Vanpic Case: SC Bars Nimmagadda From Selling Assets
Senior advocate Gopal Subramanium, appearing for Prasad, told the court Prasad had deposited Rs.125 crore as cash security, as directed earlier by the court.
New Delhi: The Supreme Court on Monday barred Hyderabad-based industrialist Nimmagadda Prasad from alienating any immovable property without its prior permission until a dispute over the execution of a Rs.500-crore decree passed by a UAE court against him was settled.
The order was issued by the Supreme Court while hearing a petition filed by Ras Al Khaimah Investment Authority (RAKIA) — in whose favour the UAE court had ruled — seeking the enforcement of the judgment for AED 267,941,374 — approximately ₹543 crore as principal and ₹643 crore with interest.
The dispute arose between Prasad and RAKIA in the Vanpic Project, a failed joint venture in 2008 to develop ports and an airport in Andhra Pradesh. RAKIA has alleged that Prasad, in collusion with former RAKIA CEO Khater Massaad, misappropriated $120 million meant for the project.
While hearing the plea, a bench comprising Chief Justice Surya Kant and Justice Joymalya Bagchi has clarified its earlier order stating that the Hyderabad-based businessman could utilise funds for the day-to-day affairs of his companies, including payment of salaries, but would not alienate any immovable property without prior permission of the court.
Following a request from both parties, the court appointed former CJI U.U. Lalit as the sole mediator to help amicably resolve the dispute expeditiously. The court also directed that the mediation be conducted in hybrid mode, allowing RAKIA’s representatives to participate through video conferencing, considering the security situation in the Gulf region.
Senior advocate Gopal Subramanium, appearing for Prasad, told the court Prasad had deposited Rs.125 crore as cash security, as directed earlier by the court. He also offered a 37-acre land parcel at Devarayamjal village in Medchal-Malkajgiri district, claimed to be worth Rs.408 crore.
Subramanium also informed the bench that the original title deeds of the land parcel in Telangana had been submitted before the court and that the property was free from encumbrances. He said his client was willing to undergo mediation to arrive at an amicable settlement.
Senior advocates Abhishek Singhvi and Gopal Sankaranarayanan, appearing for RAKIA, said the foreign firm agreed to a time-bound mediation, provided the status quo regarding Prasad’s assets was maintained and no third-party rights were created during the mediation process.
In compliance with its February 12 order, Prasad filed an affidavit proposing security worth Rs.600 crore. The businessman offered shares and assets valued at Rs.212 crore, which are currently attached by commercial courts under orders issued on September 5 and October 6, 2023. The court, however, declined to accept the shares and attached assets as part of the security.
Regarding the Rs.125 crore cash security, the court had directed that once deposited, the registry should place the amount in UCO Bank of the Supreme Court in a high-interest fixed deposit for six months with auto-renewal.
Earlier, the Supreme Court had directed Prasad to deposit Rs.125 crore as cash security and submit the original title deeds of a 37-acre land parcel in Telangana in connection with the case arising from the failed Vanpic project.
The court had also asked Prasad to furnish security worth ₹600 crore for hearing his plea against the UAE decree and granted him time to propose an alternative arrangement for the remaining amount. The court clarified that the interim arrangement regarding security would be without prejudice to the rights of the parties.