You are here: Home » Companies » News
Business Standard

Hearing of injunction against Birla Corp-Lafarge deal postponed

If all wills fail the legal test, then Newar family could be a beneficiary of the estate

BS Reporter  |  Kolkata 

Gavel image via Shutterstock
Gavel image via Shutterstock

The hearing of a petition of Laxmi Devi Newar’s family seeking an injunction against the Birla Corp-Lafarge deal, one of the largest cement deals in recent times, got postponed in the Calcutta High Court on Wednesday.

Judge Girish Gupta has asked the two parties — Harsh Lodha and the Newar family — to take a call on whether he should be hearing the case given that he avails of the services of a nursing home, which is a property of a party to the case. The decision would have to be conveyed by Thursday.

Counsels handling the case said if the decision was in favour of Gupta, the hearing could start on Thursday. Newar, the sister of late Madhav Prasad Birla, died in 2005. The petition seeking the injunction against the deal has been filed by her son Arvind Newar and some others. This is not the first petition from the Newar family in the battle of wills between the Birla and Lodha family. Newar is also one of the defendants in the main probate case of the alleged will of 1999 by late Priyamvada Birla. The focus of the current legal battle is the Birla Corporation’s deal to acquire Lafarge India’s Jojobera and Sonadih units for an enterprise value of Rs 5,000 crore.

In volume terms, it would give Birla an annual cement capacity of 15 million tonnes from a shade less than 10 million tonnes at present. Newar has sought documents relating to the deal. What is Newar’s interest in the case? “She was a natural heir. If all wills fail, then Newar will be a beneficiary of the estate,” said an official close to the Birla family.

The history of the battle of wills dates back to 2004 when Madhav Prasad Birla’s widow Priyamvada died. Soon, a will bequeathing her estate believed to be worth Rs 5,000 crore to well-known Kolkata-based chartered accountant Rajendra Singh Lodha surfaced. Different members of the Birla family waged legal battles to challenge the will of 1999. In the past decade, wills other than the 1999 one had also come to light.

The Birla family had filed for probate of two “mutual wills” of Madhav Prasad Birla and Priyamvada. The mutual wills dated July 13, 1982 bequeathed each other all properties upon death and the executors of the will to have the authority to make over, donate or settle for charitable purposes.

The wills were mutual, the only difference being in the executors. The executors of late Madhav Prasad Birla’s will were K K Birla, Pradip Khaitan (of Khaitan & Co), and Kashinath Tapuriah (brother of Priyamvada Birla). The executors of Priyamvada Birla’s will were G P Birla, Pradip Khaitan and Kashinath Tapuriah.

First Published: Thu, September 10 2015. 00:37 IST