Priyamvada will case: SC dismisses Birla Corp SLP on document theft

Documents were submitted by minority shareholders before erstwhile CLB to prove charges of mismanagement and irregularities against Harsh Lodha, chairman of Birla Corp and other officials

The Supreme Court on Wednesday, dismissed a special leave petition (SLP) moved by MP Birla Group company, Birla Corporation, against a group of minority shareholders who are close associates of the larger Birla family, alleging theft of vital documents from its registered office at Birla Building in Kolkata. 

These documents were submitted by these minority shareholders before the erstwhile Company Law Board to substantiate their allegations of acts of oppression and mismanagement and serious irregularities in the operational and financial affairs against Harsh Lodha, chairman of Birla Corporation and other company officials.

The SLP was filed by Birla Corporation against a 2015 Calcutta High Court directive which partly remanded the matter to the Magistrate for a fresh consideration in respect of certain documents. 

When contacted, a source in Birla Corporation said the company doesn’t have any comments on this matter.

The Supreme Court, in its order, said, “Considering the facts and circumstances of the present case and the number of litigations pending between the parties, in our considered view, continuation of the criminal proceedings would be an abuse of the process of the court.” 

It also quashed the order of the Magistrate taking cognizance of the offences and the issuance of summons to all the respondents and the criminal proceedings thereon while dismissing the appeal of Birla Corporation.

The apex court observed that there are no specific allegations as to when, where and how the minority shareholders in question committed the alleged theft and there aren’t specific allegations against the accused. 

“It would be far-fetched to say that the respondents (minority shareholders) have dishonestly removed the documents and committed the offence of theft and that they are to face criminal prosecution for theft of the documents. It would only be an arm-twisting tactics to deprive the respondents from pursuing their defence with relevant evidence and materials”, the order said.

While late Priyamvada Birla, widow of Madhav Prasad Birla, bequeathed her business empire to the Lodhas, who now control Birla Corporation, by means of a purported will of 1999. The Birla family members and their close associates have moved the Calcutta High Court challenging the purported revocation of five mutual and reciprocal trusts created by M P Birla and Priyamvada Birla in 1988 to leave their estate for charity. It includes the controlling block of shares representing the controlling interest in and controlling power over all the companies of MP Birla Group, including the Birla Corporation. 

These trusts are said to have been revoked just three days prior to the purported will of 1999 allegedly executed by late Priyamvada Birla in favour of the late Rajendra Singh Lodha, father of Harsh Lodha.