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2020 Supreme(Cal) 576

IN THE HIGH COURT OF CALCUTTA
Sahidullah Munshi, J.
Priyamvada Devi Birla (dec) - Appellant
Versus
Ajay Kumar Newar & Ors. - Respondent
General Application No. 43 of 2016, 46 of 2019, 44 of 2019, 45 of 2019, 66 of 2020, 67 of 2020, 68 of 2020, 69 of 2020, 70 of 2020, 71 of 2020, 72 of 2020, 73 of 2020, 74 of 2020; C C No. 18 of 2020, 19 of 2020, 20 of 2020; T S No. 6 of 2004
Decided On : 18-09-2020

Advocates Appeared:
Anindya Kumar Mitra, Advocate, Jayanta Kumar Mitra, Advocate, P.S. Sengupta, Advocate, Abhrajit Mitra, Advocate, Debanjan Mondal, Advocate, Sanjiv Kumar Trivedi, Advocate, Kunal Vajani, Advocate, Jisnu Chowdhury, Advocate, Soumya Roy Chowdhury, Advocate, Sarborpiya Mukherjee, Advocate, Saunak Mitra, Advocate, Iram Hassan, Advocate, Kunal Mimani, Advocate, Deepan Kumar Sarkar, Advocate, Sanket Sarawgi, Advocate, Savya Bawaja, Advocate, Shubhang Tandon, Advocate, Atashi Ghosh, Advocate, S.K. Kapoor, Advocate, Vineeta Meharia, Advocate, Anuj Shigh, Advocate, Pratik Mukhopadhyay, Advocate, Vaibhabi Pandey, Advocate, K.V. Viswanathan, Advocate, Ratnanko Banerjee, Advocate, Swarnendu Ghosh, Advocate, Venkatraman R, Advocate, Hirak Kumar Mitra, Advocate, Suchismita Ghosh Chatterjee, Advocate, Malay Seal, Advocate, Debdutta Sen, Advocate, Kapil Sibal, Advocate, Surajit Nath Mitra, Advocate, Mahesh Agarwal, Advocate, D.N. Sharma, Advocate, Koushik Chowdhury, Advocate, Vanita Bhargav, Advocate, Ajay Bhargava, Advocate, Aspi Chinoy, Advocate, Deepak Joshi, Advocate, Akashh Lamba, Advocate, S. Baweja, Advocate, S. Pundora, Advocate, Sakya Sen, Advocate, Paritosh Sinha, Advocate, Saubhik Chowdhury, Advocate, Dripto Majumdar, Advocate, Kalyan Kumar Bandopahdyay, Advocate, Vineet Naik, Advocate, Ranjan Bachawat, Advocate, Amitesh Banerjee, Advocate, Soubhik Chowdhury, Advocate, Anubhav Sinha, Advocate, Sayan Roychowdhury, Advocate, Satyaki Mukherjee, Advocate, Joy Saha, Advocate, Yash Vardhan Deora, Advocate, Asmita Roychaughuri, Advocate, Kishore Dutta, Advocate, Sumita Shaw, Advocate

The Probate Court has jurisdiction to preserve an estate through the APL, which can act by majority, ensuring interim protection for beneficiaries pending resolution of disputes.

Headnote:(A) Succession Act, 1925 - Section 247 - The court addressed various applications relating to the implementation of decisions made by the Administrator Pendente Lite (APL) committee concerning the estate of the late Priyamvada Devi Birla. The APL, consisting of three members, must act unanimously unless otherwise decided. The decisions taken by majority regarding the estate management and voting rights were upheld as binding. The court reaffirmed that it has jurisdiction to issue necessary orders to preserve the estate during pending probate proceedings. (Para 211)

(B) Court’s Jurisdiction - The Probate Court cannot pass orders against entities that are not parties to the proceedings. The concept of controlling interest and the authority granted to APL to exercise voting rights on behalf of the estate was established, clarifying the scope and limits of the probate jurisdiction over company matters. (Paras 147, 200)

Facts of the case:
The matter stems from the death of an influential figure, leading to disputes over her estate and control of several companies. Disputes among the parties led to the appointment of the APL committee to manage the estate's interests. (Paras 1-5)

Findings of Court:
The APL's decisions are valid and must be implemented to protect the estate until the probate issues are resolved. The court established the need for interim measures to safeguard the estate for the beneficiaries while adjudicating other disputes. (Paras 211, 212)

Issues: The primary issues involved the authority of the APL to manage voting rights and the jurisdiction of the Probate Court regarding entities not party to the case while addressing internal company governance disputes. (Paras 1, 186)

Ratio Decidendi: The court ruled that the powers of the APL, as delegated by the Probate Court, encompassed management and decision-making authority necessary to preserve the estate effectively. The court decided that majority decisions could be binding unless specifically contravened by statutory requirements for unanimity. (Paras 191-200)

Result: Applications were disposed of, with specific orders to implement the decisions of the APL. Plaintiffs were restrained from taking certain actions that could interfere with the estate's management until the final resolution of the probate issues.

