TMI Blog2021 (1) TMI 816X X X X Extracts X X X X X X X X Extracts X X X X ..... ti Lite adopted various resolution and lastly on 19th July, 2019 and 30th July, 2019 in the interest of the estate so that the estate is preserved in its original form and it can be distributed to the rightful person. Since the Administrator Pendente Lite is under the immediate control of the court and its decision has not been implemented or could not be implemented by reason of objection by the nominee member of the plaintiff and while it is argued by the plaintiffs that the decision not being unanimous the plaintiffs are not inclined to implement the same the defendant/petitioner have come up with a prayer for a direction upon the parties to implement the decision of APL holding that the decision passed by the APL by majority is a good decision for all purpose and it should be carried out. The deceased had controlling shareholding in the investment Companies either by direct investment or along with other Investment companies. APL while exercising its authority over the estate of the deceased does not appear to have violated the order dated 23rd August, 2012 and therefore, it cannot be said that parties are not bound by the decision of the APL unless a contrary is proved. If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n given facts and circumstances, it is to be decided with sound exercise of judicial discretion to meet the ends of justice. Prima facie case is that which raises substantial question, of course bona fide, which needs investigation and, ultimately, a decision on merits - A case of temporary injunction is an action preventive in nature and a specie of precautionary justice intended to prevent apprehended wrong or anticipated mischief which if allowed to happened may not be un done and cannot be compensated by money. This Court is of the view that the defendant/petitioners have made out sufficient case to get an interim order/temporary injunction to preserve and protect the interest of the ultimate beneficiaries under the Will of PDB concerning the estate of the deceased and this Court in aid of the final relief in the Testamentary Suit in exercise of the power conferred under section 247 of Indian Succession Act, passes the following orders: (a) The plaintiffs shall implement the decision dated 19th July, 2019 and 30th July, 2019 of the APL Committee taken by majority as also all consequential decisions of the APL in furtherance of the said decisions and shall be restrained fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2019, G.A. No. 1786 of 2019 have been filed by the plaintiffs. 2. G.A 1735 of 2019 has been taken out by the defendants in the form of an affidavit in support of master summons affirmed on 30-7-2019 by one Arvind Kumar Newar defendant No. 1(b)/applicant with the following prayers: (a) A direction do issue upon the plaintiffs to implement the decision dated 19th July, 2019 of the Committee. (b) A direction do issue upon the Committee to exercise its voting rights flowing from the shareholding in various companies, trust and societies of MP Birla Group forming part of the controlling interest and controlling power vested in the Estate of Priyamvada Devi Birla by casting its votes at the ensuing Annual General Meeting of Vindhya Telelinks Limited on 5th August, 2019; Universal Cables Limited on 5th August, 2019; Birla Cable Limited on 6th August, 2019 and Birla Corporation Limited on 13th August, 2019 through its Chairperson, Justice Mohit Shantilal Shah (Retd.) or any person(s) as this Hon'ble Court may deem fit, in terms of the decisions of APL Committee and/or at the instance of APL Committee and/or in consultation with the APL Committee; (c) If necessary, an o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Limited (BCL); (f) An injunction do issue restraining the plaintiff Harsh Vardhan Lodha from acting as Chairman or Director of Vindhya Telelinks Limited and Birla Cable Limited under any circumstances whatsoever; (g) Ad interim orders in terms of prayers above; 4. Initially after the prayers made in G.A. 1735 of 2019, supplementary affidavit was filed thereto containing some independent prayers and also another application being G.A. 1845 of 2019. 5. G.A. 1845 of 2019 (New G.A. 46 of 2019) is an affidavit in support of master summons taken out by Arvind Kumar Newar defendant no. 1(b). This application was affirmed on 7th August, 2019, that is, after this Court passed interim orders on 2nd August, 2019 and 5th August, 2019 in G.A. 1735 of 2019 together with supplementary affidavit filed therein. This application has been filed essentially seeking modification and/or clarification and also for further direction in support of the interim orders earlier passed. It has been pointed out that when this Court passed order on 2nd August, 2019 and 5th August, 2019 it directed that the result of the election in relation to impugned resolution including remuneration of Harsh Vard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Government due to Covid-19 pandemic. During lockdown, however, an order was passed by the Hon'ble Chief Justice whereby all the applications have been assigned before this Court and with the assignment this Court found that an order was passed by the Division Bench on 4th May, 2020 whereby this Court's interim order dated 2nd August, and 5th August, 2019 were set aside and remanded the matter back to this court for fresh hearing. The order passed by the Division Bench on 4th May, 2020 was challenged by way of Special Leave Petition before the Hon'ble Apex Court. The Hon'ble Apex Court directed Since the learned Single Judge is seized of the applications for interim relief, we only clarify that the resolutions which have been passed by the respective companies shall abide by such final orders as may be passed by the learned Single Judge. The learned Single Judge shall decide upon the issue of jurisdiction together with the applications for interim relief and render a final determination thereof. The learned Single Judge shall endeavour to do so preferably within a period of one month of the receipt of a copy of this order. Only after these orders were pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by a majority as Court has used the word 'Joint Administrators'. iv. Decision of APL with Justice H.P. Shah by 2:1 majority is in violation of natural justice. v. Petitioner/defendants being not aggrieved by the decision of APL cannot move the probate Court as per order dated 23rd August, 2012. vi. There has been deliberate omission from order of the Division Bench dated 23-8-2012 the words 'share holding' and added 'trust and societies' in Prayer-B of the summons. vii. Estate of PDB must be read according to the affidavits of assets by the defendants in PLA 242 of 2004. viii. PDB holding share in any company was never included in the estate of PDB. ix. Decision of APL (2:1) dated 19-7-2019 is not valid. x. Prayer-b should apply only to share held by PDB and not the companies. xi. Whether APL has got any voting right or not? And who has got voting right? xii. Order of appointment of APL authorized to exercise voting rights (a) where PDB held shares; (b) Shares held by trust and societies in companies and (c) the promoter's shares does not form part of the estate. 14. G.A. No. 1761 of 2019: This application has been filed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no jurisdiction over matters relating to Companies Act, the argument advanced on behalf of the plaintiffs appears to be self-contradictory and mutually destructive. 16. G.A. No. 1786 of 2019: This is also an application filed by the plaintiffs making the same prayer which has been made in application being G.A. 1761 of 2019 with the only difference that prayer was made in G.A. 1761 of 2019 was seeking an order to set aside resolution by majority of the APL Committee passed on 19th July, 2019 and this application has been filed with the same prayer for setting aside the majority decision of the APL passed on 30th July, 2019. The observation made by this Court hereinbefore, in G.A. 1761 of 2019 is applicable to decide the fate of this application too and deserves the same result, consequently the application stands dismissed. 17. Previously Mr. Mitra submitted elaborately referring to his affidavit filed by his client earlier, he made submission both on question of jurisdiction and on merits of the application while summing up he again repeatedly harped upon the jurisdiction of the Probate Court to consider application being G.A. 1735 of 2019, G.A. 1845 of 2019. The other two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been sought for against a third party companies and Probate Court has no jurisdiction to pass order against such Companies. He relies on the following decisions (2017) 4 CHN 114. He refers to section 269 of Indian Succession Act particularly section 269(2) which says about the power of Probate Court. Ramchandra Ganpatrao Hemde v. Vithalrao Hande AIR 2011 Bom 136 (para 5 and 14) also discusses about the limitation of the Court under section 269 (2) in passing interlocutory order particularly to the person belonging to excepted category. He submits that a Probate Court can only consider an application for appointment of Administrator Pendente Lite and can pass interim order only when such an application is pending but once Court has appointed Administrator Pendente Lite it cannot pass any interlocutory order. He relies on an unreported decision in Title Suit No. 9 of 2017 passed by Arindam Mukherjee. J. He relies on paragraph 7 of the decision 19. The plaintiffs principally raised the following points on jurisdiction: (1) That the defendant's applications seeking a direction upon the plaintiff to implement APL's decision are untenable in law. The plaintiff under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Single Judge was that The main estate of the said deceased are the share held by her, of the various