The Calcutta High Court (HC) on Friday barred Harsh Vardhan Lodha from holding any position in the entities of the MP Birla group, marking a crucial victory for the Birlas in the 16-year battle over the will of Priyamvada Birla.
The order stated, Harsh Vardhan Lodha cannot hold any position in any of the MP Birla Group entities during the processing of the (probate) claim. The court also ordered implementation of the trustees’ decision.
These instructions mean that Harsh Vardhan Lodha will immediately leave all positions in the MP Birla group, including that of director in the firms and other positions in the trusts and companies of the MP Birla group, a statement from Birla said.
Lodha is the president of the MP Birla group companies. The court has also prevented Lodha from interfering with any decision of the APL Committee (committee of administrators Pendente Lite of the property of Priyamvada Birla), which is taken by majority, added the Birla statement.
However, the court has held that since the companies were not parties to the probate procedure, no instructions can be issued against them, but the APL Committee’s decisions will be implemented by Lodhas, who are the plaintiffs in the probate procedure.
Debanjan Mandal, partner at Fox & Mandal, defender of Lodha, said: “Judge Sahidullah Munshi’s verdict on the re-election of Harsh Vardhan Lodha as director of Vindhya Telelinks, Birla Cable and Birla Corporation does not appear to be legal. Our client’s trust in the system remains completely unshakeable and our client will defy judgment for immediate and long-term relief. “
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Lodhas will move the appeals court. “Lodha’s re-election as a director in the two companies mentioned (Vindhya Telelinks and Birla Cable) was reviewed by two higher courts, including the Supreme Court, and the initial order was established that prevented companies from publishing the results of surveys conducted in their general meetings last year. apart. The orders approved on Friday were not even requested and will be contested for this reason, ”said the defender from Lodha.
Additionally, the jurisdiction of the probate court and the inadmissibility of such orders affecting the shareholders’ decision to re-elect a director / chairman will be raised before the appeals court, Lodha’s side said. The court approved instructions against Lodha in terms of Section 247 of the Indian Succession Act.
In a separate statement, a Birla Corporation spokesman said the company will examine the ruling and take necessary action, including filing an appeal because the verdict appears to have ignored shareholder democracy and their right to vote by majority of their shareholders. votes to a person as a director of a company.
“The shareholders elected Harsh Varshan Lodha as a director of Birla Corporation with an overwhelming majority of 98%. As Mr. Lodha was not disqualified from the position of director, there is no reason why the verdict of the directors is not respected. shareholders, “the spokesperson added.
The APL Committee, which had been appointed by the high court in 2012 to administer and manage Priyamvada Birla’s estate, has been in the spotlight for the past year for opposing Lodha’s reelection in the MP Birla group companies.
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In July 2019, it had ordered the removal of Lodha by majority decision from the boards of Vindhya Telelinks and Birla Cables. He had also refused to support the resolution to pay a profit-based remuneration to Lodha.
Along the same lines, he refused to support Lodha’s re-election resolutions and earnings-based compensation at Birla Corporation and Universal Cables this year.
However, the resolutions of all these companies were approved by more than 97 percent of the shareholders’ votes.
For the implementation of the APL Committee’s decisions, Birlas had filed an application with the superior court last year, which triggered a new round of legal battle that reached the Supreme Court. The higher court said that the decision made by the companies would be subject to the final outcome of the higher court’s decision.
Birla’s statement on Friday read: “The Calcutta High Court has ended its rule over the Birla group of MPs.”
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