The Calcutta High Court (HC) on Friday restrained Harsh Vardhan Lodha from holding any workplace in M P Birla group entities, marking an important victory for the Birlas within the 16-year-old battle over Priyamvada Birla’s will.
The order mentioned, Harsh Vardhan Lodha is restrained from holding any workplace in any of the entities of M P Birla Group throughout pendency of the swimsuit (testamentary). The courtroom additionally directed implementation of the choice of the committee of directors.
These instructions imply that Harsh Vardhan Lodha instantly ceases to carry all positions within the M P Birla group, together with as director within the corporations and different positions within the trusts and societies of the M P Birla group, an announcement from the Birlas learn.
Lodha is the chairman of M P Birla group companies. The courtroom has additionally restrained Lodha from interfering with any determination of the APL Committee (committee of directors Pendente Lite of the property of Priyamvada Birla), which is taken by majority, the Birla assertion added.
Nonetheless, the courtroom has held that for the reason that companies weren’t events to the testamentary proceedings, instructions can’t be handed towards them however choices of the APL Committee shall be applied by Lodhas, who’re plaintiffs within the testamentary proceedings.
Debanjan Mandal, companion, Fox & Mandal, advocate for Lodha, mentioned, “The decision by Justice Sahidullah Munshi over reappointment of Harsh Vardhan Lodha as director of Vindhya Telelinks, Birla Cable and Birla Corporation doesn’t look like lawful. Our consumer’s confidence within the system stays utterly unshaken and our consumer will problem the judgment for instant and long-term reduction.”
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Lodhas will transfer the appeals courtroom. “Lodha’s reappointment as director within the two mentioned companies (Vindhya Telelinks and Birla Cable) was reviewed by two greater courts, together with the Supreme Court docket, and the preliminary order restraining the businesses from publishing the outcomes of polls taken at their AGMs final 12 months was put aside. The orders handed on Friday weren’t even requested for and might be challenged on this floor,” mentioned the advocate for Lodha.
As well as, the jurisdiction of the probate courtroom and the impermissibility of such orders affecting shareholders’ determination of reappointment of a director/chairman might be raised earlier than the enchantment courtroom, the Lodha facet mentioned. The courtroom handed instructions towards Lodha when it comes to Part 247 of the Indian Succession Act.
In a separate assertion, a spokesperson for Birla Company, mentioned, the corporate will look at the judgement and take mandatory steps together with submitting of enchantment as a result of the decision appears to have ignored shareholders’ democracy and their proper to elect by majority of their votes an individual as a director of an organization.
“Shareholders elected Harsh Varshan Lodha as a director of Birla Corporation with an awesome majority of 98 per cent. Mr Lodha being in any other case not disqualified from holding the workplace of director, there isn’t any motive why the decision of shareholders won’t be revered,” the spokesperson added.
The APL Committee — which had been appointed by the excessive courtroom in 2012 to manage and handle the property of Priyamvada Birla — has been in focus for the previous one 12 months for opposing Lodha’s reappointment in M P Birla group firms.
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In July 2019, it had directed elimination of Lodha by a majority determination from the boards of Vindhya Telelinks and Birla Cables. It had additionally refused to assist the decision for the fee of profit-based remuneration to Lodha.
In the identical vein, it refused to assist resolutions for reappointment of Lodha and profit-based remuneration in Birla Corporation and Common Cables this 12 months.
The resolutions in all these corporations, nevertheless, had been handed by greater than 97 per cent votes of shareholders.
For implementation of the APL Committee choices Birlas had filed an software earlier than the excessive courtroom final 12 months, that set off a contemporary spherical of authorized battle shifting all the best way as much as the Supreme Court docket. The apex courtroom mentioned the choice taken by the businesses could be topic to the ultimate final result of the excessive courtroom determination.
The Birla assertion on Friday mentioned, “His stranglehold on the M P Birla group has been delivered to an finish by the Calcutta High Court.”
