A little over three years since a single judge of the Calcutta High Court passed an order directing the removal of Harsh Vardhan Lodha as the chairman of the MP Birla Group, a division bench of the Calcutta HC on Thursday ruled that the single-judge bench could not have interfered with the functioning of the companies, trusts and societies of the group.
“There cannot be universal or dynamic injunction or direction affecting the future course of action of the companies from the Testamentary Court,” the two judges said in their judgment, referring to the disputed verdict of the single judge of the Calcutta HC passed on September 18, 2020. The court could not do so “simply because the testatrix (Priyamvada Devi Birla) could not herself had taken such an action in law”, the bench added.
The group’s business interests are cement, jute, cables and guar gum processing. The group also has 11 schools and 12 hospitals, which are run as non-profits.
Several members of the extended Birla family challenged the late Priyamvada Birla’s will, kicking off a protracted legal battle straddling various courts and judicial forums.
Harsh Lodha is the son of the late Rajendra Singh Lodha.
Thursday’s verdict has imposed several restrictions on the functioning of the committee of administrators, which in the past few years have taken several decisions by 2:1 majority and pressured companies, trusts and societies of the MP Birla Group to implement them. Several attempts have been made in the past few years to remove Lodha as the director and trustee of the MP Birla Group.
In their verdict, the two judges clarified that the administrators cannot interfere with the internal affairs of companies, trusts and societies. The remit of the administrators only extends to the shares owned by the late Priyamvada Birla, the division bench said.