companies. He submitted that an APL is to be appointed for preservation and protection of these shares. Therefore, according to Mr. Mitra APL was to be appointed for preservation and protection of those shares held by PDB. (b) He further submitted, besides shares in every Birla Group of Companies there are some bonds, fixed deposits, mutual funds and investment shares which are all recorded in the name of said deceased. (c) Since death of the said deceased a bank account was opened by R.S. Lodha (RSL) in the name of the estate of the said deceased and therein all interest, income dividends from mutual funds and dividends from all the shares both investment companies and share in MP Birla Group of Companies are regularly deposited. (d) He submitted that appointment of APL should be made conferring power, duties and responsibilities to the extent and mentioned in prayers of his client's application. According to him necessity for appointment of APL' was to protect and preserve the controlling block of shares and not to make the estate vulnerable to risk, loss and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ointed over the same. 26. It was also submitted on behalf of the defendants that during the period when RSL was administering, charges had been brought in the board of directors of the MP Birla Group of Companies by RSL. Even after the death of the RSL family members of RSL would continue to exercise control over the company of MP Birla Group behind. Referring to section 211 of the Indian Succession Act it was submitted that the Administrator of a deceased person is his legal representatives for all purpose and all properties of the deceased. It was contended that powers of Administrator on certain properties is the same as the power of an executor, although, the source of such power is different as the executor derives his power from the will and whereas the APL derives its powers from the statute. In this case immediately after death of the said deceased RSL transferred shares of the said deceased in the investment companies in his own name. To justify the said action of RSL, it was submitted by the learned counsel for Lodha before the Division Bench that RSL was duty bound and obliged as executor, to take control of the shares and transmission was applied, not in his personal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appointment of APL is not only conferred upon the probate Court, but the Civil Court too is clothed with power to appoint in any suit adjudging the validity of the will of a deceased person. The aforesaid power has been supplied by the legislature to the Court undoubtedly to take interim measure pending final disposal of the proceeding. 28. It was contended by Mr. Mitra for the plaintiff that APL can take possession of the share scripts only for limited purpose, namely, to collect dividends and to meet the outgoings of the estate, and not for any other purpose. In other words APL cannot have any right, as ownership of shareholding does not vest in him, unlike official assignee in case of insolvency of any person. This contention, as per the Hon'ble Single Judge (K.J. Sengupta) as His Lordship then was advanced with the support of the judgment of the Supreme Court Balkrishan Gupta v. Swadeshi Polytex Ltd. AIR 1985 SC 520. Justice Sengupta held that the judgment of the Supreme Court is clearly distinguishable as it has been rendered examining power of the Receiver under the provision of Section 182A of the U.P. Land Revenue Act, 1901 and Civil Procedure Code. 29. Thus, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estate in a situation like this when no one can legally take charge of the estate. It is legally incorrect to urge that appointment of Administrators over estate including shares of deceased amount to appointment to take control of the companies for Board of Directors of each and every company run the company. Apprehension of the affectation of business of running company with appointment of Administrator during analogy of Receiver is in my opinion misplaced here at the moment. Hence decisions reported in AIR 1987 Cal 194 and 1988 CLT 61 are inapplicable in this case. I accordingly answer second and third issues in the negative. I repeat appointment would be over the entire estate. 30. The said judgment and order passed by the Hon'ble Single Judge was challenged in appeal by HVL and Ors. The Division Bench presided over by the Hon'ble the then Chief Justice Patel by Their Lordship judgment and order dated 23rd August, 2012 disposed of the same. In the appeal it was the specific contention raised by HVL that there is no necessity for conferring powers on the APL to get the shares of the deceased recorded in their names and to take over responsibility of running the M.P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares of the companies are governed by the Companies Act. In the light of the rules and regulations under the Companies Act, there are two modes by which shares of a company can be obtained, i.e. by transfer and/or transmission as provided under section 108 of the Companies Act to be entered into the register of members. In the fact situation of the case the stocks and shares which forms major part of the estate left by the deceased are the subject matter of administration of the estate, and the only manner these can be administered is by exercising property rights in the shares except distribution to the beneficiaries till the final adjudication in the matter. 32. On the question of controlling block of shares the Division Bench observed In the present case, it is not disputed that the deceased has controlling block of shares in M.P. Birla Group of Companies and if the rights flowing from such shares are kept in abeyance during the pendency of the suit it may be detrimental to the interest of the companies as a whole as the companies may be managed by minority shareholders and/or suffer at the hands of vested interest. We fail to understand the hesitation on the part of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h judgment, inter alia, were on the issue of jurisdiction of the Probate Court and also the issue whether APL has any right and/or authority to be exercised over the controlling block of share in MP Birla Group of Companies (emphasis supplied by me) Few of the grounds in the said SLP will clearly show how the appellants were aggrieved by the order of the Division Bench. It was, inter alia, challenged (i) Whether Administrator Pendenti lite appointed under section 247 of the Indian Succession Act 1925 are the representative of the deceased/testatrix and the assets being part of the estate of the testatrix can be vested in such officers of Court as held by the High Court. (ii) Whether Probate Court can override the provision of Companies Act, 1956 and in particular Section 108 thereof by authorizing the Administrators Pendente lite to apply to the companies for recording their names in the registrar of members of the Companies without any deed of transfer and without administrator pendente lite being the legal representative of the deceased share holder.? It was also contended whether learned judges would not have rendered any finding as to what is detrimental to companies i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5). 38. Mr. Mitra submitted that APL is also the legal representative of the deceased for all purpose. Mr. Mitra also relied on point no 7.2.3 of the notes of submission and cited (Pandurang Shamrao Laud v. Dwarkadas Kalliandas AIR 1933 Bom. 342. 39. Mr. Mitra submitted that APL will exercise all rights and powers over various properties which form part of the estate of the deceased vis-a-vis right to vote. (1) At point No. 8.6 he submitted that share is a property and relied on Chiranjit Lal Chowdhuri v. Union of India AIR 1951 SC 41 (paragraph 52, 54, 59, 60, 69 and 78). (2) Life Insurance Corpn. of India v. Escorts Ltd. AIR 1986 SC 1370 Para 84 and transfer share and terms of share. (3) Maheswari Khetan Sugar Mills (P.) Ltd. v. Ishwari Khetan Sugar Mills AIR 1986 SC 1370 (paragraph 6, 8, 14, 15, 19 and 20). (4) World Wide Agencies (P.) Ltd. v. Mrs. Margarat T. Desor AIR 1990 SC 737. 40. He also referred to point no. 8.11 submitting that shares get automatically transmitted to APL by operation of law. He then referred to point no. 12.7.2 and submitted on the binding precedent and refers to the following decisions:- (1) Union of India v. Dhanwanti Devi [199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e powers conferred by Section 59 of the Indian Income-tax Act, it is provided that income derived from the sale of tea grown and manufactured by the seller in the taxable territories shall be computed as if it were income derived from the business and 40% of such income shall be deemed to be income, profits and gains, liable to tax. According to the appellant, the dividend income received by her in respect of the shares held by her in the said Tea companies is to the extent of 60% agricultural income in her hands and therefore, pro tanto exemption from tax while the Revenue contends that dividend income is not agricultural income and, therefore, the whole of the income to be liable to tax. The Income-tax Officer and on appeal, the Appellate Assistant Commissioner both concurred in holding the whole of the said income to be liable to tax. Income-tax Appellate Tribunal confirmed the view that the dividend income could not be treated as agricultural income in the hands of the shareholder and decided in favour of the Revenue but agreed that its order gave rise to a question of law and formulated the same as set out above and referred it to the High Court. The High Court upheld the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to know from various newspapers reporting that Birla Corporation Ltd. in which Priyamvada Devi Birla had some share was negotiating with Reliance Infrastructure Limited for acquiring four of its cement manufacturing units by purchasing its shares in some States of the country involving a huge investment to the tune of ₹ 4000- 4,200 crores, two applications were taken out by two sets of defendants apprehension that the debt burden of Birla Corporation Limited will increase by about ₹ 3100/- crores if the said deal was executed with Reliance Infrastructure Limited. Identical apprehension of enhancing of debt burden amounting to ₹ 1500/- crores approximately of the company, namely, Birla Corporation Limited was also expressed by the defendants/applicants in case the said company executes the deal of taking over the units of other cement manufacturing company. It was alleged in those applications that since the estate of Priyamvada Devi Birla was the promoter of Birla Corporation Limited and its control vests with the estate of Priyamvada Devi Birla directly or indirectly through interlinking, chain and cross holding of shares, whenever any policy decision which had m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of foreign issue Mr. Mitra relied on various decisions before the Coordinate Bench which have again been cited here before this Court. The decisions cited before the Coordinate Bench and those relied on again here are as follows:- 1. Mrs. Bacha F Guzdar v. CIT AIR 1955 SC 74; 2. Murarka Paint Varnish Works (P.) Ltd. (supra); 3. Jagadish Prasad (supra); 4. Subarban Bank Pvt. Ltd. (supra). 