You are here: Home » Companies » News
Business Standard

HC orders removal of Harsh Vardhan Lodha from MP Birla group companies

Lodha ceases to hold all positions in Birla group, including as director in companies and other positions in trusts, societies

Topics
Calcutta High Court | Birla Corporation

Ishita Ayan Dutt  |  Kolkata 

HC nullifies acquisition of 50 acres land in Baruipur in WB
Calcutta High Court removes Harsh Vardhan Lodha from M P Birla group of companies.

The (HC) on Friday restrained Harsh Vardhan Lodha from holding any office in M P Birla group entities, marking a crucial victory for the Birlas in the 16-year-old battle over Priyamvada Birla’s will.

The order said, Harsh Vardhan Lodha is restrained from holding any office in any of the entities of M P Birla Group during pendency of the suit (testamentary). The court also 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 as director in the firms 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 The court has also restrained Lodha 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 Birla statement added.

However, the court has held that since the were not parties to the testamentary proceedings, directions cannot be passed against them but decisions of the APL Committee shall be implemented by Lodhas, who are plaintiffs in the testamentary proceedings.

Debanjan Mandal, partner, Fox & Mandal, advocate for Lodha, said, “The verdict by Justice Sahidullah Munshi over reappointment of Harsh Vardhan Lodha as director of Vindhya Telelinks, Birla Cable and 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.”

ALSO READ: Paytm returns hours after Play Store exit over alleged policy violation

Lodhas will move the appeals court. “Lodha’s reappointment as director in the two said (Vindhya Telelinks and Birla Cable) 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 court passed directions against Lodha in terms of Section 247 of the Indian Succession Act.

chart

In a separate statement, a spokesperson for Birla Corporation, said, the company will examine the judgement and take necessary steps including filing of appeal because the verdict seems to have ignored shareholders’ democracy and their right to elect by majority of their votes a person as a director of a company.

"Shareholders elected Harsh Varshan Lodha as a director of with an overwhelming majority of 98 per cent. Mr Lodha being otherwise not disqualified from holding the office of director, there is no reason why the verdict of shareholders will not be respected," the spokesperson added.

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.

ALSO READ: Women lead race to head WTO amid rising protectionism, deep recession

In July 2019, it had directed removal of Lodha 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 and Universal Cables this year.

The resolutions in all these firms, however, were passed by more than 97 per cent votes of shareholders.

For implementation of the 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 the decision taken by the companies would be subject to the final outcome of the high court decision.

The Birla statement on Friday said, “His stranglehold on the M P Birla group has been brought to an end by the

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, September 18 2020. 17:30 IST
RECOMMENDED FOR YOU
.