TMI Blog2007 (10) TMI 705X X X X Extracts X X X X X X X X Extracts X X X X ..... eased to pass the following order: ...Hence I appoint joint Administrator, pendente lite, consisting of following persons (i) Mr. Hiranmoy Dutta, Bar-at-law of Bar Library Club; (ii) Promotha Nath Chatterjee, Learned Advocate of Bar Association, Room No. 1; (iii) Mr. Prabir Kumar Roy, ex-Sheriff of this Court of 10, N.S. Roy Road, Behala, Kolkata-700019; (iv) Mr. Sujit Bhattacharjee of 52-C; Ballygunge Circular Road, Kolkata - 700019, who shall take charge and control of all the shareholding of the deceased Lady in all the companies and they should function as could be functioned by under law by virtue of the controlling shareholding of all the Companies left behind by the said Lady. They shall take step for rectification of all the share registers of the Companies recording their names. They shall immediately make an enquiry as to the dealings of Lodha vis-a-vis dividends and investment of the dividends and submit a report to the Court and they shall place themselves in the Board of Directors wherever it is possible by virtue of the shareholding. They shall, in consultation with each other, decide to dissolve the Board if necessary under law for the benefit of the Companies, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2004 read out the said registered Will at Birla Park before the members of Birla family. On July 19, 2004, RSL filed the probate application before this Hon'ble Court being P.L.A. No. 204 of 2004.9. It further appears that a suit being C.S. No. 221 of 2004 was filed on August 17, 2004 by KKB, GPB and others claiming that MPB and PDB had left earlier Wills dated July 13, 1982 and the said two Wills are Mutual Wills. The claim in the plaint is that there is an irrevocable agreement between MPB and PDB that they would not revoke the said Wills. 10. On August 18, KKB and others filed a petition for probate of the alleged Will of MPB dated July 13, 1982 which has been marked as P.L.A. No. 241 of 2004. It is pointed out that the said petition was filed for probate 14 years after the death of MPB (i.e. in the year 1990). Another petition for probate was filed by GPB and others for probate of the alleged Will of PDB dated July 13, 1982 being P.L.A. No. 242 of 2004. 11. After the death of PDB, RSL, as Executor, took the charge of the Estate of PDB. The said fact is also admitted by the cavettos. RSL was allowed to manage and control the Estate of the deceased testatrix (PDB) as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts. I direct the profounder by his controlling share holding shall not move any resolution nor support any resolution aiming to sell, encumber any assets of the MPB Group of Companies nor closure thereof, without express leave of the Court. The profounder shall also, maintain status quo in relation to the other properties. 15. At the ad-interim stage the Hon'ble First Court held prima facie that: ...do not find any allegation of mismanagement, destruction and devastation of the Estate only an allegation has been made that a jute mill is sought to be closed and the same is sought to be shifted. Explanation has been given by Lodha in his separate application stating that for economic viability of the above jute mill the said decision was taken to shift mill at a different place as the existing site does not have any scope for expansion.... So, I think, keeping in view the interest of the group of companies on the one hand and to safeguard the interest of the Estate of the deceased lady on the other hand slightly regulatory measure is to be taken.... After hearing the parties the Hon'ble Court was pleased to pass an ad-interim order and further directed the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s power to appoint Administrators Pendente Lite. No specific guidelines are mentioned in the said section. Therefore, Courts have laid down the guideline through judgments. Mr. Mitra submitted that the principles for appointment of Administrators emerge from decided cases and the principles laid down therein are still undisputed. 19. Appointment of Administrator is analogous to that of appointment of Receiver and he pointed put that the said position has also been accepted by the Hon'ble First Court and he drew our attention to page 45 line 7 of the said judgment in this regard. Under Order 40 Rule 1 of the Code of Civil Procedure, the appointment of Receiver should not only be just but must also be convenient. 20. He further pointed out that the Respondents before the Hon'ble First Court relied upon the following judgments: AIR 1933 Bom 342 Pandurang Shamrao Laud and Ors. v. Dwarkadas Kalliandas and Ors.; AIR 1951 Mad 393 Adapala Subba Reddy and Anr. v. Adapala Andemma and Ors.; AIR 1952 Cal 418 Goods of Borendranath, Mitter Sudhindranath Mitter v. Arunendranath Mitter; 126 ITR 748 Mahamaya Dassi v. Commissioner of Income Tax, W.B. III; Williams on executors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the Court of Chancery would appoint a Receiver. The same principle was followed in the decision reported in (Supra) Bhuban Mohini Debi v. Kiran Bala Debi. 25. He further pointed out that the appointment of Administrators Pendente Lite under Section 247 of the Indian Succession Act the criteria of necessity is also to be fulfilled. Necessity of presentation of the Estate of the deceased testatrix is the more important criteria. Unless grounds for necessity are established, there is no jurisdiction to appoint Administrators. Reliance was placed upon the decision reported in Wjogendra Lal Chowdhury v. Atindra Lal Chowdhury) 13 CLJ 34 where the Hon'ble Court had held that whether there is anything against the Appellant personally which would necessitate the Court taking the Estate out of his hands. In the decision reported in 13 CLJ 47 (supra) the Court expects a necessity to be shown for the temporary grant namely, that there is something required to be done and there is no person empowered to do it. Therefore, the Court held that the necessity for the appointment of an administrator Pendente Lite has been clearly made out. 26. In the decision reported in 1866 LR 1P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... line 15 which is reproduced as hereunder: The Executor will not be displaced upon slight grounds, and a strong case must be made out to warrant the appointment of a Receiver where the Executor is willing to act. Where, however, the circumstances above mentioned exist, such as, would justify the appointment as against a trustee and where the abuse of trust is manifest, and it is plainly apparent that there has been serious waste and misappropriation of the funds, relief will be granted, especially is this true when the mismanagement is shown not in a single instance but from as habitual course of dealing, involving the property in danger. 31. The following judgments were cited on behalf of the Respondents: In the decision reported in AIR 1933 Bom 342 (supra) where the Court has held that before exercising its jurisdiction to grant Administrator Pendente Lite, it has also to be satisfied whether there is a necessity for such a grant has been made. It has been held in the said decision that each case must depend upon its own facts and upon the facts of that case, the appeal court came to the conclusion that no necessity for the appointment of an Administrator Pendente Lite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... text: In the decision reported in AIR 1956 Mad 409 (Kunjammal v. Malayappa Iyer and Anr.) the Court specifically held that: there is no authority for the position that whenever the Estate, or a large part of it consists of movable property and cash and the person, in possession of the Estate is a limited owner a Receiver should be appointed, it is not the law. There must be proof of a further fact, namely, that the conduct of the limited owner has been such as to raise a reasonable apprehension. We are unable to follow the seasoning of the learned Judge on which he finds that though no positive acts of waste or spoliation have been proved, there is room for reasonable apprehension of such waste or fraudulent secretion to the detriment of the reversionary. This finding is totally inconsistent with his earlier finding that there is no positive proof of any fraud, or waste. 37. In another decision reported in AIR 1995 Kant 258(F.C.S. Amalnathan and Ors. v. J.S. Victor Basco) it appears that ordinarily the desire of the testatrix as to who should administer her Estate and execute her Will, will have to be respected and an Executor appointed by the testator should no be r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nistrator Pendente Lite only over the shareholding in the M.P. Birla Group of Companies. 42. Mr. Mitra humbly raised the question of dichotomy and contended that when there was no necessity for appointment of Administrator Pendente Lite over the other assets, what was the necessity for appointment of Administrator Pendente Lite over the shares of PDB in M.P. Birla Group of Companies. No reason has been given in the judgment by the Hon'ble First Court for appointment of administrator Pendente Lite over a part of the Estate and continuing the named Executor to manage the remaining part of the Estate. It clearly reveals that the Hon'ble First Court did not consider RSL untrustworthy. There is no finding of waste, mismanagement or devastate in the judgment of the Hon'ble First Court in respect of the controlling block of shares over which Administrators were appointed, or for that matter in respect of any other part of the Estate. The Respondents in their cross objection have not taken any ground that allegation regarding mismanagement should have been upheld by the Learned Single Judge. 