46. Mr. Mitra has also advanced similar argument before this Court on issues which had already been argued earlier before the Coordinate Bench. On going through the decision rendered by the Coordinate Bench it appears that the Coordinate Bench was of the opinion that interim order is always granted in aid of the ultimate relief which is, in fact, an age old established principles of law and followed by all the Indian Courts. The Coordinate Bench held that since the only ultimate relief before the parties in the probate proceeding was in respect of grant or refusal of the probate and/or letter of administration in aid of which the defendant's prayer could not be accessed through, the Coordinate Bench held that merely because there was apprehension of some future acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsulted. Precisely this grievance was about the future deal of Birla Corporation Ltd. with some other companies and more precisely that it was related to future acquisition of property which, ultimately, may not be considered to be the property of the estate. Therefore, the Coordinate Bench held that it was beyond the jurisdiction of the probate Court. Here it is profitable to rely on paragraph 159 of the judgment and order dated May,19, 2016, which clearly said To conclude, I hold that since the decision of the Board of Directors in taking over four cement manufacturing units of Reliance Infrastructure is not subject to the control of the Promoters' controlling power over the management of the said company and further since the Probate court cannot pass any direction and/or injunction order against any person who is not a party to the Probate proceeding and further since no adjudication of a foreign issue is possible before the Probate court in the absence of any party who has no caveatable interest in the Probate proceeding, this Court holds that the relief claimed by the applicants in the applications, cannot be granted. In my considered view the ratio arrived at by the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved at different stages of the interlocutory proceedings, was not only binding upon the parties but also was binding upon that Court and accordingly the Coordinate Bench held that it had no hesitation to hold that such controlling power was an important and valuable asset belonging to the estate of Mrs. Birla. This finding has never been challenged by the plaintiffs (emphasis supplied by me). 50. In this connection it may also be noted that plaintiff HVL is a Chairman of BCL has a duel role and in any one capacity if his action appears to be prejudicial to the interest of the estate and the capacity under which such prejudice is caused is amenable to the Probate Court which cannot shut its eyes refusing to interfere with the proposed action on the part of such person causing prejudice to the interest of any party having caveatable interest in the assets. However, in view of what has been held in paragraph 132 by the Co-ordinate Bench I refrain myself from holding that by virtue of controlling power of PDB in the said companies, namely, Birla Corporation, Birla Cable Ltd. and Vindhya Telelinks, the defendants can seek an order of injunction directly against those companies who ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of interim orders sought for principally under G.A. No. 1735 of 2019 and G.A. No. 1845 of 2019. 54. Reliefs sought for here are challenging interference with Annual General Meeting of the companies proposing name of plaintiff no. 1 as non-executive Director and payment of profit based remuneration to him, injunction restraining plaintiff no. 1 from participating in the election and to take any benefit out of proposed resolution of the companies contained in the application being G.A. 1735 of 2019 and implementation of APL's decision dated 19th July, 2019. 55. Since I have held that the companies being not parties here, they are not amenable to the jurisdiction to Probate Court. Therefore, prayer for interim injunction against the companies those who were appellants before the Division Bench and not parties on this proceeding, is refused. 56. Mr. A.K. Mitra, has strenuously argued that APL's decision by majority cannot be recognized unless it is passed unanimously. 57.Prem Raj (supra) has been relied on to argue that in absence of any order, Court cannot have any jurisdiction. With deepest of respect to the learned counsel for the plaintiff I am unable to subscr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent issues involving interim applications. 61.Western Coalfield Ltd. (supra) has been cited on the issue whether share holders are owners of company or not. In this regard we have already discussed the decision in Mrs. Bacha F. Guzdar (supra), the decision was cited on the issue whether Birla Corporation is a promoter company and it has got controlling power over other companies having interlinking chain and cross holding of shares. The same has also been discussed by the Coordinate Bench in the earlier decision and made a clear finding to that effect which I respectfully agree. 62.Vodafone International (supra) has been cited to argue that Company is a separate legal persona and the fact that all its share are owned by one person or by the parent company has nothing to do with its separate legal existence. If the owned company is wound up, the liquidator, and not its parent company, would get hold of the assets of the subsidiary. The decision is based on fact dispute involving the Vodafone Group with the Indian Tax Authority in relation to the acquisition by Vodafone International Holdings. In the decision, however, it was held subsidiary control exercised by the parent of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court held that even though, resolution passed in the general body meeting was couched in the form of a recommendation, it was really a final decision taken on the matter by the general body of share holders and the Board of Directors that no right to override the said decision of the general body. It, therefore, held that in the light of resolution the liability of the defendants under the promissory note should be deemed to have been fully remitted and bank was not entitled to realize any further amount from the defendants. In the result the decision of the trial Court was set aside and the suit was dismissed. The appeal filed by the plaintiff/Bank has been allowed by the Single Bench of Kerala High Court. 66.Jagdish Prasad (supra) has been relied on to argue that When powers are vested in a board of directors by the articles of association of a company, they cannot be interfered with by the shareholders as such. If the shareholders are dissatisfied with what directors do, their remedy is to remove them in the manner provided by the articles. But so long as a board of directors exists and particular powers are vested in it by the articles, then they are entitled to exercise t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed later on after considering in detail the material disclosed in all the applications filed both by the plaintiffs and the defendants along with supporting documents thereto erred in law 71. By the affidavit in support of master summons filed on 30th July, 2019 numbered as GA 43 of 2019 (old GA 1735 of 2019) the petitioner made out the following case: (i) Administrator Pendente Lite passed an order on 19th July, 2019 (Annexure A to the affidavit hereinafter referred to as the Committee). This Administrator Pendente Lite (APL) now comprises of Justice Mohit S. Shah (Retd.), Justice AC Chakrabortti and M.K. Sharma. The said Committee by the aforesaid order held that for the purpose of protection and preservation of the estate of Late Smt. Priyamvada Debi Birla (hereinafter referred to as the 'estate') scope and ambit of the estate includes share holding in various companies of MP Birla Group both directly and indirectly and through cross and chain share holdings. APL Committee was appointed by the Division Bench of this Court in the probate proceeding and in course of functioning the present Committee comprising Mr. Justice Mohit S Shah (former Chief Justice of H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee does not go unrepresented. (It was already unanimously decided at APL Committee meeting held on 28th April 2019 that whenever Justice Mohit S. Shah (Retd) attends meetings of the Board of Directors or the shareholders, Justice Mohit S. Shah (Retd.) will be nominated/elected as the Chairman of the meetings). B. one person recommended by APL Committee for each of the following companies is nominated/continues to be nominated as a director on the Board of Directors of the companies: (i) Universal Cables Ltd., (ii) Hindustan Gums Chemicals Ltd., (iii) Birla Cable Ltd., (iv) Birla Corporation Ltd., (v) Vindhya Telelinks Ltd. and in its three wholly owned subsidiaries August Agents Ltd, Insilco Agents Ltd, Laneseda Agents Ltd. 39. The Committee would like to observe that while it does not envisage any difficulty in implementation of its decisions arrived at unanimously, in cases where its decisions are arrived at by majority, such decisions will bind all the parties and the concerned party required to implement such decisions shall take all necessary steps for their implementation. In case, any such party does not do so, the other party/ies will be at liberty to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. The Multi-member body transacts its business after debate, consultation and discussion. The view of multi-member body is expressed unanimously or by votes. For various kind of decisions by multi-member body special majorities are also provided for acceptance of the decision. Normally, all decisions of a multi-member body are expressed by opinion of majority of the members present except where the special majorities are provided in the statue itself. (emphasis supplied) There is no statutory provision or any judicial direction requiring APL Committee to depart from the above general rule enunciated by the Apex Court. 