JUDGMENT

Sahidullah Munshi, J. - The Court: Plaintiffs and defendants altogether filed four applications. G.A. No. 1735 of 2019 and GA No. 1845 of 2019 have been filed by the defendants whereas the other two applications being G.A. No. 1761 of 2019, G.A. No. 1786 of 2019 have been filed by the plaintiffs.

2. G.A 1735 of 2019 has been taken out by the defendants in the form of an affidavit in support of master summons affirmed on 30.07.2019 by one Arvind Kumar Newar defendant No. 1(b)/applicant with the following prayers:

"(a) A direction do issue upon the plaintiffs to implement the decision dated 19th July, 2019 of the Committee.

(b) A direction do issue upon the Committee to exercise its voting rights flowing from the shareholding in various companies, trust and societies of MP Birla Group forming part of the controlling interest and controlling power vested in the Estate of Priyamvada Devi Birla by casting its votes at the ensuing Annual General Meeting of Vindhya Telelinks Limited on 5th August, 2019; Universal Cables Limited on 5th August, 2019; Birla Cable Limited on 6th August, 2019 and Birla Corporation Limited on 13th August, 2019 through its Chairperson, Justice Mohit Shantilal Shah (Retd.) or any person(s) as this Hon''ble Court may deem fit, in terms of the decisions of APL Committee and/or at the instance of APL Committee and/or in consultation with the APL Committee;

(c) If necessary, an order be made directing adjournments of the Annual General Meetings of Vindhya Telelinks Limited, Universal Cables Limited, Birla Cables Limited and Birla Corporation Limited until such time as this Hon''ble Court deems fit and proper.

(d) If necessary, notice be issued to the concerned companies, trust and societies of the MP Birla Group as mentioned in the scheduled being Annexure "M", to ensure compliance of the decision dated 19th July, 2019 of the Committee in such manner as may be directed by the Committee;

(e) Ad interim orders in terms of prayers above;

(f) Costs of and incidental to this application be paid by the plaintiffs;

(g) Such further and/or other order or orders be passed, direction or directions be given as Your Lordship may deem fit and proper."

3. A supplementary affidavit has also been affirmed on 31st July, 2019 in connection with G.A. 1735 of 2019 by Arvind Kumar Newar defendant no, 1(b), whereby the he has prayed for further additional prayers as set out below:-

"(a) A direction do issue upon the plaintiffs and particularly Harsh Vardhan Lodha to implement the decision dated 30th July, 2019 of the Committee;

(b) A direction do issue upon the plaintiff Harsh Vardhan Lodha restraining him from offering himself or holding himself out or proposing himself as a candidate for re-appointment as a Director of Vindhya Telelinks Limited and Birla Cable Limited at their Annual General Meetings convened to be held on 5th August, 2019 and 6th August, 2019 respectively;

(c) A direction do issue upon the plaintiff Harsh Vardhan Lodha restraining him from seeking any position on the Board of Directors of Vindhya Telelinks Limited and Birla Cables Limited at their Annual General Meetings convened to be held on 5th August, 2019 and 6th August, 2019 respectively;

(d) A direction do issue upon plaintiff Harsh Vardhan Lodha to forthwith recall, rescind and/or withdraw his consent, if any, given to Vindhya Telelinks Limited and Birla Cables Limited for re-appointment as a Director of the said Companies or holding any position whatsoever therein;

(e) A direction do issue upon the plaintiff Harsh Vardhan Lodha restraining him from seeking or withdrawing or claiming any profit based remuneration or commission from Vindhya Telelinks Limited (VTL), Birla Cables Limited (Bcab), Universal Cables Limited (UCL) and Birla Corporation Limited (BCL);

(f) An injunction do issue restraining the plaintiff Harsh Vardhan Lodha from acting as Chairman or Director of Vindhya Telelinks Limited and Birla Cable Limited under any circumstances whatso

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Judicial Analysis

2020 Supreme(Cal) 576

The Probate Court has jurisdiction to preserve an estate through the APL, which can act by majority, ensuring interim protection for beneficiaries pending resolution of disputes.

Cases Referred (31)

Judicial Analysis