Birla versus Lodha battle: Calcutta HC division bench does not grant any stay on single bench order

A division bench of the Calcutta High Court on Thursday did not grant any stay on the single bench’s order, which had restrained Harsh Vardhan Lodha from holding any office in any of the entities of the MP Birla Group during pendency of the suit involving the contested will of late Priyamvada Devi Birla, the widow of MP Birla.

Following the single bench’s order, passed by Justice Sahidullah Munshi of the High Court last month, Lodha and MP Birla Group entities filed multiple applications before the division bench, challenging the single bench order.

Passing an interim order, the division bench of Chief Justice Thottathil B Nair Radhakrishnan and Justice Shampa Sarkar, said, “… the prayer for ad interim stay of the judgement and order impugned dated September 18, 2020 is declined.”

Notably, on September 18, passing his order, Justice Munshi said, “Harsh Vardhan Lodha is restrained from holding any office in any of the entities of MP Birla Group during pendency of the (Testamentary) Suit.”

The genesis of over 16-year-old legal row between the Birlas and the Lodhas for controlling the over `5,000 crore-Birla Estate lies in the contested will of late Priyamvada Devi Birla, the widow of MP Birla, which was executed in July 1982 after the purported will allegedly transferred the shares of the MP Birla Group, collectively called as the Birla Estate, in favour of Rajendra Singh Lodha.

The legal tussle began after the July 1982 wills that gave away all the assets to charities but another will of April 18, 1999 gave them to Rajendra Singh Lodha, now being pursued by his son Harsh Vardhan Lodha, and other heirs.

Commenting on Thursday’s order, NG Khaitan, partner, Khaitan & Co, legal advisers for Birlas, said, “Lodha wanted a stay order of the trial court which was refused by the appeal court.

“So, now he is restrained from holding any office in any of the entities of the MP Birla Group. And now APL (administrator pendente lite) Committee are in control of the Group companies and entities.”

Debanjan Mandal, partner, Fox & Mandal, representing Lodha, said Thursday’s interim order “significantly relaxed restrictions” imposed earlier by the single bench on Lodha’s holding offices in the MP Birla Group.

“Modifying an earlier verdict of the Calcutta High Court passed on 18 September, chief justice Radhakrishnan and Justice Sarkar said on October 1 that Lodha should not hold any office in the group only on the strength of the shares referable to the estate of Priyamvada Devi Birla,” Mandal said.

“The estate is under the custody of a court-appointed committee of three joint administrators, commonly referred to as APL (Administrators Pendente Lite) Committee. Lodha was reappointed as a director in all four listed companies in the last two years with at least 98% votes cast in his favour. Our client wasn’t, in the first place, reappointed as a director in these companies on the strength of the estate of Priyamvada Devi Birla,” he said, adding the order, thus, paved the way for Lodha continuing to hold offices in these companies as he was doing uninterruptedly from before the death of Priyamvada Devi Birla.

According to Mandal, the parties have been directed to exchange their respective replies, after which the appeal of Lodha against the single bench order will again be heard by the division bench.