Priyamvada Devi Birla will case: HC notice to 3 firms of MP Birla Group

On Monday, the Single Judge of the Calcutta High Court gave directions for issuance of notice to these companies in terms of orders of the Division Bench and Supreme Court.
The Calcutta High Court on Monday issued a notice to three MP Birla Group entities to appear before the court on June 12 over the dispute between the Birlas and Lodhas on Priyamvada Devi Birla’s will. The companies — Birla Corporation, Birla Cable, and Vindhya Telelinks — are likely to send their representatives even as the court decides on the issue of jurisdiction.

Though the MP Birla Group did not comment on the development, a family spokesperson said: “The Single Judge has passed order for issuing notice when despite the explicit directions of the Division Bench and Supreme Court, the companies (of the MP Birla Group) abstained from appearing before the Single Judge. The said companies will now be heard in deciding the issues emanating from the decisions of the court-appointed committee, including non-reappointment of Harsh Vardhan Lodha as director in two of these companies and remuneration to him by none of them.” 

Birla Cable and Vindhya Telelinks have reinstated Lodha as the director, and Birla Corporation, together with the other companies, have already implemented a profit-linked pay package for Lodha and other directors. Results of all these resolutions could not be published earlier because of a stay from the Single Judge Bench.

While the Birlas reason that the “preservation and protection of the control of the estate of Priyamvada Devi Birla over the MP Birla Group” makes these companies part of the Probate Court proceedings, the Lodhas reason that a company cannot be made part of proceedings involving a conflict between shareholders. Several entities of the MP Birla Group are promoter shareholders in these three companies.

The issue flared up after the Birlas obtained a stay from a Single Judge Bench of the HC last year, preventing these companies to publish annual general meeting (AGM) results. On May 4 this year, the Division Bench of the court, however, allowed them to make public the AGM voting results. The Birla spokesperson said that while doing so, the Division Bench had directed the Single Judge to hear the said companies in deciding the issue of directorship of Lodha and other issues pending before it. According to the spokesperson, the order of the Division Bench was upheld by the Supreme Court with several caveats and additional protections to the Birlas. 

“Most important, the SC protected Birlas by making the result of resolutions published by the said companies subject to the final decision by the Single Judge. Hence, the fate of the said resolutions and future of Lodha in these companies hangs by a thin thread,” the spokesperson said.

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