43. Apart from the internal deliberations of the Committee at the meetings held on 15th 16th June 2019, the Committee members have also held internal deliberations through exchange of emails. In view of absence of a unanimous decision, APL Committee is left with no other alternative but to render its decision through a majority of 2:1. Accordingly, Mr. M.K. Sharma is rendering his views separately. 44. The Committee would also like to clarify that the suggestion of Mr. A.C. Chakrabortti regarding appointment of Chairman of five Investment Compani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... casting of votes controlled by the estate as to be by the Committee and/or at the instance of the Committee and no one else. Consequently, the Committee cannot be deprived of its voting rights, which are within its exclusive competence as the General Administrator of the estate. 75. It is the further contention of the defendant/petitioner that Committee has stepped into the shoes of Priyamvada Debi Birla (PDB) who stood as single individual promoter and as the single directing hand of the promoter's group of shares in all of the companies and philanthropic and charitable organizations, trusts and societies and was in exclusive control of the Estate. As per the petitioner the estate being in germio legis, rights of PDB vis-a-vis the estate of the deceased can only be exercised by the Committee and none else. 76. It has been alleged that the plaintiffs/respondents on earlier occasions too, deliberately disregarded and defied the direction of the Committee. The Committee unanimously by its letter dated 8th July, 2013 specifically advised all the companies of MP Birla Group to give prior information before taking any decision with regard to the change in management or manager ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held through cross and chain shareholding and other philanthropic and charitable societies. According to the petitioner it has been falsely contended by the defendant that the same could not be part of controlling rights of the estate. However, according to the petitioner such contentions were rejected by the Committee and it, inter alia, determined the shareholding of Birla Corporation to be 62.9%. 79. Next issue raised by the petitioners that at a subsequent meeting on 20th and 21st July, 2019, the Committee considered three applications dated 14th July, 2019, 17th July, and 18th July, 2019 filed by them before the Committee. Concerning some proposed resolution in the notices for convening Annual General Meeting Vindhya Telelinks Ltd. (VIL), Birla Cable Ltd. (BCL), Universal Cable Ltd. (UCL) and Birla Corporation Ltd. (BCL). In their application dated 14th July, 2019 and 18th July, 2019 the petitioners agitated before the Committee that the resolutions vis-a-vis remuneration by way of profit related commission to the non-executive Directors and particularly huge remuneration to the plaintiff/respondent HVL was highly objectionable. Application dated 14th July, 2019 and 18th J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to ascertain the extent of the estate and reach wherever the estate goes. Because the power of the administration Court is to secure and preserve the estate but not to distribute the assets. He has referred to Section 2(a) of the Administrator General Act, 1963 which defines Assets . Regarding controlling block of shares to the extent of 62.09%, he has shown from his note at page 12 paragraph 36 the extent of share which in total 62.09%. He submits that plaintiffs cannot be permitted to approbate or reprobate because at one point of time this plaintiffs No. 1's father admitted controlling block of shares and he made petition before the Court to protect such controlling block of shares and after his expiry the present plaintiff who has prayed for Letter of Administration is taking a stand contrary to one which was taken by his father. 81. The proposed ordinary resolutions under Item no. 6 of the notices issued on 16-5-2019 of 74th Annual General Meeting the Universal Cables Ltd. discloses payment of remuneration/compensation by way of profit related commission or otherwise as permissible to the Non-Executive Directors including the independent Directors of the Company eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Company, would be in addition to the remuneration by way of sitting fees for attending meeting(s) of the Board of Directors and/or Committee(s) thereof or for any other purpose. 83. Under another notice dated 16-5-2019 in respect of Vindhya Telelinks Ltd. for the proposed 36th Annual General Meeting of the members of the Vindhya Telelinks Ltd. scheduled to be held on 5th August, 2019, the proposed resolutions under Item no. 3 of G.A. 1735 of 2019 disclosed for appointment of a director in place of Shri Harsh Vardhan Lodha who would retires by rotation at the said Annual General Meeting and being eligible offered himself for re-appointment. Under Item No. 6 of the said notice it was proposed to be resolved to accord sanction for payment of remuneration/compensation by way of profit related commission or otherwise as permissible to Non-Executive Directors including Independent Directors of the Company effective from the financial year commencing 1st April, 2019 of such sum or sums as determined by the Board of Directors based on the recommendation of the Nomination and Remuneration Committee provided that payment of such remuneration/compensation by way of profit related Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on with the Will annexed. In the given case appellants and respondent no. 5 lodged caveat and filed affidavit in support thereof for passing the grant of probate of the Will. As such, the probate petition came to be converted into testamentary suit. It was alleged, respondent nos. 1 and 2 were not properly administering the estate of the deceased. It was the case that though certain details were sought from the said respondents they were not responding. As such the appellants were required to file Miscellaneous Petition under the provision of Section 301 of the Succession Act. Certain directions came to be issued by the learned Single Judge in the said proceeding. However, a preliminary objection to the tenability of the said proceedings under section 301 came to be raised by respondent no1 and 2, on the ground that the application under section 301 can be made only by a beneficiary or legatee who accepts the Will and it cannot be made by a person who seeks to dislodge the will and contest the application for probate or letters of administration with the Will annexed. After formulating questions, the learned Single Judge held the Miscellaneous petition to be misconceived and not ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion has been rejected by all the Courts and in a few sentences VISCOUNT SIMON, L.C., has shown that a bare majority of votes is sufficient to effective control of a company. House of Lords in the decision cited opined the meaning of the word 'interest' in the enactment under consideration, and, where one company stands in such a relationship the another, the former can properly be said to have a controlling interest in the latter. This view appears to me to agree with the object of enactment as it appears on the face of the Act. I find it impossible to adopt the view that a person who, by having the requisite voting power in a company subject to his will and ordering, can make the ultimate decision as to where and how the business of the company shall be carried on, and who thus has, in fact, control of the company's affairs, is a person of whom it can be said that he has not in this connection got a controlling interest in the company. As to what may be the requisite proportion of voting power, I think a bare majority is sufficient. The appellant company has, in respect of each of the foreign companies referred to in the case, the control of the majority vote. