Supreme Court on Friday of India has accepted appeals against the Calcutta High Court’s decision that permitted Harsh Vardhan Lodha to maintain his role as the Chairman of the MP Birla group.
NEW DELHI: The Supreme Court on Friday of India has accepted appeals against the Calcutta High Court’s decision that permitted Harsh Vardhan Lodha to maintain his role as the Chairman of the MP Birla group. This ongoing legal battle, capturing significant attention, involves intricate details of legacy, corporate governance, and family disputes.
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The Supreme Court bench, led by Justice Abhay S Oka and Justice Ujjal Bhuyan, refrained from providing any temporary relief to the Birla family against the High Court’s verdict. The High Court had previously limited the powers of the ‘administrators pendente lite’ (APL) from meddling in the everyday workings of the conglomerate. The Supreme Court stated,
“We make it clear that, at this stage, we are not granting any interim relief. If any direction/relief is required to be applied for, the probate proceedings are pending before the Testamentary Court. The parties can apply in accordance with law.”
This legal wrangling finds its roots in the will of Priyamvada Devi Birla, who left a massive estate, reportedly worth nearly ₹25,000 crore, to RS Lodha, her advisor and former chartered accountant, via a will dated April 1994. Following her demise in 2004, RS Lodha took over as Chairman, a position later assumed by his second son, Harsh Vardhan Lodha, after his father’s death in 2008. The veracity of the will and subsequent leadership changes have sparked controversy and legal challenges within the extended Birla family.
The core of the dispute revolves around the Calcutta High Court’s September 2020 verdict, which was contested by Harsh Vardhan Lodha and four companies from the Birla Group. The 2020 order restricted Lodha from his chairman role following challenges by certain Birla family members regarding the legitimacy of Priyamvada Devi Birla’s will.
The legal battle escalated when, in December 2023, the High Court amended this judgment. It established that the APL’s oversight does not extend to preemptive business decisions for entities outside of their direct jurisdiction. Nonetheless, it was clarified that any significant decisions, particularly those affecting share transactions or transfers, would necessitate approval from the testamentary court.
Furthermore, the High Court delineated between ‘controlling interest’ and ‘personal influence,’ underscoring that the administrators should not overstep their bounds by assuming authority beyond their assigned role. This distinction aims to preserve the operational integrity of the MP Birla group while ensuring legal proceedings concerning the will and estate continue without undue interference.
In light of these developments, the Supreme Court’s decision to take up the appeals signifies a crucial juncture in this high-profile case. With no interim relief granted, the matter is poised for a detailed hearing expected on April 15, maintaining a status quo that leaves room for further legal arguments and decisions.
Representatives from both sides, including Senior Advocates Kapil Sibal, Dr. Abhishek Manu Singhvi, Mukul Rohatgi, Darius Khambata, and Puneet Bali, underscore the case’s prominence, combining elements of corporate law, family legacies, and legal principles.
As the Indian judiciary delves into this complex dispute, the business community and legal observers alike await the outcome, which will likely have far-reaching implications for corporate governance and family-run businesses in India.
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