![No Contempt on Clarificatory Statement, but Rs. 200 Crore More Security Ordered to Protect UAE Decree Against Asset Dissipation: Supreme Court in Ras Al Khaimah Investment Authority v. Matrix Pharmacorp [2026 INSC 932]](/assets/images/article-corporate.svg)
Quick Answer: The Supreme Court upheld the Telangana High Court's finding that a statement IQuest made in a counter affidavit before the Hyderabad Commercial Court was only clarificatory and not an undertaking, so no contempt arose. But it found prima facie that the judgment debtor, Nimmagadda Prasad, was trying to camouflage and dissipate assets to defeat a UAE money decree of about Rs. 950 crore. It directed the judgment debtor and the respondent entities to deposit an additional Rs. 200 crore as security. It held that the NCLT's protective conditions on the Matrix–Tianish merger should not have been removed by the NCLAT, and directed the executing courts to decide the execution within four months.
In Ras Al Khaimah Investment Authority v. Matrix Pharmacorp Pvt. Ltd. & Anr. (2026 INSC 932), the Supreme Court held that IQuest's statement before the Commercial Court, Hyderabad, recorded in the order dated 01.05.2024, was a clarificatory statement and not an undertaking whose breach could amount to contempt, and upheld the High Court's dismissal of the contempt case (paras 56–60, 75(i)). At the same time, a Bench of Chief Justice Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana held that the UAE decree is prima facie executable under Section 44A CPC, that the judgment debtor appeared to be dissipating assets, and that the NCLT's protection ought not to have been disturbed by the NCLAT. It directed an additional security of Rs. 200 crore and left the question of piercing the corporate veil to the executing courts (paras 62–75).
Status: High Court's finding of no contempt upheld; NCLAT's order expunging the NCLT's protective directions disapproved; additional security of Rs. 200 crore directed; executing courts to decide within four months; all appeals disposed of (paras 69, 73, 75).
Headnote: Enforcement of Foreign Decree, Undertaking and Asset Dissipation
Code of Civil Procedure, 1908 – Sections 13, 44A, 47 and 60 – Execution of decree of a superior court of a reciprocating territory (UAE) – Comity of nations – Contempt of Courts Act, 1971 – Sections 2(b) and 19 – Statement in counter affidavit whether an undertaking – Companies Act, 2013 – Section 230 – Scheme of amalgamation – Protective conditions imposed by NCLT – Alter ego and lifting of corporate veil – Dissipation of assets – Security.
Held: (i) Whether a statement amounts to an undertaking depends on the words used and the circumstances; the Court will not assume an implied undertaking. IQuest's statement that it had decided not to go ahead with the acquisition was clarificatory, not an undertaking, and the High Court rightly found no contempt (paras 57–60).
(ii) As there was no undertaking by IQuest, there could be no contempt against Matrix, Viatris or Moschip, none of whom had been impleaded before the Commercial Court (para 60).
(iii) The RAK Foreign Decree is a decree of a superior court of a reciprocating territory and prima facie executable in India; comity of nations requires due weight to be given to it even at the interlocutory stage (para 62).
(iv) Prima facie, the judgment debtor is attempting to camouflage and dissipate his assets to defeat execution; vacating the status quo without security would amount to obstruction of justice (paras 63, 66–67, 71).
(v) Given the transactions during the pendency of execution, the NCLT's protective conditions on the merger ought not to have been disturbed by the NCLAT (paras 68–69).
(vi) Whether the family-controlled entities form a unified structure whose assets can be reached, and whether the corporate veil should be lifted, is left to the executing courts, which are not bound by the observations made (paras 64, 74, 75).
(paras 56–75)
Case Details: Ras Al Khaimah Investment Authority v. Matrix Pharmacorp (2026 INSC 932)
Final Outcome: Appeals disposed of; High Court's finding of no contempt upheld; NCLT's protective directions held to have been wrongly expunged by NCLAT; additional security of Rs. 200 crore directed; executing courts to decide within four months.
Case: Ras Al Khaimah Investment Authority v. Matrix Pharmacorp Private Limited & Anr.