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of a political nature was irrelevant. Per Lord Hodson and Lord Devlin. If the application for the return of the fugitive had been made for purposes of political revenge, that would have been material to show that it was not made in good faith in the interests of justice. (3) That there was no ground on which it would be proper to interfere with the exercise under section 10 of the discretion of the Divisional Court; and that, accordingly, the appeal must be dismissed. The House of Lords observed This question, which is undoubtedly of importance, having been disposed of, what remains? My Lords, the Divisional Court has exercised a discretionary jurisdiction under section 10 of the Act. Interference with such an exercise can only be justified if that court has clearly acted on some wrong principle, committed some error of law or failed to consider matters which demanded consideration. That is a principle upon which this House, sitting as a final Court of Appeal, has always acted and will, I hope, continue to act, not least in matters of criminal jurisdiction which have traditionally been the province of the Court of King's Bench. I should therefore, be content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ointment of APL becomes meaningless and the order under which they have been appointed gets then frustrated and nugatory. 96. Mr. S.N. Mukherjee learned senior advocate appearing for the defendant no. 1(b)/petitioner submitted that probate Court is the only Court which should act in terms of section 247 of the Indian Succession Act to protect and preserve the interest of the estate left by the deceased. According to him a Probate Court shall always act as the guardian of the properties left by the deceased for the interest of the legatees and in order to protect such interest this Hon'ble Court appointed APL Committee which, in fact, has taken initiative by its resolution dated 19th July, 2019 which is yet to be implemented. Mr. Mukherjee has drawn this Court's attention to a judgment and order dated 25th April, 2005 passed by the Company Law Board, order dated 24th August, 2005 of this Hon'ble Court, order dated 28th June, 2006 of the Company Law Board and order dated 10th May, 2013 of this Hon'ble Court. 97. He has particularly pointed out that part of the order dated 25th April, 2005 where the Company Law Board has observed There is no dispute that the Lat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in terms of Section 247 (1A) of the Act and challenged the said order dated 25-4-2005. An appeal was filed under section 10A of the Companies Act. The Hon'ble Appeal Court held, the appellants, who admittedly owned less than 0.16% of the shares of the Company, filed application in the Company Law Board under section 247(1A) read with Section 250 of the Companies Act, inter alia, praying for orders seeking investigation under the aforesaid provision solely on the ground as disclosed in the application the death of Smt. Birla who had controlling interest in Respondent no. 1 to 28 who jointly held 63.8% of the shares of the company and disputes with regard to the alleged Will allegedly executed by her. The said appeal was dismissed and the order passed by the Company Law Board was upheld. 103. Mr. Mukherjee has also brought to the notice of this Court a judgment and order dated 10th May, 2013 passed in APO No. 154 of 2011 arising out of CP No. 1 of 2010, an appeal from an order passed by the Company Law Board (CLB) presided over by its Chairman on 9th February, 2011. By the said order, the CLB disposed of all the interlocutory applications filed in connection with a petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al, in my prima facie view would have overlapping effect vis-a-vis the issues involved in the probate proceeding. In these circumstances, I do not think it would be proper for me to pass any order or express opinion pertaining to the estate of PDB. It would be for the APLs to take appropriate step so far as the estate of PDB is concerned, in terms of the direction of the Division Bench of this Court. The Hon'ble Court further observed Foundation of the claim of the respondent No. 2 to manage the affairs of the company is derived from his control or influence over the entities having 62.9% shareholding of the company. The Division Bench of this Court has empowered APLs to exercise all rights flowing from the ownership of the shares of PDB. It has also been submitted on behalf of the respondents that an inconsistent case is being run by the appellants as it has been pleaded in the main petition that Late M.P. Birla as also Priyamvada Devi Birla had transferred their properties including shares to five charitable trust. The jurisdiction to decide on this issue, thus, in my opinion, has largely shifted from the domain of CLB to the Probate Court and for trial of suits. 105 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent or decisions, they could be said to be in control . 110. Mr. Mukherjee refers to SLP (c) No. 30109 of 2012 filed by Harsh Vardhan Lodha challenging the Division Bench decision presided over by Justice J.N. Patel the then Chief Justice of this Court whereunder APL was appointed. The Division Bench had the occasion to deal with the appeal filed by the plaintiff challenging the judgment and order dated 27-8-2010 of the learned Single Judge. 111. The aforesaid judgment and order was passed by one of the learned Judges of this Court on an application being GA 3714 of 2008 and GA 3718 of 2008 filed in connection with PLA 242 of 2004 which has been subsequently converted into T.S. No. 6 of 2004. The first one was filed by one G.P Birla and Pratap Kumar Khaitan in the capacity of executors of the testamentary document said to be last Will of PDB executed in 1982 and the second one was filed by one Debendra Kumar Mantri and Smt. Radha Devi Mohta. The two applications were made at a point of time when sole executor R.S. Lodha in connection with testamentary instrument of 1999 died and there was no person to take control and possession of the estate left behind by PDB (since deceas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tee by any means whatsoever. 113. On the issue that testamentary Court's jurisdiction to pass orders even against the strangers, Mr. Viswanathan submitted that companies and institutions are not third parties/strangers to this proceedings. Controverting the contention made by the plaintiffs that companies and the institutions such as the societies and trusts within M.P. Birla Group are strangers to the testamentary proceeding. He submitted that estate includes the controlling block of shares representing the controlling interest and controlling power over the M.P. Birla Group. According to him this has been judicially held to be the most valuable assets of the estate and the said institutions and/or companies such as institutions including societies and trusts are constituents of the said controlling block of shares/controlling interest/controlling power, which has been conclusively and judicially held to be assets of the estate and that those are admittedly controlled by the estate. 114. According to him jurisdiction of the testamentary Court extends to any matter that concerns the preservation of the estate in question. Nobody can be allowed to do indirectly what cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Group as determined in the decision dated 19th July, 2019 of the APL Committee shall be exercised in accordance with the direction of the APL. (e) Voting in respect of resolution no. 3, 6 and 7 of Birla Cable Limited; resolution no. 3, 6 and 7 of VTL; resolution no. 5 and 6 of BCL and resolution no. 6 and 7 of Universal Cable Limited shall be quashed. And the concerned companies shall conduct a re-voting on the said resolutions as per law. 118. He submitted that as a consequence of acceptance of his submission the plaintiff's application being G.A. 1761 of 2019, G.A. 1786 of 2019 and G.A. 2007 of 2019 praying respectively for setting aside the decision dated 19th July, 2019 passed by the APL Committee; setting aside the decision dated 19th July, 2019 of the APL Committee and by setting aside the direction of the APL Committee issued on 1st August, 2019, 2nd August, 2019 and 8th August, 2019 following the decision dated 30th July, 2019 passed by the APL. 119. Mr. Sibal strenuously argued that companies having advanced their argument at length not only on jurisdiction but also on merit cannot take a plea that Probate Court's order should not touch them and their subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bal submitted that Section 2(27) is relevant for the purpose and the same is set out below: S.2(27). Control shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner. 121. On the issue of majority and/or unanimity of the decision of APL Mr. Sibal reiterates what has been submitted by Mr. Viswanathan appearing for defendant no. 1(d) and 2. He, however, submitted that Mr. Chinoy appearing for one of the noticee companies argued that a person/shareholder cannot exercise its vote unless its name appear on the Registrar of Companies. However, the position is different after 2013 Act came into force and the decision whatever relied on by Mr. Chinoy are pre 2013. Therefore, those have no direct bearing in the present case. 122. Appearing for Birla Cable Limited a noticee Company, Mr. Bachawat learned senior advocate, at the beginning of his submission has drawn attention of this Court to G.A. No. