Bombay High Court upholds retrospective asset disclosure order against Rolta founder over alleged evasion of ₹1,800-crore foreign decree

The Appellant challenged an order directing him to disclose on oath details of his assets, bank accounts, bank statements, income-tax returns and alleged alienations from the commencement of the New York proceedings, and restraining him from dealing with or creating third-party rights in assets allegedly owned or controlled by him.

The Respondents held judgments of the New York State Supreme Court dated 11 May 2023 and 22 November 2024 against Rolta entities, involving principal claims of approximately USD 187 million and total claims of approximately USD 235 million including interest.

The New York proceedings included Turnover Orders requiring transfer of shares and remittance of cash, followed by contempt proceedings concerning alleged non-compliance and diversion of assets.

The New York Court found that the Appellant controlled Rolta entities, rerouted funds, failed to comply with the Turnover Order and transferred substantial assets after judgment.

The Appellant had also instituted proceedings before the Bombay High Court seeking to restrain enforcement of the New York judgment and Turnover Order.

1. Whether the disclosure and restraint directions were impermissibly vague or retrospective because they operated from the commencement of the New York proceedings rather than from the institution of the Indian suit.

2. Whether the Respondents could seek disclosure of assets under Order XXI Rule 41 CPC despite relying on foreign judgments that had not yet been adjudicated upon in an Indian enforcement action.

3. Whether the Single Judge’s exercise of discretion in granting the disclosure and restraint orders warranted appellate interference.

[object Object]

The Court applied Sections 13 and 14 CPC: a foreign judgment is conclusive on matters directly adjudicated between the parties, subject to the statutory exceptions under Section 13, while Section 14 creates a presumption that a certified foreign judgment was pronounced by a court of competent jurisdiction, which must be displaced by credible proof.

It relied on Order XXI Rule 41 CPC as permitting disclosure of assets where information is particularly within the judgment debtor’s knowledge and is necessary to facilitate enforcement, and held that disclosure is procedural and does not itself determine the attachability of any particular asset.

The Court also referred to Order XLVIII Rule 3 CPC concerning variation of prescribed forms according to the circumstances of a case.

[object Object]

The Court further relied on the doctrines of approbation and reprobation and estoppel, holding that a party that had itself instituted anti-enforcement proceedings could not later deny knowledge or enforceability of the foreign judgment.

Sections 2(59) and 2(60) of the Companies Act, 2013 were invoked to characterise the Appellant as an officer and officer in default in light of his control over and involvement in the affairs of the Rolta entities.

The Court held that the impugned order was not vague because the commencement of the New York proceedings was identifiable as 6 June 2018.

It rejected the Appellant’s argument that disclosure could begin only from the date of the Indian suit, distinguishing between substantive attachment—which may depend on whether an asset belonged to the debtor at a particular point—and procedural disclosure, which merely identifies assets and their location for possible enforcement.

The Court considered the New York judgments and the Appellant’s own anti-enforcement proceedings sufficient to reject his attempt to treat the foreign judgments as wholly uncertain; his conduct amounted to approbation and reprobation, and he was estopped from feigning ignorance of the judgments.

The statutory presumption under Section 14 CPC had not been displaced, since the Appellant produced no credible evidence demonstrating want of jurisdiction, fraud, denial of natural justice or any other Section 13 exception.

The Court also found the Appellant’s documented conduct—including control over Rolta entities, rerouting of funds, non-compliance with the Turnover Order and alleged transfer of approximately USD 187 million—sufficient to justify a protective disclosure order.

The authorities concerning pre-suit transfers, limits on execution disclosure and attachment before judgment were distinguished because the present directions were intended to locate assets and prevent evasion, not to conclusively attach property or convert an unsecured claim into a secured debt.

[object Object]

It held that the disclosure period commencing from 6 June 2018 was sufficiently certain, that the foreign judgments could be relied upon for the limited procedural purpose of obtaining asset disclosure, and that the Appellant’s conduct justified the protective directions.

The Court declined to interfere with the Single Judge’s discretionary order and dismissed the Appeal.

The connected Interim Application was disposed of as infructuous following dismissal of the Appeal.