Supreme Court Directs Nimmagadda Prasad To Furnish Additional ₹200 Cr. Security In RAKIA Decree Case

On Tuesday, 1 September, the Supreme Court directed Nimmagadda Prasad (associated with the respondent entities) and other respondents to furnish an additional Rs. 200 crore as security in proceedings for enforcement of a foreign decree obtained by the Ras Al Khaimah Investment Authority (RAKIA).

A Three-Judge Bench comprising Chief Justice Surya Kant with Justices Joymalya Bagchi and V. Mohana upheld the Telangana High Court's finding that a statement made by IQuest Enterprises before the Hyderabad Commercial Court did not constitute an unconditional undertaking and therefore could not form the basis for contempt proceedings. It observed:

“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.”

RAKIA had entrusted funds to Prasad for investment in the VANPIC Project, involving development of the Vadarevu Port, Nizampatnam Port, an industrial corridor and an airport in Andhra Pradesh. Alleging misappropriation, RAKIA initiated civil and criminal proceedings against Prasad in the United Arab Emirates.

The Ras Al Khaimah Court of First Instance, on 2 February 2022, directed Prasad to pay AED 267.94 million, approximately Rs. 543.92 crore, with 6% annual interest. The decree was subsequently upheld in cassation by the Superior Court.

RAKIA thereafter sought enforcement of the decree in India under Section 44A of the Code of Civil Procedure, 1908, which provides for execution in India of decrees passed by courts in reciprocating foreign territories. The Commercial Courts at Hyderabad and Ranga Reddy attached Prasad's assets worth approximately Rs. 212 crore.

During the execution proceedings, RAKIA sought to implead IQuest Enterprises and include its assets. It alleged that IQuest's statement in its counter-affidavit before the Hyderabad Commercial Court that it had decided not to proceed with the transaction involving Viatris amounted to an undertaking.

RAKIA later alleged that the transaction was routed through Matrix Pharmacorp, a related entity, which acquired Tianish Laboratories. The National Company Law Tribunal approved the Matrix Pharmacorp-Tianish Laboratories amalgamation in March 2025.

Thereafter, RAKIA initiated contempt proceedings before the Telangana High Court, alleging violation of the alleged undertaking. The High Court dismissed the proceedings, holding that IQuest's statement was clarificatory and did not constitute an undertaking.

Separately, the National Company Law Tribunal had imposed protective conditions while approving the amalgamation. The National Company Law Appellate Tribunal subsequently set aside those conditions. RAKIA challenged the orders before the Supreme Court.

The Bench noted that Prasad had been directed to furnish Rs. 600 crore as security. By 16 March 2026, he had deposited Rs. 225 crore in cash and title deeds relating to 37 acres of land in Telangana as security.

Prasad opposed RAKIA's appeal, arguing that he had already deposited Rs. 225 crore in cash and title deeds of the Medchal land valued at over Rs. 400 crore. He contended that the security furnished, along with other assets, was sufficient and that no further security was warranted.

The Bench agreed with the Telangana High Court that the statement of IQuest recorded in the Hyderabad Commercial Court's order dated 1 May 2024 could not be treated as an undertaking.

It, however, observed that prima facie, Prasad was attempting to camouflage and dissipate his assets to defeat execution of the decree. It held that RAKIA had made out a case for imposing further security on the respondents.

Accordingly, the Supreme Court directed the respondents to furnish a further Rs. 200 crore as security within two weeks. It left open whether Prasad's family-controlled entities form a unified structure whose assets can be proceeded against to satisfy the decree. It also left the question of lifting the corporate veil for determination by the Commercial Courts.

The Bench further directed the Commercial Courts at Hyderabad and Ranga Reddy to decide the execution petitions and pending applications within four months.

For Appellant: Senior Advocates Dr. Abhishek Manu Singhvi, Gopal Sankaranarayanan, Advocates Dr. Rishab Gupta, Mr. Rishabh Kapur, AOR, Siddharth Seem, Siddharth Venugopal, Tushar Srivastava

For Respondents: Senior Advocates Mukul Rohatgi, Niranjan Reddy, Abhishek Swaroop, Neeraj Kishan Kaul, Dama Seshadri Naidu, Balbir Singh, Advocates Shyam Divan, Indranil Deshmukh, Raunak Dhillon, Saloni Kapadia, Aishwarya Gupta, Jeezan Riyaz, Harshit, Shubh Sahai, Karan Gandhi, Anshula Lahoriya, S., Sanya Sud, AOR, Sana Jain, M/s. Cyril Amarchand Mangaldas, AOR, Sahil Raveen, AOR, Akhila Palem, Raghav Agrawal, Dhanya S. Krishnan, Dhruv Kohli, Balaji Srinivasan, AOR, Ajesh Kumar Shankar, Subornadeep Bhattacharjee, Amith L.M, Aanchal Tikmani, AOR, Naman Tondon, Nama Tondon, Mujadid Gilani, Ashutosh Ghade, AOR, Saloni Meshram, Preetika Dwivedi, AOR, Abhisek Mohanty, Ansh Rajauria