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso not legally permissible and the therefore the said order is liable to be set aside. On the same issue Mr. Bachawat has also drawn attention of this Court to a decision in Harsh Vardhan Lodha (supra) decided by a Co-ordinate Bench which I have discussed threadbare in this decision and relied on paragraph 148 which says This Court has no hesitation to hold that the probate Court cannot pass any injunction order against a third party as third party who has no caveatable interest in the probate proceeding cannot be allowed to be added as party in the probate proceeding and also for the reason that no order can be passed effecting the right of the stranger without adjudicating his right and adjudication of his rights in the proceeding is impossible as probate Court cannot decide any foreign issue un-connecting with the probate proceeding. He has also distinguished the principles laid down in Babulal Khandelwal v. Balkishan D. Sanghvi [2008] 10 SCC 485 cited by Mr. Kapoor on which he submitted that the decision relates to any intestate succession and therefore, Hon'ble Apex Court directed for joining the third party in the proceeding. According to Mr. Bachawat the said decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his submission made in Court has been omitted while recording the order dated 12th June, 2020. Purported attempt seeking correction of the order is a ploy to delay the hearing of the case. 127. C.C. No. 20 of 2020 is an application for contempt at the instance of Birla Cable Limited one of the noticee companies in this proceeding. The company has alleged that although there was no direction for serving notice upon it on the contrary the defendants/petitioners were restrained from issuing notice upon the company without first hearing objection which was sought to be made by the learned counsel for the plaintiff. Therefore, this application is to be disposed of after hearing the alleged contemnors. Let a copy of this application be served upon the respondents. Alleged contemnor will be at liberty to mention for inclusion in the list. 128. At the outset of his argument Mr. Chinoy learned senior counsel appearing for Birla Corporation, a noticee company raises jurisdictional issue and submitted that since his client Birla Corporation Limited was not a party to the administration proceeding, this Court will refrain from exercising its jurisdiction as a Probate Court or Administrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the shareholding in various companies, trust and societies of M.P. Birla Group of Companies for being part of the controlling interest and controlling power vested in the estate of PDB by casting its vote at the ensuing Annual General Meeting (AGM) of Birla Corporation Limited on 13th August, 2019 through its Chairperson. 134. His main thrust of argument is that Priyamvada Devi Birla had only 1260 shares in Birla Corporation and as the plea of 'controlling interest' cannot exercise voting right over the entire shares held by the Company. It is his contention that there are 22 members of Birla Corporation and to this extent he has drawn attention of this Court to Annexure F at page 239 of affidavit-in-reply filed by Arvind Kumar Newar and further that even if Priyamvada Devi Birla had any controlling share, controlling group requires to file return and that not having been filed defendant/petitioner cannot claim any advantage under the Company Law in the name of controlling interest . He submits that the Company being not a party to the proceeding no order can be passed against it and in particular the Probate Court cannot extend its jurisdiction over anyone who was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . AIR 1953 SC 385; Howrah Trading Co. Ltd. v. CIT AIR 1959 SC 775; Balkrishan Gupta (supra) Vodafone International Holding BV (supra); Killick Nixon Ltd. v. Bank of India 1982 SCC Online Bom 57. 136. In Mothalone (supra) has laid down the law that even Court receiver was not entitled to the allotment of new shares in his own name. Referring to paragraph 32 of the decision Mr. Chinoy drew attention of this Court to the finding That privilege was conferred by section 105-C only on a person whose name was on the register of members. The receiver's name admittedly was not in the register and the company was not bound to entertain that application. He has also drawn attention to the passage The matter might have been different if the company was a party to the suit and was ordered by the court to register the receiver's name in place of Reddy for the 484 shares purchased by Sir Padampat and was also ordered to issue new shares in the name of the receiver. He pointed out that in this decision Court observed We are however quite clear that the company not having been impleaded in that suit, it was not bound to issue the now shares in the name of a person whos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effective between the transferor and transferee is not effective as against the Company and persons without notice of the transfer until the transfer is registered in the company's register. According to him until the transfer is registered in the books of the company the person whose name is found in the register alone is entitled to receive the dividends, notwithstanding that he has already parted with his interest in the shares. 142. He next relies on a decision in Vodafone International Holdings BV (supra) and submitted that a share represents a bundle of rights like right to (1) elect Directors, (2) vote on resolution of the company, (3) enjoy the profits of the company if and when dividend is declared or distributed, (4) share in the surplus, if any, on liquidation. He also reiterates that voting rights vests any persons only whose names in the Register of Members. 143. Mr. Chinoy next and last relies on Killick Nixon Ltd. (supra) and this decision, however, takes note of Mothalone (supra) and reiterates the same issue that The Company, however, recognises only the person who is its members as a share-holder. In other words, the rights that may exist between the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the order is a ploy to delay the hearing of the case. 147. G.A. 832 of 2020 has been filed by Birla Corporation questioning the jurisdiction of Probate Court to entertain G.A. 1735 of 2019 and they have also made a prayer to reject prayer C and D thereof. In view of the observation made in G.A. 831 of 2020, no further reason is required to be assigned in rejecting this application as the parties have already made their submission both on merit and jurisdiction which will be found from their written notes submitted. Therefore, this application is also disposed of with no orders. 148. C.C. No. 19 of 2020 is an application for contempt at the instance of Birla Corporation one of the noticee companies in this proceeding. The company has alleged that although there was no direction for serving notice upon it rather the defendants/petitioners were restrained from issuing notice upon the company without first hearing objection which was sought to be made by the learned counsel on behalf of the plaintiff. Therefore, this application is to be disposed of after hearing the alleged contemnors. Let a copy of this application be served upon the respondents. Alleged contemnor will be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... niruddha Bose (as His Lordship then was) is not binding upon this Court inasmuch as the Bench cannot be held to be a co-ordinate bench for the sole reason that the High Court Single Bench decided the matter as a statutory authority not as a Judge of this Court. Therefore, the issue decided therein is not binding on this Court. He submitted that in 2012 Administrators Pendente Lite were appointed but till date they were not able to take over possession of the assets and particularly when in the affidavit of assets entire estate has not been incorporated and that being so what has not been shown in the affidavit of assets cannot be claimed by APL to be part of the estate. 150. According to Mr. Bandopahdyay, a Probate Court only decides the issue whether will is genuine or not. His first submission is that if his client has no caveatable interest in the probate proceeding no notice can be given to it and even his client cannot be joined as a party in the probate proceeding. He submitted that since his client is not a party this Court's jurisdiction as a Probate Court cannot be extended over the stranger. This submission is common by all the three noticee companies like Mr. Bach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icated in paragraph 5 of the application. Since this Court has already observed that no order can be passed against stranger noticee company this application has become infructuous and more so this Court is of the opinion that no part of this submission made in Court has been omitted while recording the order dated 12th June, 2020. Purported attempt seeking correction of the order is a ploy to delay the hearing of the case. 157. C.C. No 18 of 2020 is an application for contempt at the instance of Vindhya Telelinks Limited one of the noticee companies in this proceeding. The company has alleged that although there was no direction for serving notice upon it rather the defendants/petitioners were restrained from issuing notice upon the company without first hearing objection which was sought to be made by the learned senior counsel on behalf of the plaintiff. Therefore, this application is to be disposed of after hearing the alleged contemnors. Let a copy of this application be served upon the respondents. Alleged contemnor will be at liberty to mention for inclusion in the list. 158. Since I have already held that noticee company being not a party to the proceeding no order ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e process of such smooth administration. Mr. Saha submits that the tenor of the order is amply clear that the APL which consists of two members respectively appointed by the plaintiffs and defendants and the third one was a retired Chief Justice of this Court and Bombay High Court so that no stalemate condition persists like the earlier occasion where the APL could not function years together. Therefore, it was Mr. Saha's contention that obviously the Court indicated that the APL should function jointly but in case of differences of opinion majority decision should prevail. According to him since the members are nominated by the parties there are high chances of differences of opinion between the two and unanimity can never be expected. 