- (1.) These three appeals filed under Section 10F of the Companies Act, 1956 are being taken up together as similar questions of law and near identical factual issues are involved these appeals. These appeals are directed against an order of the Company Law Board (the CLB) passed on 22 July 2009. This order is in the nature of an interim order passed in an interlocutory application taken out in a pending proceeding under Sections 397, 398, 402, 403 and 406 of the Companies Act, (the Act) against Birla Corporation Limited whom I shall henceforth describe as "The Company". The application, which was registered as C.P. No. 57 of 2004 was filed by five shareholders of the company in or about 14 September 2004. In that application, Rameshwara Jute Mills Co. Ltd., (RJM), who are the appellants in A.P.O.T. No. 292 of 2009 were originally impleaded as one of the respondents. In C.P. No. 57 of 2004, which I shall describe in the later part of this judgment as the original petition, altogether 34 individuals, corporate entities and institutions have been impleaded as respondents. The first respondent is the company itself. The respondent no.2, Rajendra Singh Lodha (since deceased) had been described in the original petition as the principal person in control of the company and its management and affairs. The process through which such control was sought to be exercised was questioned in the original petition. The Respondent No. 3, Harsh Vardhan Lodha (HVL) is his son, as also a Director of the Company, whereas respondent Nos. 4 to 8 are its directors. The respondent Nos. 9 to 27 are different companies, and it appears that these companies own and control substantial number of shares of the company. The respondent Nos. 28 to 34 are charitable institutions also owning shares in the company. The main prayer of the applicants in the original application was to restrain respondent Nos. 2, 3, 7 & 8 therein from participating in the affairs of the company and also for restraining respondent Nos. 9 to 34 from exercising any voting rights in the company. In substance, it is alleged in the original petition that the respondent No. 2 therein (RSL) and his supporters were indulging in acts to bring about a change in the controlling interest of the company, and such acts were oppressive, and prejudicial to the interest of the company and its shareholders. It has been submitted before me on behalf of the company that a petition has been moved for dismissal of this proceeding before the CLB on or about 15 October 2004, but this petition is still pending for final adjudication.
(2.) This company was incorporated in the year 1919 and was part of an industrial house commonly known as the "Birlas" Birla being the surname of the family promoting the company along with various other industrial units. It is also not much in dispute that the companies, as well as its corporate shareholders mostly belonged to a branch of the Birla family, known as the M.P. Birla group, named after Madhav Prasad Birla (since deceased). On his death, it has been averred in the original petition, Priyamvada Devi Birla (PBD), being the widow of late Madhav Prasad Birla had controlling interest in this company through various companies and institutions who have been impleaded as the respondents therein. PDB died on 3 July 2004. In the audited balance sheet of March 2004, the promoters' stake in the company was shown to be 66.22%, though PDB herself owned only 1260 shares in the company. At the time of her death, it has been pleaded in the original petition, she had control over 62.9% of the total paid up capital of the company.
(3.) On her death, dispute arose over succession of her estate, and several proceedings were taken out in connection with a will executed by her, the validity of which, however, was strongly disputed by the members of the different branches of the Birla family. RSL (since deceased) was the pro-pounder of this will, and it appears that he was named as the executor as well as the principal beneficiary in the said will. Several orders have been passed in connection with these proceedings, which were instituted and are being continued in this Court in its Testamentary jurisdiction.;