleging NP exercised pervasive control over a web of entities.
On May 1, 2024, the Commercial Court of Hyderabad closed RAKIA’s injunction application against IQuest after IQuest stated in its counter-affidavit that it had initially been interested in the acquisition of Viatris but subsequently decided not to go ahead. RAKIA contended that IQuest later circumvented this statement by routing the acquisition of Tianish Laboratories Pvt. Ltd. through Matrix Pharmacorp Pvt. Ltd., an entity where NP’s family members hold major stakes, with IQuest acting as a back-stop for a termination fee.
When RAKIA initiated contempt proceedings, the High Court of Telangana dismissed the contempt petition on November 7, 2025, holding that the counter-affidavit statement was merely clarificatory and not an undertaking, and declined to apply the alter ego doctrine in summary contempt proceedings. Separately, in scheme proceedings under Section 230 of the Companies Act, 2013, the NCLT had approved the Matrix-Tianish merger with protective caveats preventing asset alienation without prior court intimation, but the National Company Law Appellate Tribunal (NCLAT) subsequently expunged those protections while dismissing RAKIA’s challenge. These proceedings culminated in the appeals before the Supreme Court.
Submissions by the Parties
Appearing for RAKIA, Senior Advocates Dr. Abhishek Manu Singhvi and Gopal Sankaranarayanan submitted that the underlying decree remains valid and substantially unsatisfied, with its current decretal value standing at approximately ₹949.96 crore as of July 23, 2026. They argued that NP and his family engaged in a concerted pattern of corporate restructuring to dissipate and shield assets across group entities. They contended that IQuest’s statement was a binding undertaking that was willfully breached through circuitous arrangements, including automatic Green Channel approvals obtained from the Competition Commission of India without disclosing pending litigation. They urged the Court to pierce the corporate veil, maintain the status quo, and ensure full security is furnished to uphold comity of courts under Section 44A CPC.
On behalf of NP, his family members, and IQuest, Senior Advocates C.A. Sundram, Mukul Rohatgi, D.S. Naidu, Balbir Singh, and Neeraj Kaul argued that NP had already substantially complied with the Court’s interim directions by depositing ₹225 crore in cash and submitting title deeds of 37 acres of Medchal land valued at over ₹400 crore. They asserted that RAKIA was paralyzing legitimate business operations through multiple applications. Counsel for IQuest emphasized that NP had exited IQuest between 2012 and 2014, eight years prior to the foreign decree, and that IQuest had merely undertaken an antecedent back-stop fee obligation that was never actually deployed. They maintained that under Section 60 CPC, only the judgment debtor’s property can be attached.
Senior Advocate Shyam Divan, appearing for Matrix and Tianish, argued that Matrix is an independent legal entity financed through institutional private equity, not an alter ego of NP or IQuest, and that internal consolidation via merger did not lead to asset dissipation. Senior Advocate S. Niranjan Reddy, appearing for Viatris, submitted that IQuest’s back-stop role for a termination fee was antecedent and later deleted once Matrix’s financing obligations were satisfied. Counsel for Moschip Technologies Ltd. submitted that Moschip is an independently managed, publicly listed entity incorporated in 1999 and that family shareholding was non-executive and unrelated to the decree.
The Supreme Court’s Analysis and Findings
Examining whether IQuest’s statement in its counter-affidavit amounted to a legal undertaking, the bench reviewed established precedents. The Court cited Babu Ram Gupta vs Sudhir Bhasin & Anr., reiterating that:
“It is not open to the Court to assume an implied undertaking when there is none on the record. It was on this ground that this Court negatived the plea of contempt of court. It is well-settled that while it is the duty of the court to punish a person who tries to obstruct the course of justice or bring into disrepute the institution of judiciary, this power has to be exercised not casually or lightly but with great care and circumspection and only in such cases where it is necessary to punish the contemner in order to uphold the majesty of law and dignity of the courts.”
The Court further referenced the principles laid down in Patanjali Ayurved Ltd., In re v. Union of India, observing:
“An undertaking given to the Court has the same force as an order of the Court and breach thereof would amount to contempt in the same manner as a breach of an injunction. Whether a statement made by a party or its counsel could amount to an undertaking, would depend on the words used in the statement made and the facts and circumstances of a case.”
Applying these standards, the bench affirmed the High Court’s conclusion, holding that the counter-affidavit did not constitute an unconditional, unambiguous undertaking intended to bind the parties under the Contempt of Courts Act, 1971. Consequently, contempt actions could not be maintained against Matrix, Viatris, or Moschip.
Nonetheless, the Court observed that the sequence of circuitous corporate transactions raised legitimate concerns regarding asset dissipation:
“Prima facie, this Court finds merit in the Appellant’s contention that the Respondent NP is attempting to camouflage his assets and is engaged in dissipating them with a view to defeating the execution of the decree. If the status quo order is vacated without any condition for appropriate security, it would amount to obstruction of justice.”
Emphasizing international judicial comity under Section 44A CPC, the Court stated:
“The principles of comity of nations demand us to respect the order of RAK Foreign Decree and due weightage has to be given to such order even while passing an interlocutory order. In the absence of any conditions being imposed, the decree would be rendered incapable of execution, thereby breaching the principle of comity of courts and undermining the regime of reciprocal enforcement.”
Addressing the NCLAT’s decision to remove the safeguards imposed during the merger of Matrix and Tianish, the Supreme Court ruled that the NCLAT ought not to have disturbed the interim protective conditions granted by the NCLT on March 10, 2025.
For the purpose of balancing equities pending execution, the Court assigned a provisional “guesstimation” value of ₹250 crore to the disputed Medchal land (claimed at ₹400 crore by the respondents and ₹150 crore by RAKIA) and found that additional security was warranted.
Final Decision and Directives
Disposing of all the appeals, the Supreme Court issued the following key directions:
- Upholding Contempt Dismissal: Affirmed the High Court’s finding that the statement by IQuest did not amount to an unconditional undertaking, and upheld the dismissal of contempt proceedings.
- Additional Security Deposit: Directed NP and the respondent entities, jointly and severally, to deposit an additional ₹200 crore with the Supreme Court Registry within two weeks, over and above the existing deposits and title deeds.
- Restoration of NCLT Protections: Disposed of the appeals against the NCLAT orders, effectively restoring the protective oversight over post-merger asset transfers.
- Alter Ego Question Left Open: Left the substantive questions of whether NP’s family-controlled entities form a unified structure and whether the corporate veil should be pierced to be decided independently by the Commercial Courts in Hyderabad and Ranga Reddy, clarifying that those courts will not be bound by observations made in the interlocutory proceedings.
- Expeditious Disposal: Directed the Commercial Court of Hyderabad and the Commercial Court of Ranga Reddy to hear and decide the main execution petitions along with all pending applications within a strict timeframe of four months.
Case Details
Case Title: Ras Al Khaimah Investment Authority v. Matrix Pharmacorp Private Limited & Anr. (with connected appeals)
Case No.: Civil Appeal Nos. 12993-12994 of 2025 (with C.A. Nos. 12561-12566 of 2025, C.A. No. ___ of 2026 @ SLP (C) Nos. 27277-27279 of 2025, and C.A. No. ___ of 2026 @ SLP (C) No. 35892 of 2025)
Bench: Justice Surya Kant, Justice Joymalya Bagchi, and Justice V. Mohana
Date of Judgment: September 01, 2026
