The Probate Court of the Calcutta High Court, which is hearing the dispute between the Birlas and Lodhas over Priyamvada Devi Birla’s will, has asked the three MP Birla Group entities - Birla Corporation, Birla Cable and Vindhya Telelinks – to appear before the court even as it is deciding on the issue of jurisdiction.
While the Birlas have maintained that the three companies in question are part of the dispute and hence will fall under the orders and decisions of the Probate Court, the Lodhas have asserted these MP Birla Group entities are not part of the proceedings regarding the estate of the late Priyamvada Devi Birla.
“The single-judge bench 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 judge. The 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 (H V Lodha) as director in two of these companies and remuneration to him by none of them”, a Birla family spokesperson said.
Meanwhile, Birla Cable and Vindhya Telelinks have already reinstated H V Lodha as director and Birla Corporation, together with the other companies, has already implemented a profit-linked pay package for Lodha and other directors. The dividend is in the process of being disbursed. Results of all these resolutions could not be published earlier due to a stay from the single-judge bench of Calcutta HC.
While the Birlas reason that the “preservation and protection of the control of Estate of Priyamvada Devi Birla over the MP Birla Group” makes these companies part of the Probate Court proceedings, the Lodhas say 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.
This issue flared up after the Birlas obtained a stay from a single-judge bench of the Calcutta High Court last year preventing these companies to publish their Annual General Meeting (AGM) results.
However, on May 4 this year, the Division Bench of the Calcutta High Court, while hearing appeals from these companies, had allowed them to make public the voting results in the AGM.
The Birla family 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 Harsh Vardhan Lodha and other issues pending before it relating to control over MP Birla Group companies.
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According to the Birla family 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 Supreme Court 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 H. V. Lodha in these companies hangs by a thin thread”, the Birla family spokesperson said.
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 Court rejected all the desperate but futile attempts made by Lodha to curtail the reach of the court”, the Birla family spokesperson said.
When contacted, the MP Birla Group did not comment on the development.
The Birlas have been of the view that the Supreme Court directive categorically enables the Probate Court to re-look into the disputed issues of reappointment of Lodha to the Boards of the M. P. Birla Group companies and the matters relating his remuneration as director after hearing the companies concerned.