Bombay High Court Upholds Asset Disclosure Order Against Rolta Founder In ₹2300 Cr Foreign Judgment Case

The Bombay High Court on 30 July upheld an order directing Rolta India founder and former Chairman and Managing Director Kamal Singh to disclose his assets and restraining him from creating third-party rights over them in proceedings seeking enforcement of New York State Supreme Court judgments involving claims of about Rs. 2,300 crore.

A Division Bench of Justices A.S. Gadkari and Kamal Khata noted that a party cannot avoid enforcement of foreign judgments by questioning their enforceability while simultaneously seeking to restrain their execution. The judges held:

"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 established. 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."

The dispute arose from proceedings initiated by Pinpoint Multi Strategy Master Fund, Value Partners Greater China High Yield Income Fund and Value Partners Fixed Income SPC, Value Partners Credit Opportunities Fund seeking enforcement of two New York State Supreme Court judgments dated 11 May 2023 and 22 November 2024 against Rolta entities for USD 235.71 million, equivalent to about Rs. 2,300 crore.

Singh challenged the interim disclosure order, arguing that the foreign judgments had not yet been examined under Section 13 of the Code of Civil Procedure (which provides circumstances in which foreign judgments are not conclusive) and that the direction to disclose assets was premature.

The respondents argued that Singh, as the controlling mind of the Rolta Group, had repeatedly avoided compliance with the New York court orders and frustrated enforcement of the judgments.

Rejecting Singh's challenge, the Court held that his contention that the foreign judgments required prior determination under Section 13 CPC before a disclosure order could be issued was without merit. It noted that Singh could not simultaneously seek to restrain enforcement of the New York judgments and argue that their enforceability remained uncertain.

It also held that the presumption under Section 14 CPC (which relates to the presumption regarding the competence of a foreign court delivering a judgment) places the burden on the party challenging a foreign judgment to prove that the foreign court lacked jurisdiction. The Bench observed:

"The presumption of jurisdiction established by Section 14 is not rebuttable merely by assertion of disagreement with the foreign court's reasoning or conclusions. In our view, the presumption under Section 14 is mandatory and places the burden squarely on the party challenging the foreign judgment to prove want of jurisdiction. Mere speculation that the New York court's findings might be incorrect or reliance on Section 13's exceptions does not displace this presumption."

Further, it held that Singh's own proceedings before the Bombay High Court seeking to restrain enforcement of the foreign judgments undermined his contention that their enforceability required substantive determination.

Accordingly, the High Court dismissed Singh's appeal and upheld the order directing disclosure of assets and restraining creation of third-party rights over them.

For Appellant: J. P. Sen, Senior Advocate a/w. Shyam Kapadia, Simiti Tewari, Nutash Kotwal, Riya Kamdar, Aditya Nair, Ojasi Nagar i/by Khaitan Legal Associates

For Respondent: Venkatesh Dhond a/w. Rohaan Cama, Anuj Berry, Shalaka Patil, Shilpa Singh Sengar, Kartikey Bhalotia, Jasleen Virk i/by Trilegal, Advocates