Neutral Citation: 2026 INSC 932
Case No.: Civil Appeal Nos. 12993–12994 of 2025, with Civil Appeal Nos. 12561–12566 of 2025, Civil Appeal Nos. ___ of 2026 (arising out of SLP (C) Nos. 27277–27279 of 2025) and Civil Appeal No. ___ of 2026 (arising out of SLP (C) No. 35892 of 2025)
Court: Supreme Court of India (Civil Appellate Jurisdiction) – Reportable
Date of Decision: 1 September 2026
Bench: Chief Justice Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana (author)
Relevant Acts & Sections: Code of Civil Procedure, 1908 – Sections 13, 44A, 47 and 60; Contempt of Courts Act, 1971 – Sections 2(b) and 19; Companies Act, 2013 – Section 230
Impugned Orders: Telangana High Court – Division Bench orders dated 12.06.2025 and 27.06.2025 staying the impleadment order and contempt proceedings, and order dated 07.11.2025 dismissing Contempt Case No. 1378 of 2024; NCLAT orders dated 06.08.2025 (dismissing the appellant's appeals against the merger) and 24.04.2025 (allowing the respondents' cross appeal and expunging the NCLT's protective directions) (paras 2, 17–18, 22–23)
Counsel: Dr. Abhishek Manu Singhvi and Mr. Gopal Sankaranarayanan, Senior Advocates, for the appellant; Mr. C.A. Sundram, Mr. Mukul Rohatgi, Mr. D.S. Naidu, Mr. Balbir Singh and Mr. Neeraj Kaul, Senior Advocates, for NP, his family members and IQuest; Mr. Shyam Divan, Senior Advocate, for Matrix and Tianish; Mr. S. Niranjan Reddy, Senior Advocate, for Viatris; Mr. Balaji Srinivasan for Moschip (paras 29, 35, 44, 50, 52)
Source: Supreme Court of India (official website)
Key Holdings of the Supreme Court
- IQuest's statement in its counter affidavit, recorded on 01.05.2024, was a clarificatory statement and not an undertaking; the High Court's finding of no contempt was upheld (paras 59, 75(i)).
- Without an undertaking by IQuest, no contempt could arise against Matrix, Viatris or Moschip (para 60).
- The UAE decree is prima facie executable in India under Section 44A CPC, and comity requires due weight to it even at the interlocutory stage (para 62).
- The judgment debtor prima facie appeared to be camouflaging and dissipating assets; the status quo could not be vacated without appropriate security (paras 63, 71).
- The NCLT's protective conditions on the Matrix–Tianish merger ought not to have been disturbed by the NCLAT (para 69).
- NP and the respondent entities were directed, jointly and severally, to deposit an additional Rs. 200 crore as security within two weeks (paras 73, 75(ii)).
- The alter ego and corporate veil questions are left to the executing courts, which must decide the execution within four months (paras 74, 75(iv), 75(vii)).
Brief Facts of the Case
Ras Al Khaimah Investment Authority (RAKIA), a public entity of Ras Al Khaimah, entrusted funds to Nimmagadda Prasad (NP) for investment in the VANPIC port and industrial corridor project in Andhra Pradesh. Alleging misappropriation, RAKIA sued in the UAE. On 02.02.2022, the Ras Al Khaimah Court of First Instance directed NP to pay AED 267,941,374 (Rs. 543.92 crore) with 6% interest, and the Court of Cassation upheld the decree on 27.12.2022 (paras 4–6).
RAKIA filed execution petitions under Section 44A CPC before the Commercial Courts at Hyderabad and Ranga Reddy, which attached NP's assets worth about Rs. 212 crore. It also sought to add IQuest, and later Matrix and Tianish, as parties and to attach their assets; those applications are pending (paras 7–14).
On 01.05.2024, the Hyderabad Commercial Court closed RAKIA's injunction application against IQuest after IQuest stated that it had decided not to go ahead with the acquisition of Viatris. Matrix then acquired Tianish, and their merger was sanctioned by the NCLT on 10.03.2025 with conditions that the merged company would not alienate or charge assets without informing or obtaining the approval of the High Court. The NCLAT later expunged those conditions and dismissed RAKIA's appeals (paras 11–12, 19–23).