43. The following questions, therefore, fall for consideration in this appeal: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the probate proceedings and in the application for appointment of Administrator Pendente Lite. No notice of this application for appointment of Administrator Pendente Lite was given to the public shareholders by issuing a general notice through newspaper or otherwise. This is not a proceeding under Order 1 Rule 8 of the Code of Civil Procedure. Undoubtedly a large number of members of public will be affected by this appointment of Administrator pendente Lite. Even the companies who will be directly affected by the impugned order for appointment of Administrator Pendente Lite were not given notice. In short, the persons interested in proper management and well running of these companies have not been before the Court. It is also submitted that it would not be just in the facts and circumstances of this case to appoint Administrator Pendente Lite over block of shares in M.P. Birla Group of Companies. There has been failure of procedural justice and fairness. 46. Mr. Mitra drew our attention to page 3 of the judgment of the Hon'ble First Court and pointed out that His Lordship held as follows: Going by the prayer portions to the-applications made by the caveatrix, I t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Neither shareholders nor Directors have been empowered under the Companies Act to dissolve the Board of Directors. It can only be done by Company Law Board in proceedings under Section 397 and 398 read with Section 402 of the Companies Act. All the statutory provisions have been by-passed by the Hon'ble First Court. Although His Lordship held that the probate court has no jurisdiction to take over management and control of separate juristic bodies, even then have passed an order contrary thereto. The impugned order is without jurisdiction and contrary to principle of law as laid down by the Hon'ble First Court. The order for appointment of Administrator Pendente Lite over block of shares and directions given regarding management of the Companies should be set aside on this ground. The order of the Hon'ble First Court is contrary to law and, therefore, suffers from vice of error of law on the face of the judgment. 51. According to his further submission, no case of necessity for appointment of Administrator Pendente Lite over the part of Estate, namely controlling block of shares of PDB has been established and in absence thereof, the Hon'ble Court had no jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... safeguard the interest of the Estate of the deceased lady on the other hand slightly regulatory measure is to be taken…. 55. Therefore, the appointment of Administrator Pendent Lite over the controlling block of shares and intervention in running business are not at all justified. The grounds mentioned by the Hon'ble First Court in the judgment do not give rise to necessity for appointment of Administrator. Some of the grounds have got no factual basis and are dehorns the pleadings of the parties. The order is not supported by reasons and based on non-existent facts and, therefore, liable to be set aside. 56. Mr. Mitra further contended that even assuming the case of necessity is established, is it just or convenient to appoint Administrator Pendente Lite in view of nature of that part of the Estate over which Administrator Pendente Lite has been appointed, namely running the businesses which includes separate public listed companies with thousands o public shareholders and lenders? 57. There is not a single judgment cited by the Respondent cavettos where a Court has appointed Administrator over an Estate having interest in running business. On the contrary, in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. According to him, 14. AIR 1987 Cal 194 15. 1988 (1) CLT 61 there is no proceeding pending, nor any debt outstanding except a loan given by PDB to East India Investment Co. (P) Ltd., a company in which PDB is the major shareholder. The Estate is such that there is very little likelihood of any proceeding being initiated against the Estate or proceeding being filed by the Estate for collection of debts. Dividends by the companies and mutual funds are sent by cheques or automatic credit to bank through ECS. 61. The Hon'ble First Court further stated in the judgment that Lodha is a tainted person as because criminal proceeding has been instituted against him and his challenge in the criminal prosecution at the initial stage failed right upto Hon'ble Supreme Court. Mr. Mitra further pointed out that this criminal proceeding has been instituted at the behest of the Respondents which is clearly demonstrated and, therefore, they cannot take advantage thereof. This proceeding is not one instituted by the State and there is no FIR against RSL. Even, there is no allegation in the petition or in the Affidavit-in-reply that RSL is a tainted man and as such he should be removed an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeping control over the Executor during the pendency of the proceeding except by appointment of Administrator (see page 47 line 7 and page 52 line 14 of the impugned judgment). 63.2 Mr. Mitra said that this finding itself is contrary to what has been held in pages 56 and 57 of the judgment, where the Learned Judge held that RSL should have kept have kept the Court informed about the transmission of shares of PDB in the investment companies in his own name as Executor and that he should have also sought the direction from the Court with regard to discovery of all the movable and immovable properties of the deceased. This has already become a suit being Testamentary Suit No. 6 of 2004. RSL is the Plaintiff. All parties to the suit will be bound by any order passed in the suit and are under the control of the Court. The Court can always given directions to the parties to the suit. 64. According to Mr. Mitra, such findings are without any material and the pleadings. The Hon'ble First Court further held that the properties of MPB have got mixed up with the property of PDB and consequently Executor should be appointed to take control and management of the Estate of MPB (see pag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stment Companies transferred in his own name before filing of probate petition and before the completion of Shradh ceremony which would go to show that he was anxious to take control of all the Companies including other assets and properties (see page 55 of the impugned judgment). According to the Respondents, 99.84% of the Estate of PDB is comprised of these shares in the investment companies and through these investment companies the entire M.P. Birla Group of Companies are controlled. Therefore, RSL was under a duty and obligation as Executor to take control of the shares and transmission was applied for not in his personal name but as Executor to the Estate. The Court held that the shares of PDB in the investment companies transferred in his own name before filing of probate petition and before the completion of 'shardh' ceremony. 70. The said view is contrary according to Mr. Mitra since the Hon'ble First Court is of the view that the Executor should take immediate control of the Estate. Although the Hon'ble Judge held to the contrary which would be evident from the following passage of the decision as follows: …on the strength of the 1999 testament ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of assets or inventory petition. 74. It is also stated in the decision of the Hon'ble First Court that huge amounts are being divested by RSL in mutual investment company floated by RSL. Hence, Mr. Mitra contended that there are no pleadings, no documents, no arguments put forward before the Hon'ble First Court and it is factually incorrect. Mr. Pal, Learned Senior Advocate papering on behalf of the Respondents also accepted the said position and contended that no mutual investment company has ever been floated by RSL nor any part of the Estate of PDB invested in mutual fund by RSL. 75. According to the Hon'ble First Court, RSL was unmindful of his function as Executor as because he was busy appointing himself as Chairman of the Board of Directors of M.P. Birla Group of Companies (see page 57 of the impugned judgment). Mr. Mitra pointed out that there was no pleading, no argument, no document. On the contrary, RSL was already the Chairman of all the five investment companies since 1999. He was also the Co-Chairman of Birla Corporation Ltd., Universal Cables Ltd. and Vindhya Telelinks Ltd., the three main manufacturing companies of the Group. He was appointed Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meeting the cost and expenses of fighting the good numbers of litigation and specially the criminal prosecution in the High Court and in the Apex Court and whether the litigation expenses are being met out from the Estate or by the Executor from his own account is not known to Court. On this point Mr. Mitra submitted that it is neither pleaded nor argued before the Hon'ble First Court and he pointed out that RSL is also a man of independent means. However, this part of the judgment was also not supported by Mr. Pal, Learned Senior Advocate appearing on behalf of LDN during the course of hearing. In the year 2003-04, the share of profit of RSL from Lodha Co., Kolkata was ₹ 37.51 lakhs; there was a sum of ₹ 84.09 lakhs to the credit of his capital account and his drawings in that year from this firm was a sum of ₹ 22.56 lakhs. 