163. Mr. Saha contended that the two of the Joint Administrators adopted the resolution in question get support from the order of the Company Law Board dated 25-4-2005, order dated 24-8-2005 passed by one of the Hon'ble Single Judges of this Court, order dated 23-8-2012 passed by the Hon'ble Division Bench which appointed APL and the order dated 10-5-2013 by an Hon'ble Single Judge of this court and the order dated 11-10-2007 (or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t at any of the meetings of these companies, he will be nominated as the Chairman of the meeting. It was made clear that Justice Shah would not be accepting any remuneration for attending the meetings. The lawyers appearing on behalf of Mr. H.V. Lodha agreed to take requisite steps to complete the formalities for the nomination of Justice Shah as Director on the Tier I and Tier II Investment Companies by the end of May 2017. It was also agreed that the other members of the APL Committee, namely, Mr. A.C. Chakrabortti and Mr. M.K. Sharma, would continue to be Directors of the Tier I investment companies, where they had been previously appointed. In those cases, where Mr. A.C. Chakrabortti or Mr. M.K. Sharma, were not Directors in a specific Tier I or Tier II investment company, the Chairman would invite them to attend the meeting, as and when required. 166. Mr. Saha also drawn attention to the relevant portions of the minute dated 28-4-2019 which speaks of substitution of Justice Mohit S. Shah (retired) in place of A.P. Shah (Retd.) as Director of any Company. Relevant portions are set out below ( para 3 and 4): 3. There was a consensus at the meeting that all necessary step ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Mr. Mohit S. Shah, these objections are being raised which should not be accepted. Mr. Saha has also drawn attention of this Court to the provision of Section 89(10) and Section 90 of the Companies (Significant Beneficial Ownership) Rules, 2018 and Companies (Significant Beneficial Ownership) Rules, 2019 and submitted that the argument which was advanced on behalf of the Companies that unless someone's name is not on the Registrar of Companies he cannot have any voting right is not a correct proposition of law. He has referred to Rule 2(e) of the aforesaid Rules of 2018 Rule 2(e) set out below:- R.2(e) significant beneficial owner means an individual referred to in sub-section (1) of Section 90 (holding ultimate beneficial interest of not less than ten per cent.) read with sub-sectioon (10) of section 89, but whose name is not entered in the register of members of a company as the holder of such shares, and the term 'significant beneficial ownership' shall be construed accordingly; Explanation I. - For the purpose of this clause, the significant beneficial ownership, in case of persons other then individuals or natural persons, shall be determined as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eral appearing for Mr. M.K. Sharma one of the Administrators appointed by the Division Bench of this Hon'ble Court who gave descent, while countering the submission made by Mr. Saha in support of the majority view of the Administrators pointed out before this Court that the Administrators must act as Joint Administrator and they must act in one voice. Mr. Dutta submitted that members constituted body called administrators cannot be segregated so as to form a majority or minority view. According to him law demands that this body must give one decision jointly and if they cannot act together and failed to rule unanimity they should come before the Court for necessary direction and/or clarification. According to Mr. Dutta whenever any difference of opinion would arise in between the members of the administrators they should come before the Court and seek clarification and whatever the Court suggests they would act accordingly. In support of such contention Mr. Dutta has placed reliance on the following decisions: Lilavati Kirtilal Mehta Medical Trust v. Charu K. Mehta [2009] 2 Mah LJ 340; K. Leelavathy Bai v. P.V. Gangadharan [1999] 3 SCC 548 and Mahinder Singh Gill v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... papers, the APL Committee had decided to write to various shareholders to certain listed companies, being various companies, trust and societies. Letters were addressed on adverse dates last of which was on 8th July, 2013 by the APL Committee to the various shareholders. The purpose of the letters was, however, not to exercise any legal control over the affairs of those third parties. No control was ever sought to be exercised by reason of writing such letters. 2. That one of the trusts made objection and said that APL have no manner of control or say in respect of its affairs, assets and properties and it is guided by its own Trust Deed and Board of Trustees. 3. Shortly after being appointed, the APL Committee had requested the plaintiffs to hand over the share certificates in respect of the share held by the estate which ought to have been with Mr. R.S. Lodha, the Executor of the Estate and father of the plaintiffs. The request was complied with and thereafter the APL Committee applied for recording of their names as joint members representing the Estate of the deceased. This was, however, only in respect of the shares held in the name of PDB and nothing else. The APL Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench in order dated 23rd August, 2012 laid down powers of the administrators specifically referred to the APLs as Joint Administrators; the word 'joint' is used 19 times in the judgment. 10. APL Committee had never passed any direction to any of the listed companies to appoint any person as Director. The Nomination Committee of 3 nos. of companies had recommended to the Boards of Directors of such companies for appointment of Justice Karnik (Retd.) as an additional Director in the manner prescribed by law. Justice Karnik (Retd.) is not a nominee Director of the APL Committee and neither has he been appointed as such. The APL Committee also does not have right to nominate any Director on the Boards of these Companies by reason of any law or agreement and any contrary assertion is not correct. That shareholders of companies or administrators must act jointly unless law gives them the power to decide by majority. Joint Administrators are not allowed by the Succession Act to decide by majority. 176. Mr. Dutta has also referred to various provision of the Act which provides the manner of decision to be taken under those statutes. He submitted that in this statutes provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prehension expressed by either of the parties having interest over the estate of the deceased Court can suitably protect and preserve the status quo of the properties under the 'Will' and if necessary by issuing appropriate order of injunction of temporary nature during pendency of the Administration Proceeding. (v) The Indian Succession Act was a special law of testamentary succession and it created special forum of probate court to deal with all matters concerning therewith. A conjoint reading of a relevant provision in part IX indicates clearly that exclusive jurisdiction is vested in the special forum created under the Act for grant of probate and matters connected therewith. From the preamble to Indian Succession Act, 1925 it appears that this Act is the result of consolidation of as many as 12 acts. The purpose of consolidating statute is to present the whole body of statutory laws on a subject in a complete form repealing the former statutes. A consolidating statute never intends to alter the law, though it may not be a pure compilation of earlier enactments. This Act is a self-contained complete code in so far as the question of making an application for probate, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court was appointed initially and lastly Justice Mohit S. Shah, a retired Chief Justice of Calcutta and Bombay High Court. Administrator Pendenti Lite adopted various resolution and lastly on 19th July, 2019 and 30th July, 2019 in the interest of the estate so that the estate is preserved in its original form and it can be distributed to the rightful person. Since the Administrator Pendente Lite is under the immediate control of the court and its decision has not been implemented or could not be implemented by reason of objection by the nominee member of the plaintiff and while it is argued by the plaintiffs that the decision not being unanimous the plaintiffs are not inclined to implement the same the defendant/petitioner have come up with a prayer for a direction upon the parties to implement the decision of APL holding that the decision passed by the APL by majority is a good decision for all purpose and it should be carried out. 181. As discussed earlier and the decision cited by Mr. Mukherjee on this issue particularly the judgment dated 10th May, 2013 passed in APO NO. 154 of 2011 arising from CP No. 1 of 2020 an appeal from an order passed by the company Law Board (CLB) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olling interest over a huge shareholding of Vindhya Telelinks Limited. Paragraph 304 of the said judgment in Rajendra Singh Lodha (supra) the Division Bench observed The vastness of the estate is nothing but the controlling block of shares in the MP Birla Group of Companies, and in the facts and circumstances of the case, it does not call for an appointment of Administrator Pendente Lite 182. It has been rightly observed by APL that it stepped into the shares of Priyamvada Devi Birla (PDB) who stood as single individual Promoter. Therefore, as the single directing hand of the Promoter's group of shares in all of the companies and other institutions controlled by PDB, such controlling power by virtue of statutory devolution stood devolved upon the APL and consequently it can exercise all such powers as had been exercised by PDB during her lifetime. The view of APL gets approval of the decision of the Apex Court in Areclormittal Private Ltd. (supra) [(2019) 2 SCC 1] as relied on by Mr. Mukherjee. The ratio decided in the decision squarely covers the issue involved in this case on three prime words Management , Control and Promoter ; as held by the Apex