RAKIA's contempt case alleging breach of IQuest's "undertaking" was dismissed by the Telangana High Court on 07.11.2025. During the Supreme Court proceedings, a status quo was ordered on 15.10.2025, NP deposited Rs. 225 crore in cash and title deeds of land in Medchal, mediation failed, and the decree's value with interest reached about Rs. 949.96 crore by 23.07.2026 (paras 18, 24–27, 34, 70, 72).
Issues Before the Supreme Court
- Whether IQuest's statement before the Commercial Court was an undertaking whose breach amounted to contempt (paras 56–60).
- Whether the NCLAT was right to expunge the NCLT's protective conditions on the Matrix–Tianish merger (paras 68–69).
- Whether further security should be imposed on the judgment debtor and the respondent entities pending execution of the foreign decree (paras 62–73).
Court's Findings and Reasoning
Statement was not an undertaking (paras 56–59): Relying on Babu Ram Gupta v. Sudhir Bhasin and Patanjali Ayurved Ltd., In re, the Court held that whether a statement is an undertaking depends on its words and the circumstances, and that an implied undertaking cannot be assumed. IQuest had only said that, at that time, it had decided not to go ahead with the acquisition. That did not convey a firm undertaking, so the High Court was right.
No contempt by other entities (paras 60–61): Since IQuest gave no undertaking, Matrix, Viatris and Moschip, which had not been impleaded before the Commercial Court, could not be in contempt. IQuest's role was only a "back-stop" for the termination fee. The Court nonetheless noted that the circuitous transactions reflected on the conduct of the respondent entities and NP.
Foreign decree and comity (paras 62, 65): The UAE decree is that of a superior court of a reciprocating territory and is prima facie executable in India. NP's objections under Sections 13 and 47 CPC had been dismissed by the Commercial Courts, and there was no stay of execution. Without conditions, the decree could become incapable of execution, undermining reciprocal enforcement.
Prima facie dissipation of assets (paras 63, 66–67): The Court found that NP and his immediate family had pervasive control over several entities, including the respondent entities, and that the timing of changes in control, transactions and formation of new companies raised a genuine apprehension that RAKIA would be left with a paper decree. The Viatris acquisition, though disclaimed by IQuest, was carried out through Matrix with IQuest as a back-stop.
NCLT protection restored in principle (paras 68–69): In view of the transactions during the pendency of execution, the protective conditions imposed by the NCLT on 10.03.2025 ought not to have been disturbed by the NCLAT.
Security (paras 71–73): Against a decree of about Rs. 949.96 crore, NP had furnished security of Rs. 231.70 crore and deposited title deeds of the Medchal land, whose value was disputed. Taking a rough figure of Rs. 250 crore for the land, subject to valuation by the executing court, the Court directed an additional Rs. 200 crore as security, its encashment being subject to the outcome of execution.
Final Outcome and Directions
- The High Court's finding that IQuest's statement did not invite contempt action was upheld (para 75(i)).
- NP and the respondent entities, jointly and severally, must deposit an additional security of Rs. 200 crore with the Supreme Court Registry within two weeks, over and above the sums and assets already deposited (paras 73, 75(ii)).
- The deposits will abide by the outcome of the execution proceedings at Hyderabad and Ranga Reddy (para 75(iii)).
- Whether NP's family-controlled entities are a unified structure whose assets can be reached is left open for the executing courts, which are not bound by observations in this judgment or the impugned orders (paras 74, 75(iv)–(v)).
- The appeals against the NCLAT orders are disposed of in these terms (para 75(vi)).
- The Commercial Courts at Hyderabad and Ranga Reddy must decide the execution petitions and all applications within four months (para 75(vii)).
Legal Principle Laid Down
A statement before a court amounts to an undertaking enforceable in contempt only if, read in context, it conveys a firm and clear commitment; courts will not imply an undertaking. Even where contempt fails, a court dealing with interlocutory matters connected with the execution of a foreign decree from a reciprocating territory must give due weight to that decree on the principle of comity, and may impose conditions such as additional security where the judgment debtor appears to be dissipating assets, leaving questions of alter ego and lifting the corporate veil to the executing court.
