Court upholds Administrator pendente lite Committee's authority under Section 247, orders affidavits, sets final hearing.

UNIVERSAL CABLES LIMITED, BIRLA CABLE LTD., VINDHYA TELELINKS LTD., BIRLA CORPORATION LIMITED, SHREYAS MEDICAL SOCIETY Versus ARVIND KUMAR NEWAR AND ORS.

UNIVERSAL CABLES LIMITED, BIRLA CABLE LTD., VINDHYA TELELINKS LTD., BIRLA CORPORATION LIMITED, SHREYAS MEDICAL SOCIETY Versus ARVIND KUMAR NEWAR AND ORS. ... Issues Involved:

1. Jurisdiction and authority of the Administrator pendente lite Committee (APLC).
2. Impact of the impugned order on the appellants' companies under the Companies Act, 2013.
3. Membership and authority of Harsh Vardhan Lodha (HVL) in the companies and society.
4. Compliance with the impugned order and its implications on the companies.
5. Allegations of jurisdictional overreach and misapplication of law by the trial court.
6. Legal precedents relevant to testamentary jurisdiction and company law.
7. Arguments by the defendants in support of the impugned order.
8. Determination of interim relief and stay of the impugned order.

Issue-wise Detailed Analysis:

1. Jurisdiction and Authority of the APLC:
The appellants challenged the directions given in the impugned order, arguing that the APLC had been given superlative authority over the appellants' companies, which contravenes the Companies Act, 2013. They contended that the APLC's decisions dated July 19, 2019, and July 30, 2019, should not override the statutory position of the Board of Directors and shareholders' voting rights. The court noted that the APLC represents the estate of the deceased for all purposes except distribution and acts under the probate court's direction, as per Section 247 of the Indian Succession Act.

2. Impact on Appellants' Companies:
The appellants argued that the impugned order disabled them from acting in accordance with the Companies Act, 2013, and undermined the authority of the Board of Directors and shareholders. They highlighted that the APLC's decisions interfered with the companies' management and voting rights. The court recognized the fundamental principle that shareholding and voting rights are regulated by Sections 47 and 88 of the Companies Act, 2013, and that controlling interest is an incident of holding majority shares.

3. Membership and Authority of HVL:
The society argued that PDB's membership ceased upon her death and that HVL was neither a trustee nor part of the managing committee. The appellants contended that HVL had been a director in his individual capacity and became the elected Chairman since 2007-2010. The court noted that the impugned order restricted HVL from holding any office in the M P Birla Group entities during the pendency of the suit, based on shares referable to PDB's estate.

4. Compliance with the Impugned Order:
The appellants produced emails from the APLC seeking compliance with the impugned order and urged for an interim stay to protect the companies' operations. The court acknowledged the appellants' concerns but emphasized that the APLC's power to control and administer PDB's estate had been repeatedly asserted through judicial orders.

5. Allegations of Jurisdictional Overreach:
The appellants argued that the trial court's order suffered from inherent lack of jurisdiction, non-application of mind, and misconception of law. They contended that the probate court could not issue orders affecting non-defendant companies and that the APLC could not interfere with the companies' affairs beyond the estate's shareholding. The court examined the impugned order and found it within the probate court's jurisdiction under Section 247 of the Indian Succession Act.

6. Legal Precedents:
The appellants referred to several legal precedents, including Priyamvada Devi Birla vs. Ajay Kumar Newar, Shashi Prakash Khemka vs. NEPC India Ltd., and Bacha F Guzdar vs. Commissioner of Income Tax, to support their contentions. The court noted these precedents but deferred detailed consideration to the final hearing of the applications and appeals.

7. Arguments by Defendants:
The defendants argued that HVL had acted against PDB's estate's interest and that the impugned order was necessary to preserve the estate. They contended that the probate court's jurisdiction under Section 247 of the Succession Act was appropriate and that the impugned order should not be stayed. The court considered these arguments and found no reason to issue an interim stay.

8. Determination of Interim Relief:
The court declined the prayer for an interim stay of the impugned order, noting that the order reflected judicial consideration and determination within the probate court's jurisdiction. The court clarified that the word 'implement' in the impugned order meant 'abide by' and restricted HVL from holding office in the M P Birla Group entities based on shares referable to PDB's estate.

Conclusion:
The court declined to stay the impugned order, emphasizing the APLC's authority under Section 247 of the Indian Succession Act and the need to preserve PDB's estate's interests. The court directed the filing of affidavits and set the matter for final hearing, keeping all issues open for further consideration.