Court the express ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to control the company. It is a well settled law, as held by the Supreme Court in World Wife Agencies (P.) Ltd. v. Mrs. Margaret T. Desor [1990] 67 Comp Cas 607, that on the death of a shareholder, the shares devolve on the legal hers instantaneously. Therefore, all her interest in the company and respondents Nos. 1-19 stood devolved on the legal heirs immediately on her demise. Who is the lawful legal heir is an issue before the Calcutta High Court. (4) In the said judgment it was however, held Thus I find that the estate of the Late Mrs. Birla, controlling majority of the shares in the company is intact and that the said estate has not brought about any change in the composition of the board of directors of the company. In other words, it is the estate of the late Mrs. Birla controlling majority shares in the company, which is found to be materially interested in the affairs of the company. Who is entitled to control the estate is an issue before the High Court for a decision. (5) R.S. Lodha (since deceased) died on 3rd October, 2008 and after his demise the present plaintiff no. 1 Mr. H.V. Lodha took the control of all the entities of the group as the alleged univ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trimental to the interest of the companies as a whole as the companies may be managed by minority shareholders and/or suffer at the hands of vested interest. We fail to understand the hesitation on the part of the appellants in permitting the Joint Administrators to approach the various companies of which the deceased owns and possess shares and stocks to get themselves recorded as representatives of the estate of the deceased appointed by the Court and to take all necessary steps to enjoy rights and privileges incidental to the ownership of the shares and stocks which consist controlling power in M.P. Birla Group of Companies and safeguard the interest of ultimate beneficiaries. This we say is necessary to for the administration of the estate by way of an equitable relief and in the larger interest of the ultimate beneficiaries. Further it is not going to cause any prejudice to the parties to the suit as they will have every right to approach the Court to seek appropriate direction or order in case the Joint Administrators deviate from the trust and faith reposed in them to enable them to exercise all the rights and powers of a General Administrator qua the estate of decease ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... locking shareholding with other groups of companies, the entire M.P. Birla Group of companies can in fact be controlled and managed by either by Lodha himself or his nominee. 188. Further this Court in its order dated 10th May, 2013 in Birla Education Trust (supra) by Justice Aniruddha Bose (as His Lordship then was) in APO No. 154 of 2011 arising out of A.C.O. No. 42 of 2011 arising out of C.P. No. 1 of 2010 filed against order dated 9th February, 2011 passed by Company Law Board has held (Annexure 'E' page 94 of G.A. 1735 of 2019) 3. The company in question was originally promoted by Late G.D. Birla, which subsequently came under the control of M.P. Birla group of companies, headed by Late M.P. Birla. On the death of M.P. Birla, his widow Priyamvada Devi Birla (PDB came to exercise control over 62.9 per cent of the shares of the company, which was held by different entities, over which, it appears to me at this stage, PDB had control. On her death there is dispute over succession of her estate and a probate proceeding is pending before this Court in respect of her Will, the legality of which is under challenge. Under the said Will, which is subject of the probate pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olding of the company. The Division bench of this Court has empowered the APLs to exercise all rights flowing from the ownership of the shares of PDB. It has also been submitted on behalf of the respondents that an inconsistent case is being run by the appellants as it has been pleaded in the main petition that Late M.P. Birla as also Priyamvada Debi Birla had transferred their properties including shares to five charitable trust. The jurisdiction to decide on this issue, thus, in my opinion, has largely shifted from the domain of CLB to the Probate Court and the Court for trial of suits. 189. Although, in the present case I have held that the three noticee companies are not amenable to the jurisdiction of the Probate Court for the present and no order of restraint, as prayed for by the defendants, can be passed against them but to deal with the submissions made by the noticee companies referring to various provisions of Company Law and also referred to by learned Advocate General for M.K. Sharma and Mr. Joy Saha for the two other Administrators and the plaintiffs as well that the probate Court's jurisdiction is very limited only to consider for the grant or refusal on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcise, or actual exercising of significant influence or control as defined in clause (27) of section 2 over the company (herein referred to as significant beneficial owner ) shall make a declaration to the company, specifying the nature of his interest and beneficial interest or rights and any change thereof, as may be prescribed: Provided that the Central Government may prescribed a class or classes of persons who shall not be required to make declaration under this sub-section. (2) Every company shall maintain a register of the interest declared by individuals under sub-section (1) and changes therein which shall include the name of individual, his date of birth, address, details of ownership in the company and such other details as may be prescribed. (3) The register maintained under sub-section (2) shall be open to inspection by any member of the company on payment of such fees as may be prescribed. (4) Every company shall file a return of significant beneficial owners of the company and changes therein with the Registrar containing names, addresses and other details as may be prescribed within such time, in such form and manner as may be prescribed. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding had controlling interest in all those manufacturing companies. This view has been confirmed by both Division and Single Bench of this Court and in view thereof APL Committee is well within its power to ask all entities which were under the control of PDB to exercise their voting right in regard to their investment in the share capital of any of the companies which were under the control of PDB, in the manner considered by the APL as beneficial to the interest of the Estate. All these entities of the group would have exercised their voting right in accordance with the directions of PDB had she been alive. Accordingly, now such entities would exercise voting right flowing from their investment in the companies controlled by PDB in the manner to be guided by the APL Committee. 193. Now let us consider whether in this case an interim order as sought for is at all necessary or not. Before an injunction is granted a question in dispute need not be examined or its decision anticipated. It is not important for the Court to consider while granting injunction whether suit will be dismissed or decreed and the Court is also not required to hold a mini trial but to decide whether the na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... members could not work smoothly and they had to resign due to non-cooperation from the end of plaintiffs in particular the plaintiff no. 1. Present independent member has been appointed in the year 2019 and, he is too obstructed to function smoothly. 200. In this case trial of the suit is at an advanced stage. Plaintiff no. 1 has been examined as propounder and his cross-examination by the defendants is about to be completed. Amongst others, Attesting witness may be examined shortly after Court's normal function is resume. Therefore, in order keep the estate in the safe hands of the administrators, some restraint should be imposed upon both the plaintiffs and defendants. The balance of convenience in this case is tilted in favour of grant interim protection. 201. Therefore, So far the three noticee companies are concerned, upon consideration of the submissions made by the learned counsels Mr. Kalyan Bandhopadhay, Mr. Bachawat and Mr. Chinoy this Court upon consideration of the ratio decided in West Bengal Housing Board (supra) cited by Mr. Bachawat, is of the firm view that for the present the noticee companies being not parties to this proceeding no order can be passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbefore at page 108, this application has become infructuous and accordingly disposed of. (2) G.A. 832 of 2020 - In view of the discussion and observation made hereinbefore at page 109, this application is also disposed of with no orders. (3) G.A. 833 of 2020 - In view of the discussion and observation made hereinbefore at page 113, this application is also disposed of. (4) G.A. 834 of 2020 - In view of the discussion and observation made hereinbefore at pages 98-99, this application stands disposed of to the effect that this Probate Court cannot decide any issue against a stranger to the probate proceeding and no order in this proceeding can be passed against this company. (5) G.A. 842 of 2020 - In view of the discussion and observation made hereinbefore at pages 108-109, this application becomes infructuous and accordingly disposed of. (6) G.A. 843 of 2020 - In view of the discussion and observation made hereinbefore at page 99, this Court holds that there has been no omission in my order dated 12th June, 2020. This application is disposed of with no orders. (7) G.A. 844 of 2020 - In view of the discussion and observation made hereinbefore at pages 113-114, this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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