80. Similarly, in the year 2003-04, the share of profit of RSL from Lodha Co., Mumbai was ₹ 76.15 lakhs; there was a sum of ₹ 89.05 lakhs to the credit of his capital account and his drawings in that year from this firm was a sum of ₹ 68.50 lakhs. So, the total drawings in the first year was more than ₹ 10C l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst RSL. RSL is not even a party to such proceeding. (e) The same applies to suppression of gold coins, Jewellery and artifacts etc. from the affidavit of assets. Not only is this factually incorrect and there is no question of any admission, but in fact RSL has included those items under proper prescribed heads in the affidavits of assets. Details are not required to be given in the affidavit of assets but the estimated values are to be given for court fees Maximum court fees have been given in this case. The Birlas have not given details of Jewellery, coins etc. in their affidavit of assets filed in connection with alleged Wills of 1982. Birlas have given ad hoc higher value of estimated ₹ 50 lakhs in order to complicate taxation matters of the Estate. RSL has given valuation as per Trial Balance of PDB maintained during her lifetime. 83. According to Mr. Mitra the judgment given on the basis of admitted facts in fact, are not admitted at all and thereby the entire judgment is vitiated. 84. The block of shares were held by PDB at the time of her death and the nature of the Estate is nothing but the block of shares held, by PDB in M.P. Birla Group of Companies. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the part of the Estate over which the Administrator Pendente Lite has been appointed is concerned with running business and any appointment of Court Officer over the controlling block of shares will tantamount to appointment over these companies; something which the Hon'ble First Court held that the probate court has no jurisdiction to do. In fact, during the hearing of the appeal, the Respondents by praying for appointment of Administrator Pendente Lite over that part of the Estate of PDB to act in accordance with law viz. Administrators over the shareholding of PDB, are in fact trying to achieve indirectly what they know cannot be achieved directly, viz. to have Administrators appointed over the M.P. Birla Group of Companies, if Administrators are appointed over and in respect of these shares with power to exercise voting rights in respect thereof, that would enable Court Officers to play with the fate of the Companies within M.P. Birla Group of Companies. It would show the appointment of Administrator over several running businesses having an employment force of 12,500 persons and a turn over of ₹ 1780.32/-crores. Even the news of appointment of Receiver over the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... panies during her life time and the Executor, RSL was inducted as a Director of several companies of the M.P. Birla Group of Companies curing the life time of PDB. 93. Mr. Mitra submitted summarizing the case of the Respondents/Birlas with regard to involvement of RSL with the management and affairs of the M.P. Birla Group of Companies is as follows: (i) RSL was involved in financial matters, of several Companies of the M.P. Birla Group even during the lifetime of MPB [see affidavit in support of Caveat para 15(d) to (f) page 154 vol. I of the Paper Book]. (ii) After the death of M.P. in 1990, PDB Supra 11 reposed complete trust and confidence in RSL in matters pertaining to all the financial affairs of Group as also concerning management of all the Companies [Affidavit in support of Caveat para 15 (g) page 155 vol. I). As a matter of fact RSL was appointed founder Trustee of M.P. Birla Foundation by MPB himself in 1986 [see on record at page 828 vol. Ill of the Paper Book]. (iii) PDB was at ail material times accustomed to act as per the wishes of RSL [see affidavit in support of Caveat para 15(g) 15(o) pages 155 to 156 Volume I of the paper Book]. (iv) RSL wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14.06.2004 Director Vol. II page 453 DATE OF APPOINTMENT OF RSL OFFICE TO WHICH APPOINTED IN MANUFACTURING COMPANIES, BEFORE JULY, 2004 (DEATH OF PDB) Serial Name of the Date Office Reference No. Company Paper Book 1 Birla Corporation Ltd. 12.06.1991 Director Vol. Ill page 641 23.04.1996 Advisor to Chairman Vol. Ill page 642 15.09.2001 Director/Co-Chairman Vol. Ill page 643 2 Hindustan Gum Chemicals Ltd. (Joint 16.07.1999 Director Supplementary Paper Book Page 175 venture with Rhodia of USA) 05.05.2004 Co-Chairman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d every Annual General Meeting of these Companies since the demise of PDB, RSL has been virtually and unanimously re-elected as the Director/Chairman wherever he was due for retirement and reappointment. Banks and Financial Institutions and also public shareholders have voted in support of RSL and have expressed their full trust and confidence in him. This would be further evident from the substantial increase in the price of shares of these publicly quoted companies. Particulars of such increase of share price is evident from the chart herein below: Name of the Company Share price as on 02.07.04 (Rs. ) Share price as on 02.01.07 (Rs. ) %of increase Vindhay Telelinks Ltd. 30.00 139.20 464 Birla Ericsson Opticals Ltd. 11.45 23.05 201.31 Unviersal Cables Ltd. 14.00 103.15 736.79 Birla Corporation Ltd. 99.95 334.85 335.02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e following Companies of the M.P. Birla Group of Companies since long and during the life time of PDB. He contended that RSL was a Director of 12 number of Companies of M.P. Birla Group of Companies during the life time of PDB. 102. Shri H.V. Lodha (hereinafter referred to as HVL ) became a Director of Birla Corporation Ltd. in the year 1996; then he became a Director of Universal cables Ltd. in the year 1998; in 2004 he became the Director of Punjab Produce Holdings Ltd.; in the year 2004 be became the Director of Vindhya Telelinks ltd.; in the year 2004 he became the Director of Mazbat Investments Pvt. Ltd.; thereafter he became a Director of Mazbat Properties Pvt. Ltd. in the year 2004; thereafter in the year 2004 he became a Director of The Punjab Produce Trading Co. Pvt. Ltd.; he became a Director of Gwalior Webbing Co. Pvt. Ltd. in the year 2004; he became a Director of Baroda Agents Trading Co. Pvt. Ltd. in the year 2004 and thereafter in the year 2004 he became a Director of East India Investments Co. Pvt. Ltd. 103. Shri S.N. Prasad (hereinafter referred to as SNP ) was a Director of Baroda Agents Trading Co. Pvt. Ltd. in the year 1988; then in the year 1995 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were all proved to be false. In page 59 of the impugned judgment, the Hon'ble First Court after close scrutiny had held that no mismanagement by RSL has surfaced and the business of M.P. Birla Group of Companies are not in 'serious' jeopardy in the hand of RSL. 109. The application filed by the Respondents/ Birlas is also liable to be dismissed on the ground that Respondents/Birlas have not approached the Court with clean hands. From their applications and affidavits it would be evident that they are trying to advance the cause of their respective businesses and not the M.P. Birla Group. They want to pave the way for weakening and disintegration of M.P. Birla Group and this would be evident from the following facts: (i) Birlas' grouse regarding rights, Issues of Birla Corporation Ltd. in 1999 and 2001 is only that their shareholding in the Company has come down. It is really their regret that the control of M.P. Birla Group of Companies over Birla Corporation Ltd. in creased substantially. (ii) Birlas by exercise of their majority shareholding in 2 Companies of the M.P. Birla Group of companies, namely, The Rameswara Jute Mills Ltd. and Jute Investment Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rge number of gold coins were found intact in the strong room at Madhu Kunj, Birla Park. (d) Appointment of Directors on the Board of directors of some of the Companies of M.P. Birla Group of Companies at the instance of RSL. Of those mentioned in the petition, most were appointed on the Board of the respective Companies during the life time of PDB. As to the independent Directors appointed after the demise of PDB, these are all independent Directors of high status and experience. (e) Mismanagement of M.P. Birla Group of Companies under the control of RSL. 111. Mr. Mitra further submitted that all these above allegations in the Administrator Pendente Lite petition were squarely dealt with by RSL in his dismissal petition appearing at page 436, vol. II of the paper book; Affidavit-of-Opposition appearing at page 763, vol. Ill of the paper book and supplementary affidavit appearing at page 1846, vol. VI of the paper book. 112. He further pointed out that realizing the apparent falsity and weakness in the allegations made in the Administrator petition, the Birlas through KNT in Reply running into around 900 pages, where the Birlas sought to run a completely new case, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1901-1907, vol. VI, Para 15 18, page 1851, vol. VI of the Paper Book). (f) Mr. Mitra further contended that performance of the cable companies belonging to the M.P. Birla Group of Companies were far behind that of their competitors. According to him, subsequently the performance of the Cable Companies of M.P. Birla Group of Companies has vastly improved and from loss making Companies, these have all become highly profitable, full particulars whereof have been given in the Supplementary affidavit (see pages 1914-1916, vol. VI of the Paper Book). (g) Constitution of Committee of Directors of Birla Corporation Ltd. so that RSL could exercise control over the Company. Mr. Mitra submitted that (i) Committee for Directors constituted during life time of PDB; (ii) Other Birla Companies have similar practice; (iii) permitted under Section 292 of the Companies Act. (h) Appointment of key officials in senior positions in Birla Corporation Ltd., Vindhya Telelinks Ltd. and Universal Cables Ltd. - Mr. Mitra submitted that the Appointees are highly qualified (full particulars appearing at page 1859, vol. VI of the Paper Book). No unworthy persons are appointed. Birlas want to inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. Manipulation of share price due to low liquidity Appearing at para 8(k) in the Affidavit-in-Reply 12. Inspection of records of Companies by third