New Delhi, March 16 – The Supreme Court appointed former Chief Justice of India U U Lalit as the sole mediator to resolve the dispute over the execution of a Rs 500 crore money decree issued by the UAE court in favor of Ras Al Khaimah Investment Authority (RAKIA) and against Hyderabad-based industrialist Nimmagadda Prasad.
RAKIA is seeking to enforce a UAE civil judgment amounting to AED 267,941,374 (approximately Rs 543 crore in principal and Rs 643 crore in interest).
The case stems from the 'Vanpic Project', a failed 2008 joint venture to develop ports and an airport in Andhra Pradesh.
RAKIA alleges that Prasad, in collusion with former RAKIA CEO Khater Massaad, misappropriated USD 120 million intended for the project.
On Monday, a bench comprising Chief Justice Surya Kant and Justice Joymalya Bagchi was informed by senior advocate Gopal Subramanium, representing Prasad, that the industrialist had deposited Rs 125 crore as cash security as previously directed.
Subramanium also stated that the original title deeds for a 37-acre land parcel in Telangana had also been submitted to the court, and that the land is free from any encumbrances.
Subramanium said his client was willing to mediate to reach a settlement.
Senior advocates Abhishek Singhvi and Gopal Sankaranarayanan, representing the foreign firm, said they were agreeable to a time-bound mediation, with the condition that Prasad's assets remain in their current state and no third party be involved until the mediation concludes.
Taking note of this consent, the CJI appointed Justice Lalit as the sole mediator and requested him to expedite the mediation process.
The bench asked Justice Lalit to conduct a mediation exercise using a hybrid mode, allowing RAKIA representatives to appear via video conferencing, considering the security situation in the Gulf region.
Clarifying its earlier order, the CJI stated that the Hyderabad-based businessman could use the funds for the "day-to-day operations" of his companies, including paying salaries, and would not alienate immovable properties without prior court approval.
The bench said that Justice Lalit may consider hearing the parties involved in the case.
It stated that Justice Lalit will determine his professional fees and other related expenses in consultation with the parties involved.
Previously, the Supreme Court had directed Nimmagadda Prasad to deposit Rs 125 crore as security and submit the original title deeds of a 37-acre land parcel in Telangana in a case stemming from a failed 2008 joint venture to develop ports and an airport in Andhra Pradesh.
It had granted the industrialist time to propose an alternative arrangement for the remaining security.
The bench had asked Prasad to provide a security of Rs 600 crore to hear his plea against the UAE decree.
The court took note of the affidavit filed by Prasad in compliance with its February 12 order and analyzed the proposal to deposit the Rs 600 crore security.
"In an apparent attempt to honor the observations, which this court proposed to issue on the previous date regarding furnishing a security of 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 valued at approximately Rs 212 crore, currently attached by commercial courts under orders passed on September 5 and October 6, 2023.
Besides the additional cash security of Rs 125 crore, he also offered a 37-acre land parcel at Devarayamjal village in Medchal-Malkajgiri district, which is claimed to be worth Rs 408 crore.
"Regarding the first component of the security, namely, shares and other assets attached by the Commercial Courts, we are not inclined to accept them. Faced with this, Shri Gopal Subramanium, learned Senior Counsel, representing respondent no. 5, seeks more time to submit an alternative proposal. The request is accepted," the bench said.
Regarding the 37-acre property, known as Medchal Land, the bench said that the original title deeds should be deposited with the registrar of the top court with an affidavit confirming that the land is free from all encumbrances except that it was previously attached by the Directorate of Enforcement (ED) and released subject to furnishing of an indemnity bond.
"In this vein, respondent no. 5 shall be obligated to furnish an affidavit along with an undertaking to the effect that the requisite indemnity bond has been furnished, thereby complying with the release order passed by the Appellate Tribunal under the Prevention of Money Laundering Act," it said.
Regarding the additional cash security of Rs 125 crore, the bench took note of Subramanium's statement that the amount would 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 directed.
It said the interim arrangement regarding the security shall be without prejudice to the rights of the parties.