Punjab National Bank (International) Limited v Dr Rahul Nanda

The debtor-questioning procedure under CPR Part 71 is intended to obtain information to assist enforcement, not to provide a shortcut to contempt proceedings. A judgment creditor must formulate requests sufficiently clearly and narrowly to permit compliance or non-compliance to be identified. The certifying court identifies the respects in which the debtor has failed to comply and must refer the matter to a High Court judge. It does not determine contempt or impose a sanction. In complex cases involving disputed non-disclosure, broad requests, or substantial factual disputes, the certification procedure may be unsuitable and CPR Part 81 may be more appropriate. Any later contempt order must serve the purpose of securing compliance with the order.

The claimant, a judgment creditor, held a judgment against the defendant for more than £13 million. It obtained a debtor questioning order requiring the defendant to answer questions on oath and produce documents concerning his assets and financial affairs. The claimant applied under CPR 71.8(1)(c) for certification of 23 categories of alleged non-compliance and referral to a High Court judge.

The defendant disputed non-compliance, relying on extensive later disclosure and asserting that much information was held by former colleagues, companies, or administrators. The central issues were the scope of the certifying court’s function, the suitability of CPR Part 71 for the disputed and complex allegations, and whether the defendant had failed to comply.

1. Certification and referral. The defendant had failed, at least to some extent, to comply with the debtor questioning order across the categories relied upon. The court certified the non-compliance and made the mandatory referral to a High Court judge.
2. Limited function of the certifying court. Under CPR 71.8(1)(c) and Practice Direction 71 paragraph 6, the certifying court must identify the respects in which the debtor failed to comply. It does not decide whether the conduct amounts to contempt or determine the appropriate sanction.
3. Later contempt stage. The High Court judge must decide whether certified non-compliance is proved to the criminal standard. The judgment emphasised that the judge retains a wide discretion, including directing further compliance, making a suspended committal order, or declining to make a committal order.
4. Suitability of the procedure. CPR Part 71 is a summary process designed to obtain focused information relevant to enforcement. It may be unsuitable where the allegations concern numerous disputed categories of non-disclosure, alleged lies, or broad and amorphous requests requiring value judgments about the extent of compliance. In such circumstances CPR Part 81 may be more appropriate, or the requests should be narrowed.
5. Purpose and proportionality. The process must not be used merely to trip up a debtor or create an opportunity for contempt proceedings. The information sought must aid enforcement and be reasonably capable of being provided, even where compliance is onerous. Any contempt order must be directed towards securing compliance, not punishment as an end in itself.
6. The court declined to treat the defendant’s bankruptcy as preventing continuation of the debtor-questioning process, because the process assists enforcement but is not itself a method of enforcement.