Business
Birla-Lodha case: Calcutta high court restricts role of administrators – Times of India
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KOLKATA: The Calcutta high court on Thursday restricted the role of interim administrators, who are looking after the Priyamvada Devi Birla Estates (PDB), in the functioning of the M P Birla Group companies. The Lodhas had moved court alleging that the administrators, appointed by the HC in 2012, were interfering in the running of these companies.
A division bench said the interim administrators, despite their legal backing, could not interfere with the internal affairs of the companies.”There cannot be any universal or dynamic injunction or direction (by the administrator) affecting the future course of action of the companies,” the HC said. Birla insiders indicated the order would be challenged in the Supreme Court.
The 19-year-old legal battle started when Priyamvada Devi Birla died on July 3, 2004, leaving behind everything she owned to R S Lodha, her adviser. Immediately after her death, six members of different factions of Birla families staked claim to the estate and challenged the will.
The bench said the administrators, through their nominees, could decide how to assert the interests of the Priyamvada Devi Birla Estate, but added, “Such process can only be done in legal manner and in due process of law.” The HC said the administrators “cannot jump steps to directly take or pre-empt business decisions”. The court added Harsh Vardhan Lodha’s (son of R S Lodha) role as chairman of the board of directors of Birla Corporation and as a “legatee” could not be mixed up.
A division bench said the interim administrators, despite their legal backing, could not interfere with the internal affairs of the companies.”There cannot be any universal or dynamic injunction or direction (by the administrator) affecting the future course of action of the companies,” the HC said. Birla insiders indicated the order would be challenged in the Supreme Court.
The 19-year-old legal battle started when Priyamvada Devi Birla died on July 3, 2004, leaving behind everything she owned to R S Lodha, her adviser. Immediately after her death, six members of different factions of Birla families staked claim to the estate and challenged the will.
The bench said the administrators, through their nominees, could decide how to assert the interests of the Priyamvada Devi Birla Estate, but added, “Such process can only be done in legal manner and in due process of law.” The HC said the administrators “cannot jump steps to directly take or pre-empt business decisions”. The court added Harsh Vardhan Lodha’s (son of R S Lodha) role as chairman of the board of directors of Birla Corporation and as a “legatee” could not be mixed up.
