For two years, Punjab National Bank (International) Ltd (PNBL) questioned Rahul Nanda, former owner and CMD of Topsgrup, in a London court seeking to refer the former millionaire to a High Court Judge for contempt. The bank identified 23 categories of non-compliance, following which, Master Kaye, sitting in the Business and Property Courts, finally referred him to a High Court Judge last week. The bank claims that Nanda has failed to cooperate and disclose information about his assets and income, which has come in the way of recovering the judgment debt of £15.72 million. A daily interest of £3,000 (Rs 30 lakh) continues to accrue on the debt.
The 23 categories of non-compliance cover a wide gamut of information consistent with the life of luxury that Nanda led in the past. The bank wants to ferret out information ranging from identifying all his personal bank accounts to family trusts, and from income tax returns to a complete list of companies in which he is a shareholder. In court appearances, Nanda looks a pale shadow of the former swashbuckling figure that he was.
To give Nanda some credit, Master Kaye did observe that the bank did not seem to make much progress in identifying any assets against which they could enforce. However, the staggering scale of non-compliance was such that Master Kaye characterised Nanda’s responses as patchy, unhelpful, inconsistent, opaque, obtuse, not straightforward. Nanda’s position is that PNBL has taken an unrealistic view of his and his family’s wealth.
Yet, Nanda failed, for example, to disclose that he was a director with his daughter in two companies, Trident Works Services Limited and Cheep App India. PNBL found out about his association with these two companies even as Nanda maintained that he was not involved in any joint businesses with his daughter and that he was not a director of any company other than Topsgrup or his UK-based entity Shield. Faced with direct questions in respect of four personal bank accounts – HSBC Bank Smart Loan Account, HDFC Bank, Barclays Bank Wealth USD Account, Barclays Bank Private Savings – he maintains that he has never personally used them and is not aware of their existence.
In the case of his primary UK bank account with Barclays, Nanda sought to escape by simply saying that the account was closed. However, Master Kaye agreed with Vivek Kapoor, the barrister representing PNBL, that no evidence of the account being closed was provided. It also emerged that Nanda’s earlier evidence of not keeping any credit cards or insurance was not correct. “Dr Nanda is an intelligent man; I find it difficult to accept that his answers and approach were not deliberately obtuse,” noted Master Kaye.
Other inconsistencies and failure to provide complete information pertain to his foreign travel, salaries received from Topsgrup and Shield, land and properties owned by him and his family members. “It seems to me that Dr Nanda should be asked to provide a comprehensive statement of what he now says the position is in relation to his sources of income and the amounts received between 2016 and 2022 and to identify where it was paid to with any supporting documents not already disclosed,” observed Master Kaye. For a part of the court proceedings, Nanda was represented by a barrister, but was unrepresented towards the end and was assisted by his daughter.
Dire situation
Nanda made submissions that he is being supported by his wife and daughter and has no income. All through the proceedings, there were plenty of references to the hard times he is now facing. He sold his personal watches, including a Rolex, for cash, although Kapoor maintained that there was no evidence of where the cash went, nor are there any records in the bank accounts disclosed by him. Nanda sold his Rolls Royce before 2016 to pay the taxman in the UK. In local auctions in England, he sold items which were once proudly displayed in his Manor House. In 2021, he was in receipt of state benefits from the UK and had applied for his own bankruptcy in July 2022.
The proceedings against Nanda in the UK stem from the non-payment of the over £10 million loan PNBL gave in 2013 to Shield Guarding Company Limited, his UK company, on his personal guarantee. The acquisition of Shield had propelled Nanda to the prestigious Sunday Times UK Rich List with a net worth of over £168 million in 2012. The company went into administration in 2016, and the loan remained unpaid. In July 2019, a UK court ordered Nanda to pay £13.25 million after which PNBL took steps to have Topsgrup India put into administration in February 2021 in pursuit of the judgment debt. Some assets belonging to Nanda in India have been sealed by the Enforcement Directorate (ED) which is probing charges of money laundering.
What happens next
As Nanda is a declared bankrupt and has regularly appeared in courts, the process of certifying non-compliance by a debtor is such that it should not be oppressive. In Nanda’s case, there were certain categories where Master Kaye did not agree that there was non-compliance. However, in the overall finding she concluded that the over 6,000 documents that Nanda collated could not substitute the fact that he had failed to substantially disclose key information.
Nanda will now appear before a High Court Judge in London where PNBL will seek appropriate punishment for Nanda based on his non-compliance. A judgment debtor is bound to share information sought by the creditor in the pursuit of judgment debt. Even though Master Kaye observed that the bank has not pointed out any substantial assets that could be enforced, the fact that Nanda has been economical with crucial documents and information give them reason to claim that he is in a position to pay the judgment debt.
The High Court Judge will accordingly direct Nanda to provide the information sought by PNBL setting a deadline or could even conclude that based on the proceedings so far, Nanda should not be given any further opportunity. In that eventuality, Nanda faces heavy fines, imprisonment, or confiscation of assets.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