Precedents Relied Upon
- Babu Ram Gupta v. Sudhir Bhasin, (1980) 3 SCC 47 – Relied upon – an undertaking must be carefully construed and cannot be implied; contempt power is to be exercised with care. Discussed at paras 57, 59.
- Patanjali Ayurved Ltd., In re v. Union of India, (2024) 19 SCC 193 – Relied upon – whether a statement is an undertaking depends on its words and the circumstances. Discussed at paras 58–59.
- Bhatnagars & Co. Ltd. v. Union of India, AIR 1957 SC 478 – Referred to, as quoted in Babu Ram Gupta. Discussed at para 57.
Important Paragraphs of the Judgment
Verbatim extracts from the judgment. For the full text, refer to the judgment PDF below.
Para 59: "It is merely a clarificatory statement. All that is said by the IQuest was that at that point in time it had decided not to go ahead with the acquisition of Viatris."
Para 62: "There is no dispute that the RAK Foreign Decree is a decree of a superior court of a reciprocating territory and thus prima facie executable in India. 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."
Para 63: "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."
Para 64: "This Court is conscious of the fact that rendering any final opinion in respect of merits of the Execution Petition or about the status of corporates or lifting of the corporate veil at this juncture will affect any decision that may be taken in the pending proceedings."
Para 69: "... we find that the interim protection granted by the NCLT on 10.03.2025 ought not to have been disturbed by the NCLAT."
Para 73: "The Respondents are directed to furnish an additional Security of Rs. 200 crores with the Registry of this Court, over and above the sums/assets already deposited within two weeks."
Practical Impact of the Ruling
- For foreign decree holders: Decrees from reciprocating territories receive due weight on the principle of comity even at the interlocutory stage, and courts may secure them against dissipation of assets (paras 62–63, 71).
- For judgment debtors and group companies: Restructuring, mergers and new companies during execution can lead to orders for substantial security, even where contempt is not made out (paras 63, 66–67, 73).
- For litigants relying on statements in court: A statement in a counter affidavit will be treated as an undertaking only if it clearly conveys a firm commitment (paras 57–59).
- For NCLT and NCLAT: Protective conditions on a scheme of amalgamation that safeguard a decree holder should not be lightly removed while execution is pending (paras 68–69).
- For executing courts: Questions of alter ego and lifting the corporate veil are for them to decide on evidence, and execution of such decrees must be expedited (paras 74–75).
FAQs on Foreign Decree Execution and Asset Dissipation
1. What did the Supreme Court decide in Ras Al Khaimah Investment Authority v. Matrix Pharmacorp?
It upheld the finding of no contempt, but directed the judgment debtor and respondent entities to furnish an additional Rs. 200 crore as security and directed the executing courts to decide within four months (paras 73, 75).
2. Why was IQuest's statement not treated as an undertaking?
Because it only said that IQuest had, at that time, decided not to go ahead with the acquisition; it did not convey a firm undertaking, and an undertaking cannot be implied (paras 57–59).
3. Is a UAE money decree executable in India?
The Court held that the RAK decree is that of a superior court of a reciprocating territory and is prima facie executable in India under Section 44A CPC (paras 7, 62).
4. What did the Court say about the NCLT's conditions on the Matrix–Tianish merger?
It held that the NCLT's interim protection, requiring the High Court's approval or information before alienating or charging assets, ought not to have been disturbed by the NCLAT (paras 20, 68–69).
5. Did the Court lift the corporate veil?
No. It left the questions of alter ego, unified structure and lifting the corporate veil to the Commercial Courts in the pending execution proceedings (paras 64, 74).
Keywords: 2026 INSC 932, Ras Al Khaimah Investment Authority v. Matrix Pharmacorp, RAKIA, Nimmagadda Prasad, foreign decree execution, Section 44A CPC, reciprocating territory, comity of nations, undertaking contempt, Babu Ram Gupta, Patanjali Ayurved, dissipation of assets, lifting corporate veil, NCLT merger conditions, Section 230 Companies Act, additional security, Justice V. Mohana, Supreme Court reportable judgment
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Download Judgment PDF – Ras Al Khaimah Investment Authority v. Matrix Pharmacorp
Source: Supreme Court of India (official website).