parties refused Appearing at para 33 in the Affidavit-in Reply and para 28 in the Petition SI. No. Grounds taken in the Administrator petition and Affidavit in Reply Reference 13. Constitution of Committee of Directors of BCL to make the Board defunct Appearing at para 15(g) in the Affidavit-in-Reply 14. Companies worked overtime to fabricate records Appearing at para 36 in the Affidavit-in-Reply 15. Appointment of key executive Appearing at para 18 in the Affidavit-in-Reply 16. Transfer of shares between Group Companies Appearing at para 12 in the Affidavit-in-Reply 17. RSL HVL shown as independent Directors Appear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds of Birla corporation Limited through PLC Securities Limited, a company controlled by RSL in Mutual Funds. (Dealt with at para 8.7 at page 59 of the Paper Book.) (vii) Transmission of shares of PB in five investment companies to RSL as Executor to the Estate of PB immediately after her demise. (Dealt with at para 8.8 at page 61 of the Paper Book.) (viii) Conduct of RSL in producing four keys in course of inventory by Special Officers and subsequent production of further keys, (dealt with para 8.9 at page 63 of the Paper Book.) (ix) Pendency of disciplinary proceeding against RSL before the Institute of Chartered Accounts as also pendency of criminal proceeding against RSL. (Dealt with at para 8.10 at page 65 of the Paper Book.) (x) Flexibility of Human mind as in possibility of RSL misconduct himself in future as Executor to the Estate. (Dealt with at para 8.11 at page 66 of the Paper Book.) (xi) Discretionary order - no interference called for. (Dealt with at para 8.12 at page 67 of the Paper Book.) 115. Mr. Mitra further contended that the vastness and complexity in itself cannot be a ground for appointment of Administrator. On the other hand, complexity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenge and it would be evident that RSL has been involved in running of the M.P. Birla Group supra 3 Supra 14 Supra 4 of Companies since 1991 and was the chosen successor of PDB to take over the reign of the business empire from her. 119. It would also be borne in mind that the M.P. Birla Group of companies are running profitably and the Birlas have not even alleged that these Companies are not being properly managed and it may be noted that the Estate is such that involves participation of third parties namely large block of outside shareholders who had admittedly reposed full faith and confidence on RSL by electing and re-electing him as Chairman of the Companies year after year by supporting all the resolutions proposed by him. Ouster of RSL and appointment of Court Administrator would be against the wishes of these shareholders who an not before this Hon'ble Court. 120. With regard to the serious challenge to the Will by the Birlas, Mr. Mitra, Mr. Shaktinath Mukherjee and others contended that the last Will and Codicil was prepared by Dr. V. Gourishankar, Learned Senior Advocate of the Hon'ble Supreme Court, according to the instruction of PDB and has been wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng personality and business acumen. 122. Mr. Mitra further contend that it cannot also be seriously contended by the Birlas or any other person that the Will was an unnatural Will. PDB's relationship with other members of Birla family as well as her brother KNT was not such as would lead to the inference that they should have been natural heirs of PDB. Significantly, the intestate heiresses of PDB namely RDM and LDN do not claim in their Affidavit in support of caveat that it would be natural for PDB to give her Estate to them or they would be her natural heirs. On the other hand, PDB's relationship with KNT and several male members of the Birla family was far from cordial. None of the male members of the Birla family were ever involved with PDB in running her businesses. Mr. Mitra drew our attention to the references in this connection, stated hereunder: (a) Letter dated September 19, 1985 of Ashok Birla (father of YB and only son of M.P. Birla's only brother Late Gajanan Birla) to MPB complaining that ...you have exhibited your intense bitterness towards me and your family.... I refer to the numerous occasions when you have condemned Uncle BK SKB and Auntie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it a seriously disputed document. Apart from the fact that by the said last Will and Codicil, earlier Will, if any, has been revoked, a few features of the alleged 1982 Will of PDB would go to show the apparent weakness in the case of the Birlas: 1. Unregistered Will. 2. Probate petition on the basis of a document which is apparently not the original of the said alleged Will. According to the Birlas, this alleged Will was kept in an envelope for the last 22 years which was to be opened after the demise of both PDB and MPB. When production of the envelope is asked for 2 weeks after the envelope was illegally opened, the Birlas however claimed that after the alleged Will was discovered they have not preserved the same, appearing at pages 3224 and 3227 of vol. X of the paperbook. 3. The Birlas case is that the alleged Wills of 1982 were under instructions of the couple to be probated after the death of both-however the first named Executor in MPB's alleged Will is PDB, and vice versa in PDB's alleged Will of 1982 where MPB is named as Executor; they are also legatees in each other's Wills - thus, the Birlas' case is absurd. No mention of this alleged W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as would be evident from the facts and materials placed before the Hon'ble Court. 129. He further urged before us that RSL is not in control of day to day management of the M.P. Birla Group of Companies and this contention was not raised before the Hon'ble First Court or in the Petition or in the Affidavit-in-Reply or even in the cross-objection. Hence, this contention has no substance. 130. He contended that PDB during her lifetime had allowed day to day affairs of M.P. Birla Group of Companies to be managed by Company Executives which would be evident from the will where it has been specifically stated that, to the extent have been exercising would mean the same pattern of management as followed by PDB should be continued. Therefore, the allegations made against RSL that he is acting with undue haste in taking control a few days the death of PDB is nothing but bald allegation. 131. The further allegation which has been made out that 1/5 undivided share of PDB in Kumaon Orchards included in the Affidavit of Assets. According to Mr. Mitra's submission, the application for amendment of the Affidavit of Assets made in December, 2004. The application was not o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He also drew our attention to Supplementary affidavit para 24 at page 1856 Vol. VI and Annexure L at pages 1981 1925 of Vol. VI of the Paper Book. 135. Mr. Mitra submitted that allegations made that Investment of the funds of Birla Corporation Ltd. through PLC Securities Ltd. - a company controlled by RSL in mutual funds. He pointed out that such investments in mutual funds through PSC Securities Ltd. has been continuing since prior to the demise of PDB at least since 1999. Birlas themselves have annexed Accounts Statements of such mutual funds, in vested through PLC Securities Ltd. during the lifetime of PDB. 136. None of those mutual funds are owned or controlled by RSL. There is no allegation that PLC Securities Ltd. realizing any extra benefit or any loss caused to Birla Corporation Ltd. in any manner. 137. He further pointed out that PDB used to invest most of her own surplus money in mutual funds which would be evident from the affidavit of assets annexed to the probate petition filed by Birlas as also the probate petition of RSL. Replacement of PLC Securities Ltd. by any other concern would amount to altering the system established and followed during the life tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te. 142. It is not the case of the Birlas that RSL has wrongly exercised the voting rights in respect of these shares or that RSL caused any loss to the Estate by exercising voting rights in respect of these shares. On the other hand it is a matter of record that performance of M.P. Birla Group of Companies has improved over the last years and this consequently bears testimony to the prudent exercise of voting rights in respect of these shares. 143. He further drew our attention to the decision reported in (2004) 7 SCC 505 (Commissioner, Jalandhar Division and Ors. v. Mohan Krishan Abrol and Anr. with Mohan Krishna Abrol v. State of Punjab) Where the Hon'ble Court held as follows: …a bare reading of Section 211 shows that the property vests in the Executors by virtue of the Will and not by virtue of the probate. Will gives property to the Executor; the grant of probate is only a method by which the law provides for establishing the Will. In the case of Kulwanta Bewa v. Karam Chand Soni it has been held that Section 211 provides that the Estate of the deceased vests in the Executor; that the vesting is not of the beneficial interest in the property; but only for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... X of the paper book. It is not the case of the Birlas that those keys were made over to the Special Officers on June 15, 2005 were useful for opening any unopened almirah or door. Mr. Mitra contended, such question or motive of RSL hiding these keys initially and handing them over to the Joint Special Officers later on does not arise. (f) The Birlas have not been able to show the disappearance of even one valuable item from Birla Park. Nine months after the death of PDB, the application for inventory was made in March, 2005. The scope of the petition was to inventories movable including small coins and Jewellery on allegation post inventory of any missing items. On the contrary, what was found by the Joint Special