Today (7th March): Justice BV Nagarathna has recused herself from hearing a plea challenging Harsh Vardhan Lodha’s continuation as Chairman of the MP Birla Group. Lodha’s leadership has been under scrutiny amidst legal battles regarding the validity of Priyamvada Devi Birla’s will.
NEW DELHI: Today (7th March): Justice BV Nagarathna of the Supreme Court has stepped down from overseeing the case involving Harsh Vardhan Lodha’s leadership in the MP Birla Group. The scheduled hearing, which was to be presided over by Justice BV Nagarathna and Justice Augustine George Masih, encountered a setback due to her recusal.
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Senior Advocates, including Harish Salve, S Muralidhar, and Abhishek Manu Singhvi, expressed disappointment at this turn of events.
A significant decision occurred on December 14 when the Calcutta High Court granted Harsh Vardhan Lodha permission to retain his position as Chairman of the MP Birla group of companies. The court also imposed restrictions on the ‘administrators pendente lite’ (APL), preventing them from interfering with the group’s day-to-day operations.
This ruling prompted an immediate appeal to the apex court, which was filed through Khaitan & Co.
Background
The matter was initiated by multiple appeals filed by Lodha and four companies of the Birla Group, contesting a September 18, 2020, order from a single judge that restrained Lodha from serving as chairman.
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On September 2020 order arose when certain members of the ‘extended’ Birla family questioned the validity of Priyamvada Devi Birla’s will, the wife of MP Birla.
Priyamvada Devi Birla chaired the group until her passing on July 3, 2004. Her will (wasiyat), prepared in April 1994, allocated her nearly Rs 25,000 crore estate to her advisor and former chartered accountant, RS Lodha.
Following RS Lodha’s demise in 2008, his second son, Harsh Vardhan Lodha, assumed the chairmanship. However, on September, 2020, Calcutta High Court order restrained him from this role, though he continued as a director in some companies.
In December 2023, the High Court modified its September 2020 judgment, asserting that the APL could not take business decisions regarding entities beyond their direct control. The court emphasized that major decisions concerning share transactions or transfers required approval from the testamentary court.
The High Court clarified that Priyamvada’s influence was confined to her ownership of specific shares in various companies. It stressed that the APL should not do ‘controlling interest’ with Priyamvada’s personal influence.
The court also emphasized that the APL lacked adjudicating authority and should refrain from issuing drastic orders pressuring the group companies.
The core of the dispute, according to the High Court, revolves around the contested will, which necessitates a prompt resolution.
CASE TITLE: Arvind Kumar Newar v. Harsh Vardhan Lodha and ors
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