In a major setback to Lodhas, the Calcutta High Court on Friday directed the removal of Harsh Vardhan Lodha from the M P Birla group of companies, making it a major victory for the Birlas in the 16-year-old battle over Priyamvada Birla’s will.
The Birlas said that the high court had restrained Harsh Vardhan Lodha from holding any position in the M P Birla group. The court has directed implementation of the decision of the committee of administrators.
These directions mean that Harsh Vardhan Lodha immediately ceases to hold all positions in the M P Birla group, including that of a director in the companies and other positions in the trusts and societies of the M P Birla group, a statement from the Birlas read.
Lodha is the chairman of M P Birla group companies. The court has also restrained him from interfering with any decision of the APL Committee (committee of administrators Pendente Lite of the estate of Priyamvada Birla), which is taken by majority, the statement from the Birlas added.
However, the court has held that since the companies were not parties to the testamentary proceedings, directions cannot be passed against them. However, decisions of the APL Committee shall be implemented by Lodhas, who are plaintiffs in the testamentary proceedings.
Debanjan Mandal, partner, Fox & Mandal, advocates for Lodha, said, “The verdict by Justice Sahidullah Munshi over reappointment of Harsh Vardhan Lodha as a director of Vindhya Telelinks Ltd and Birla Cable Ltd does not appear to be lawful. Our client’s confidence in the system remains completely unshaken and our client will challenge the judgment for immediate and long-term relief.”
Lodhas will move the Appeal Court. “Lodha’s reappointment as director in the two said companies was reviewed by two higher courts, including the Supreme Court, and the initial order restraining the companies from publishing the results of polls taken at their AGMs last year was set aside. The orders passed on Friday were not even asked for and will be challenged on this ground,” said the advocate for Lodha.
In addition, the jurisdiction of the probate court and the impermissibility of such orders affecting shareholders’ decision of reappointment of a director/ chairman will be raised before the Appeal Court, the Lodha side said.
The APL Committee – which had been appointed by the high court in 2012 to administer and manage the estate of Priyamvada Birla – has been in focus for the past one year for opposing Lodha’s reappointment in M P Birla group companies. In July 2019, it had directed Lodha’s removal by a majority decision from the boards of Vindhya Telelinks and Birla Cables. It had also refused to support the resolution for the payment of profit-based remuneration to Lodha.
In the same vein, it refused to support resolutions for reappointment of Lodha and profit-based remuneration in Birla Corporation and Universal Cables this year.
The resolutions in all these companies, however, were passed by more than 97 per cent shareholder votes in favour.
For the implementation of APL Committee decisions Birlas had filed an application before the high court last year, that set off a fresh round of legal battle moving all the way up to the Supreme Court. The apex court said that the decision taken by the companies would be subject to the final outcome of the high court decision.
The statement from the Birlas today said, “His stranglehold on the M P Birla group has been brought to an end by the Calcutta High Court.”