Officers in course of inventory in Birla Park, is much more than what the Birlas themselves has disclosed in the Affidavit of Assets to the probate petition filed by them being P.L.A. No. 242 of 2004. He further pointed out that there are two sets of security guards present at the Birla Park, one at the common entrance and the other at the entrance for the residence of PDB, KKB and BKB. There is no allegation of theft or removal of any valuables from PDB's resi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le for removal and replacement by an another human being in the shape of Administrator Pendente Lite. 149. Mr. Mitra further contended that the question is whether the Hon'ble First Court had any jurisdiction to appoint Administrator Pendente Lite when there was no ground of Administrator Pendente Lite has been made out by the Respondents. According to Mr. Mitra: (i) In the decision of (1990) Supp Sec 727 para 9 Wander Ltd. v. Antox India Pvt. Ltd. the Court held interlocutory remedy is to preserve status quo. By the impugned order/the status quo since the death of PDB will be drastically disturbed without any necessity and when ad-interim injunction restraining transfer and dealing with shares was adequate to preserve the controlling block of shares in status quo. (ii) Ignoring the settled principles of law and settled principle of law in the matter of Supra 24 appointment of Administrator Pendente Lite is (a) established act of mismanagement and waste by the executor and (b) necessity, which the cavettos failed to make out and (c) just and convenient - the Hon'ble First Court has failed to consider this important aspect viz. it is not just or convenient to appo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... First Court has exercised its discretion arbitrarily, perversely and ignoring settled principles of law which would be evident inter alia from the fact that the Learned Judge after coming to the conclusion on facts that RSL as Executor was not found to have mismanaged the Estate, thereafter proceeded to appoint Administrator Pendente Lite in a probate proceeding over and/or in respect of public limited Companies on the sole logic that human mind is flexible and accordingly what RSL may do in future in unknown. The Hon'ble First Court having held that the probate Court has no jurisdiction to take over management and control of separate juristic bodies, have passed an order contrary thereto. According to his own ratio, the impugned order is without jurisdiction and contrary to principle of law as laid down by the Hon'ble First Court. The order for appointment of Administrator Pendente Lite over block of shares and directions given regarding management of the Companies should be set aside on this ground alone. The order of the Hon'ble First Court is contrary to law and suffers from vice of error of law on the face of the judgment. xii. When the Hon'ble First Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned Advocate-General, appearing on behalf of the GPB submitted before us that for appointing Administrator pendente lite there should exist a bonafide dispute in relation to the pending probate application and it is necessary for such appointment having regard to the nature of the Estate. The Hon'ble First Court has exercised the discretion in appointing Administrator Pendente Lite. In appeal it is to be proved that such discretion is arbitrary, capricious or against the principle of law and he relied upon the decisions reported in (Supra) (1990) Supp. SCC 727 and (Supra) 13 CLJ 34 in this context and submitted that the Appeal Court should not interfere unless the Court was convinced that the discretion had not been fairly exercised. 154. He further submitted that the Hon'ble First Court found that there exists bonafide dispute arising out of serious challenge to the validity of the Will and Testament dated April, 18 1999. In these circumstance, the Court held that a tainted person should not be allowed to manage the Estate. The Hon'ble First Court further held that the challenge on the grounds of undue influence, existence of suspicious circumstances, lack of te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied by the Special Officers appointed by the Court which were also concealed by RSL. So, according to him, RSL prayed for probate of the real properties mentioned in the Codicil but did not include those in the affidavit of assets. Such act would indicate the personal interest of the Executor which prevail over the beneficial interest of the Estate and he relied upon the decisions reported in (11) 1948 All E R 271 (supra) and AIR 1933 Bom 342 (supra) in support of such contention and submitted that the Estate is of considerable value and extent, and for the safeguarding and preservation of it, proper arrangements is to be made especially when very wide discretionary powers have been given to the Executor under a Will. 159. He further pointed out that the Executor is the sole beneficiary under the Will. Relying on ten decision of 1930 PC. 24 Vellaswamy Servai and Ors. L. Sivaraman Servai he submitted that the consideration for appointment of Administrator Pendente Lite was that the Respondent, the profounder of the Will, is the principle beneficiary under the Will. He further submitted that an Executor is considered to be a fiduciary. Methods adopted to increase his control on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other safes and almirah were concealed and ad hoc valuation was given concealing those valuable assets for personal gain. Obviously, welfare of the Estate cannot be safe in the hands of the Executor and as such Administrator pendente Lite has been appointed in proper exercise of judicial discretion. 163. Learned Advocate-General further drew our attention to the fact that the is concealment of RSL took to falsehood and subterfuges. Unaccounted movable assets may easily be misappropriated. There is no explanation as to why the safe and such a huge number of boxes etc. had been lying empty. RSL never disclosed to court, which he should have done immediately after the filing of the probate application, as to why the existence of jewelleries, ivory, silver, artifacts, rare gold coins etc. as also empty containers found by Special Officers were kept concealed. Moreover, RSL never made any inventory of the jewelleries, gold coins, ivory, Silver, artifacts etc. after the death of PDB. The inventory made by the Special Officers cannot be compared with any other inventory. Therefore, he submitted that the finding of the jewelleries etc. could not be stated to have been kept intact and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim that the performance of RSL as a corporate leader has been remarkable and on the basis of such assertion the Cement Division of Birla Corporation did very well under his leadership. He further added that it would appear that the performance of the industries of which he was a Co-Chairman or a Board Member has been dismal except cement. 168. Hence, the Learned Advocate-General concluded that the derivative glory of brilliant performance of RSL is nothing but a myth. 169. Mr. S.B. Mookherjee, Learned Senior Advocate appearing on behalf of RDM (Radha Devi Mohatta) submitted before us that the principal point which has been argued before the Hon'ble Appellate Court that whether or not the Hon'ble First Court justified, in the facts and circumstances of the case, to appoint the Administrators Pendente Lite under Section 247 of the Indian Succession Act which provides that pending any suit touching the validity of the Will of a deceased person or for obtaining or revoking any probate or any grant of letters of administration, the Court may appoint an Administrator of the Estate of such deceased person, who shall have all the rights and powers of a general Administrato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h deceased person. The principal decisions that have been decided both in India and in England relating to an appointment of Administrator Pendente Lite is as follows: a) AIR 1933 Bom 342 (supra) b) AIR 1952 Cal 418 (supra) c) 1948 (1) All E R 271 (supra) 172. Mr. Mokherjee further submitted that the other reasons and grounds for appointment of Administrator Pendente Lite which are peculiar to the facts and circumstances of the instance case are as follows: a) Firstly, the nature of the Estate mainly comprises of the controlling block of shares held by the testatrix in various companies, through a complex interlocking structure. The testatrix held shares, inter alia in six investment companies. The said investment companies, in turn, control the majority or substantial shares in five manufacturing companies which included the flagship company, Birla Corporation Ltd. The right to control is also a valuable property and, therefore, the Administrator Pendente Lite should be appointed over the share holding of the testatrix in all the six investment companies including right to control all other companies of M.P. Group specified as annexure 'J' which was exer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o lacks in integrity as will appear, inter alia, from the following facts. i) In the Affidavit of Assets filed by RSL in his probate application, he had under declared the assets and properties of testatrix. ii) RSL did not disclose the value of testatrix's interest in Kumaon Orchards or the Provident Fund and Superannuation fund accumulations even though the same were reflected in the trial balance which according to RSL formed the basis of his affidavit of assets filed by him alongwith his probate application and relied upon by RSL in his opposition to the Administrator Pendente Lite application. iii) Attempt was made by RSL to conceal the assets and properties of testatrix by not disclosing the details of such assets even though he had prior knowledge of the same. iv) Even during the process of inventory being conducted at Birla Park by the Joint Special Officers, attempt was made by RSL to conceal the strong room in the residential premises of testatrix at Birla Park, Kolkata. v) RSL being the Executor of testatrix did not show the existence of the strong room in the sketch plan supplied by the representatives of RSL before the Joint Special Officers. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or appointment of Administrator Pendente Lite is lacking in particulars and cogent grounds have not been made out for the grant of such appointment. It is now well-settled that even if all the grounds are not to be found in the four corners of the petition but if such grounds appear from the subsequent affidavits filed on behalf of the parties then these may also be taken into account for the purpose of granting the relief claimed and he placed reliance upon the decisions reported in AIR 1966 Cal 512 (Ramsankar Prasad v. Sindri Iron Foundry Pvt. Ltd.) and AIR 1951 S.C. 177 (Firm Srinivas Rani Kumar v. Mahahir Prasad and Ors.) and submitted that the Hon'ble Supreme Court held that there would be nothing improper in giving the Plaintiff a decree upon the case which the Defendant himself makes. 174. Further reliance was placed on the decision reported in AIR 1952 S.C. 47 (Kedar Lal Seal and Anr. v. Hari Lal Seal) Contending that the Court would be slow to throw out a claim on a mere technicality of pleading when the substance of the thing is there and no prejudice is caused to the other side, however, clumsily or inartistically the plaint may be worded. He further contended tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew our attention to the decisions reported in AIR 1933 Bom 342 (supra); AIR 1952 Cal 418 (supra) and (1948) 1 ALL E R 271 (supra) and contended that necessity as such is not an independent principal which stands apart from he principles enunciated in the said decisions. He further pointed out that Section 247 of the said Act does not contain any prescription, nor indicate a pre-condition to be fulfilled before an order under the said Section can be passed. The use of word may strongly suggests so that the order should be passed at the discretion of the Court. Exercise of the discretion naturally would depend upon the Court's perception, based on the materials and facts brought to its notice, regardless of pleadings filed by the parties. A strict adversarial approach is not appropriate in testamentary matters for conscience of the Court has to be satisfied not only in the matter of granting a probate by removal of suspicious circumstances, but also in the matter of protection and preservation of the Estate even at the intermediary stage until the question of grant is finally decided either way. This idea is reinforced by the fact that an Administrator Pendente Lite be appointe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Act, may not be apparent in the short run. 181. The argument on behalf of the Appellant is that only 0.4 % of the estimated total value of the Estate discovered from the strong room of the deceased. It has also been urged on behalf of the Appellant that the Jewellery, coins etc. discovered from the strong room that the inventory made by the Special Officers confirmed that the contents of the strong room were intact. This argument, according to Mr. Mookherjee, is naive argument. 182. He drew our attention to the fact that by such inventory it cannot be said whether anything was missing or removed since the death of testatrix. The whole affair over the discovery of the Treasure Trove and conduct of RSL would show the dishonest conduct of RSL by itself is enough to discredit him as Executor to be trusted any further with the Estate. In fact, the biggest safe with combination lock inside the strong room when broke open was found to be totally empty (see page 2909, vol. IX of the paper book). Arguments advanced on behalf of RSL that the criminal cases were also been filed against RSL with regard to the improper and unprofessional conduct in the affairs of his running the busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and submitted that human mind is very flexible in nature. 185. Hence, according to his submission, the appeal should be dismissed and the order passed by the Hon'ble First Court should be affirmed. 186. Mr. Samaraditya pal, Learned Senior Advocate appearing on behalf of the Respondents No. 1 to 4 submitted before us that the proper approach should be to locate the focal points. For that purpose, the Court must consider the vastness of the Estate, and the nature of the Estate. It is not like usual cases e.g., immovable properties like land and building; movables of usual type like motor cars, furniture's, cash, Jewellery etc. but of a special type comprising antiques and coins of mourya age which are invaluable. Further, the shares of various companies of M.P. Birla Group and through the said share-holdings controlling of substantial industrial units, constitutes the true nature and represent the most Valuable constituent of the Estate. He also drew our attention to Clause 4 of the Will in question and submitted that the Will itself expressly refers to control. 187. According to Mr. Pal, the Indian Succession Act, 1925 (hereinafter referred to as the said Act of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de no attempt to collect the assists is gross dereliction of his duties (Section 319 of the said Act) in, inter alia, not accounting for or taking charge of the invaluable items of artifacts, ancient coins, Jewellery etc. at PDB's residene at 17B, Gurusaday Road, Kolkata although, as he says PDB handed over to him keys before leaving her home for the last time on her way to Belle Vue Clinic from where she never returned. 191. He further pointed out that the perception of threat is also a guiding factor when the destination of the Estate is, ex hypothesis unknown as of today since only the final decree in this probate suit (including all appellate stages) will determine. According to him, he may not act in his own interest when the sword of the Court in the form of application for Administrator Pendente Lite is hanging over the Executor. But it is reasonable to form the view when the sword is not there his acts and deeds may be guided by his self interest and not the interest of the Estate. This is so because the human mind can and is often too frail to withstand temporal temptations which is life's experience. According to the words of Justice Holmes, the life of the law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficult to conceive that the Court would permit a person accused of criminal breach of trust, when the allegations so made against RSL in the criminal complaint are found by the Hon'ble Supreme Court to disclose offence, to function in a fiduciary position akin to a trustee, to control and manage huge and vast Supra 24 Supra 25 Supra 33 Supra 35 Estate, comprising inter alia, manufacturing companies and valued at least ₹ 2500 Crores. 197. He further drew our attention to the order passed by the Company Law Board (hereinafter referred to as the CLB ) dated June, 28, 2006 and contended that the transmission of shares of PDB in different companies held not bonafide by the CLB. 198. He further placed his reliance upon the decisions reported in (7) 13 CLJ 47 (supra); 10 CLJ 263 (supra) and (5) AIR 1952 Cal 418 (supra) and submitted that on the basis of the principles laid down in the said decisions, the Hon'ble First Court found that the Estate is in medio and huge amounts invested in mutual investment companies of Lodha is a clear abuse and breach of fiduciary position in fact. According to Mr. Pal's further point of submission, although no mismanagement has su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that RSL was not aware of the same, was discovered. Three iron safes were found out of which the largest one in the strong room had to be broke open and was totally empty. From another iron safe Jewellery and gold ornaments were recovered. In the remaining iron safe nothing of significant value was found. Immensely valuable and rare ancient / medieval gold coins and some firearms were recovered from the steel almirah in the strong room. Various other valuable assets (including Jewellery, household goods, personal effects, artifacts, works of art, art collections, ivory items, gold and silver utensils, paintings, sculptures, furniture including gold plated furniture and other items) were found. 203. According to him, neither had the above-named assets been disclosed by RSL in the affidavit of assets nor had RSL taken any step to collect the same for safe custody. He submitted that the grounds of necessity would depend on the true implication or concept of necessity in the context of appointment of Administrator Pendente Lite and necessity arises by reason of cumulative factors. 204. He further pointed out the reliability and credibility of Execut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... breaking open of the locks of the safes, almirahs and the invaluable things found therein have already been stated which would show that RSL as the Executor has failed to perform his duty to collect the assets of the Estate of considerable value. The vastness of the Estate has no nexus or relationship the Appellant suggested. No authority has been cited and Mr. Pal further drew our attention to the decisions reported in (1948) 1 All ER 271 (supra); 126 ITR 748 (supra) AIR 1933 Bom 342 (supra) and AIR 1951 Mad 393 (supra) in support of his contention. 208. He further submitted that during the inventory the antiques and ancient coins were found out by the Special Officers. The items of ivory are of immense value and the gross undervaluation of the Estate in the affidavit of assets assumes critical importance and clearly undermines the credibility, reliability and integrity of RSL qua Executor and no confidence can be placed upon RSL to continue to be in sole and exclusive charge of the Estate under the impugned Will. Admittedly, the Estate comprises PDB's control through the shareholders and with such control one decides regarding the policies, accounts etc. If the Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sufficient, then the concept of Administrator Pendente Lite would be redundant. Court grants interim injunction till a better appraisal on affidavits. He submitted that when RSL is in control it would be impossible to discern whether the injunction is violated because he will find many ways of circumventing the injunction. Diversification of policies would defeat of injunction would only bind him and not his stooges through whom he can flout the injunction. 213 In answering to the argument that there were no subsequent event after the filing of the Administrator Pendente Lite application, Mr. Pal submitted that the Special Officers' discoveries were subsequent events and the impugned judgment proceeded not on the basis of wrong assumptions, but on the findings, those are as follows: a) Company proceeding before CLB were against companies and not RSL; b) Estate had not vested in charitable trust; c) There is no explanation regarding dividends; d) Source of funds for litigation expenses; and e) RSL does not have any mutual fund company. 214. The argument put forward by the Appellant that no Administrator Pendente Lite could be appointed over companies becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Senior Advocate appearing for KKB adopted the argument put forwarded by Mr. S.B. Mookherjee, Learned Senior Advocate and Mr. S. Pal, Learned Senior advocate. 216. In reply, Mr. Mitra pointed out that the allegation of sale of mutual land (Soorah Jute Mills) are incorrect and unfounded and the same were discussed at the meeting of the board of Directors on 25th July, 2001 (during PDB's lifetime). In respect of the Birlas, the decision was taken to sell idle plant and machineries during the lifetime of PDB due to poor financial performance. The decision was taken to sell the same in the meeting of the Board of Directors in the presence of PDB and finally approved the sell on June 15, 2004 to M/s Kalantry Textiles at a price of ₹ 12.85 crores. 217. The allegation was made that the cement worth ₹ 1 Crore was stolen from Birla Corporation Ltd. and such loss of cement was worth ₹ 15 lakhs - that too during the lifetime of PDB. total group turnover of ₹ 2000 crores -pilferage of cement worth ₹ 15 lakhs is insignificant Action taken against suspected persons, officers dismissed, FIR lodged and accused persons arrested. It is also submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition to collect the income arising out of the Estate nor in a position to enforce the claim of the Estate, (b) the Estate was in jeopardy, were considered by the Court of Appeal while appointing Administrator Pendente Lite. He further Submitted that it is not the case of the Birlas that RSL is unwilling or not in a position to take control of the Estate and the income arising out of the Estate or that the income arising out of the Estate is of such nature as would require appointment of Administrator. On the other hand, the Birlas Complained of haste in which RSL took possession of the 'most valuable asset'-viz. the controlling block of shares. 222. According to his further submission, in the decision of AIR 1952 Cal 418 (supra), a case of necessity was made out on existing facts which would be evident from paragraphs 24 to 29 of the judgment. Even there is not an allegation that amounts due to the Estate which are not being collected. There is no allegation of misuse of the funds of the Estate and/or inability of RSL to manage the Estate. 223. In an another decision reported in 126 ITR 748 (supra), according to him, it is not a case of appointment of Administrator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;ble first Court exercised its discretion arbitrarily, perversely and ignoring settled principles of law which is evident inter alia from the fact that the Learned Judge after coming to the conclusion on facts that RSL as Executor was not found to have mismanaged the Estate,- thereafter proceeded to appoint Administrator Pendente Lite in a probate proceeding over and/or in respect of the public limited companies on the sole logic that human mind is flexible and accordingly, what RSL might do in future is unknown. This is nothing but surmise and conjecture which has vitiated the judgment under appeal, as such this judgment of the Hon'ble Supreme Court is of assistance to RSL. It may also be noted that this was a case of passing-off where the interim injunction was refused by the Hon'ble First Court and granted by the Appeal Court. The Hon'ble Supreme Court did not restore the Trial Courts' order on the principle that the appeal court ought not to have interfered with the exercise of discretion by the Hon'ble First Court but after full re-assessment of the materials on record. 227. He further pointed out that the decisions reported in 1997 (2) CLJ 409 (supra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he High Court and thereafter in the Hon'ble Supreme Court. 232. In a petition under Section 482 of the Code of Criminal Procedure which is in the nature of a demurer application, facts alleged are taken to be true and the basis of a quashing petition is that the facts alleged even if taken to be true do not disclose any offence as against the Petitioner. Any other interpretation would lead to an absurdity. It the contention of the Birlas is that it has not been disputed before the Hon'ble Supreme Court by the Petitioner therein that in 1982, the couple had executed Mutual Wills and that the same is an admitted position, then the Birlas also have conceded that it is an equally admitted position that PDB had indeed executed her last Will in 1999 and bequeathed all her properties to RSL - it has been recorded in the same para of the judgment that PDB executed her last Will of 1999. On the other hand, the Birlas are disputing this very execution which is the subject matter of these probate proceeding. 233. In paragraph 25 of the said judgment, the submissions of the counsel of the Petitioner before the Hon'ble Supreme Court is recorded that the complainant's case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s whereof the Birlas' probate petitions have been filed should be treated as originals as these were allegedly duly executed and attested for the above proposition, this case was cited. In the said judgment the testator had signed the carbon copy in the presence of the attesting witnesses and the phrase true copy had been appended by the testator after signing the copy. 237. Therefore, according to him, no such case has been made out by the Birlas. Their case is that KNT had received a sealed envelope with a direction to open the same on the death of both MPB and PDB. Then, why the alleged envelope given by PDB to KNT should contain copies and not the originals of these alleged Wills, is an unanswered question, also unbelievable. KNT surprisingly did not preserve the alleged envelope even though this was opened and the alleged Wills taken out after the disputes had started with RSL. Khian Co. also were unable to give inspection of the alleged envelope a few days after it was opened at it was allegedly not preserved , after having been allegedly preserved for 22 long years since 1982 which is an incredulous statement and destroys the very case of the Birlas which seeks to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f doubt as to their correctness. In our Court, they have been followed and adopted by Sir Asutosh Mookherjee, J. in Brindaban Chandra Shaha v. Sureswar Shaha Paramanick (supra); in Bhuban Mohini Debi v. Kiranbala Devi (supra) and in 20 CWN 576 Promilabala v. Jyotindra. 244. In Brindaban Chandra Shaha v. Sureswar Shaha Paramanick (supra), His Lordship after referring Bellew v. Bellew (supra) observed that ...the Court of probate would grant administrator pendente lite in all cases where necessity for the grant is made out Therefore, the question is, what is the necessity and the test for it. 245. In the case of Borendranath Mitter Surendranath Mitter v. Arunendranath Mitter (supra), the Court also specifically speaks about the same principle and further held that the reason of the thing seems to be this that though a man makes a Will and appoints an executor, yet if the executor be under any incapacity or disability of acting as such, during his incapacity, in many respects there is no executor and, therefore, for that time it is considered as a necessity. 246. We have also been able to find out that the Court of Chancery appoints the Receiver where the property as is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the caveatrix I think prayer for appointment of the Administrator Supra 5 Supra 7 in terms of Prayer 'B' Cannot be considered for if granted, that amount to taking over of management control of separate juristic bodies by the probate Court as it has no jurisdiction to do. However, the prayer for Administrator Pendente Lite, in terms of prayer (a) (hereinafter in short APL) can be considered. 250. Mr. Mitra submitted before us that the said two Prayers are identical. According to him, if Prayer (b) is refused, then Prayer (9a) cannot be granted. We shall deal with that submission subsequently but before that we have to find out the grounds on which the Court came to the conclusion and appointed the administrator pendente lite in the matter. 251. It appears that His Lordship summarised the allegations and counter-allegations in the judgment and found out that the purported Will propounded by the Executor RSL is a manufactured and procured document. Similarly, the codicil relied upon and propounded by the Executor is also manufactured and procured. The genuineness of the aforesaid two testamentary documents have been seriously challenged. His Lordship also found that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of time none of the Executors of MPB came forward or objected to or applied for probate of the said Will of MPB. It is also to be noted as pointed out by Mr. Mitra that the lady inherited those properties and acted accordingly, which would give an impression that there was no Will which was executed at the time of death of MPB and he did not leave any last Will and testament and also there is no document to show that ever during the lifetime of PDB, any of the Birlas or their family members ever whispered about the said mutual Wills. 258. It further appears from the submissions as pointed out by Learned Counsel for the parties that in view of the execution of the two said mutual Wills, a separate suit for specific performance has been filed and the same is pending for adjudication. We have also informed that the said suit is ready for hearing. 259. The further allegation that has been made is that RSL deliberately suppressed the real value of the Estate and as it would be evident from the submissions made before us by the Learned Counsel appearing for the parties and the documents placed before us and/or relied upon by the parties including the applications so filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Will as executor whose appointment is not questioned and who can discharge the functions of an administrator pendente lite. 264. We also cannot brush aside the opinion expressed by His Lordship when His Lordship has specifically came to the conclusion that it is true at the present moment that mismanagement by Lodha has not surfaced the business of M.P. Birla Group of Companies and cannot be apparently put in perilous condition and not in serious jeopardy in the hands of Lodha. 265. Even coming to such conclusion His Lordship held that wherefrom he is meeting the costs and expenses to contest the good number of litigations. It has to be taken into account that such question not even pleaded or urged before the Court by the Learned Counsel for the parties. 266. Therefore, with utmost respect to His Lordship, we hold that His Lordship came to the conclusion without any pleadings and documents. Therefore, in our opinion, such finding of His Lordship is nothing but a hypothetical assumption and has to be set aside and hence, cannot be created as a ground for appointment of administrator Pendente Lite. 267. It further appears that His Lordship also relied upon the alle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore us, we are of the considered opinion that the Hon'ble First Court should not have declared RSL as a tainted person. 272. Hence, with respect to His Lordship, we hold that such finding of His Lordship is contrary to law since the proceedings have not yet been over, nor decided by any competent Court of law and, therefore, at this stage such opinion by he Probate Court should not have been expressed on such materials and accordingly we disagree with the opinion of His Lordship and cannot at this stage declare RSL as a tainted person. Therefore, it cannot support the claim for appointment of administrator. 273. His Lordship further came to the conclusion that the Will of 1999 and the Codicil are seriously challenged inter alia on the ground of undue influences, undue influences and the same were executed in the suspicious circumstances and further lack to testamentary capacity of the testatrix and His Lordship particularised that these are not bare allegations. 274. Mr. Mitra and Mr. Mukherjee alongwith others appearing for the Appellant pointed out before us that the Hon'ble First Court did not pass any order appointing Administrator over the valuable movable ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Companies within the said Group. All these four manufacturing Companies are listed Companies and the shares are held by the Members of public and none of the Companies are before the probate Court or parties to the application for appointment of Administrator Pendente Lite. 279. It is also a fact that no notice of this application was given to the public shareholders by issuing a general notice and, therefore, in our opinion, the submissions as made before us a large number of Members of public will be affected by such appointment. 280. Therefore, we cannot have any doubt in our mind that without giving such notice to the shareholders in the probate proceedings, the Court has no power to appoint Administrator Pendente Lite over the said block of shares and after perusing the materials on record, we have not been able to find out any document which would suggest or can act in favour of such appointment on the controlling block of shares Merely for the purpose of taking over the possession and control over the Companies the Probate Court, cannot appoint Administrator Pendent Lite to Preserve such shares. 281. Hence, in our opinion, the order of injunction so passed at the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de the said order of appointment of Administrator Pendente Lite over the controlling block of shares of the said Companies of M.P. Birla Group and also the directions as given by His Lordship. 287. It is true that under Section 247 of the Indian Succession Act, no specific guidelines have been mentioned in the said section and Courts, from time to time, have laid down the guidelines through judgments. Such Principles of law as has been stated before us cannot be disputed since we feel that it is settled law. The appointment of Administrator is analogous to that of an appointment of Receiver and after perusing and analyzing the cases cited before us by the Learned Counsel for the parties, we must come to the conclusion that the matter of appointment of administrator pendente lite under Section 247 of the said Act, the main criteria is nothing but necessity, necessity to preserve the Estate of the deceased. 288. It is an admitted fact that if all grounds go, even then if the Court finds that for preservation of the Estate, appointment of an Administrator Pendente Lite is necessary, then the Court would have power to appoint an Administrator and, in our opinion, case of necessit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts, payment of interest or the dividends of shares as they become due and that no fit and proper person is in a possession to discharge these Offices. 293. Therefore, it is settled law that there must be some grounds and /or materials to be placed before the Court which can be treated as a tools in the hands of Court fulfilling the test of the necessity and then and then only the probate Court can exercise its discretion to appoint an Administrator. 294. Hence, we are of the considered opinion that there is no finding of waste and mismanagement or siphoning out of money, dilution of properties by the named Executor and we have also not been able to find out reason in the impugned judgment which can satisfy our conscience that why His Lordship was pleased to appoint Administrator Pendente Lite over a part of the Estate that is the controlling block of shares and allowed the Executor to manage the remaining part of the Estate e.g. valuable movable assets, Jewellery, gold coins etc. 295. The Hon'ble First Court observed that the dividend income of the Estate and mode of utilisation has not been disclosed to the Court. This fact was never stated in the petition by the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to collect these assets. 302. We have also been able to find out from the facts and the materials on record placed before us that the Birlas by virtue of their majority share holding in two Companies of the M.P. Birla Group namely, Rameshwara Jute Mills Ltd. and Jute Investment Co. had taken over the control of the said company in September, 2005 and further Indian Smelting Refining Co. Ltd. also has been taken out of the fold of the M.P. Birla Group of Companies. 303. Hence, the Respondents have failed to make out a case for appointment of Administrator Pendente Lite when no mismanagement has been found out by the Hon'ble First Court and the business of the M.P. Birla Group of Companies as specifically held by His Lordship are not in serious jeopardy in the hands of RSL. We do not find that the Respondents have been able to make out a case thereof. 304. After scrutinizing the facts and circumstances of the case and analyzing the decisions cited before us and perusing the materials on record we have to come to the conclusion that the vastness of the Estate is nothing but the controlling block of shares in the M.P. Birla Group of Companies, and in the facts and cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 18, 1996 and December 19, 1998 (appearing at pages 699 and 7T7 of vol. 3 of the paper book); the removal of KNT from the Trust/Societies and the particulars for which has also been adverted to by Mr. Mitra and Mr. Mukherjee, appearing at page 696 of Vol. 3 of the Paper Book. 306. The Hon'ble First Court also has come to conclusion that the Estate is in medio , but we find that no such pleading made out in the petition and, in our considered opinion, the Court cannot travel beyond the pleadings which has been specifically stated by he Apex Court and the Court cannot make out a third case which has not been made out by the parties. 307. Therefore, on that question also, after considering the facts and circumstances of the case and the materials on record placed before us. We have to come to the conclusion, with utmost respect to His Lordship, that His Lordship has mis-appreciated the fact and held that the Estate is in medio . Such conclusion of His Lordship, in our opinion, cannot be sustainable in the eye of law in the facts and circumstances of this case. 308. The further question that whether the Court has jurisdiction to apply discretion in the facts and circums ..... X X X X Extracts X X X X X X X X Extracts X X X X
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