TaxTMI 
TaxTMI 
2016 (5) TMI 983
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.... Bhattacharya, J. This testamentary suit springs out of an application for grant of probate filed by the predecessor-in-interest of the present plaintiffs who, as executor and/or propounder applied for grant of probate of the Will published by one Priyamvada Devi Birla in short P.D.B on 18th April, 1999 along with the codicil dated 15th April, 2003 to the said Will. During the pendency of the probate proceeding the executor, namely, Rajendra Singh Lodha in short R.S.L died and after his death his legal heirs were substituted in the place of the said deceased executor and the said proceeding was converted into a proceeding for grant of letters of administration at the instance of the Present plaintiffs being the legatees under the said Will. In an appeal arising out of an order passed by the Probate Court, a three member committee of administrators pendente lite (hereinafter referred to as 'APL') was appointed over the estate of the late Priyamvada Devi Birla. Out of these three members of the APL, one was nominated by the Lodhas, namely, Mahendra Kumar Sharma another was appointed as a nominee of A.K. Newar and others, namely, Amal Chandra Chakraborty and apart from them a fo....
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....at even this Hon'ble Court while appointing a committee of 'APL' on 23rd August, 2012 made it clear irresistibly, expressly or impliedly that any major policy decision affecting the interest can be taken by this Hon'ble Court through the Committee of 'APL' as constituted by this Court. In this background two applications being G.A 508 of 2016 & GA 189 of 2016 were filed by two sets of defendants seeking leave of this Court to serve a copy of the said application on Birla Corporation Limited in order to bring the clear picture regarding such proposed transaction on record and for this purpose a mandatory injunction for issuance of direction upon Harsh Vardhan Lodha and/or Birla Corporation Limited to produce the due diligence report conducted, if any and all other relevant papers and documents referred to in pages 41 and 59 of this application prior to Birla Corporation Limited acquiring cement businesses of Reliance Infrastructure. Injunction is also sought for restraining the Harsh Vardhan Lodha from causing Birla Corporation Limited from acquiring some of the business of Reliance Infrastructure limited and two cement units of Lafarge India, so that status quo in respect of suc....
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....g maintainability of the defendants' said application with reference to the averments made in the defendants' said applications. He contended that the instant application filed by the defendants is not maintainable as it does not disclose any cause of action for filing such applications. By referring to various paragraphs of the said applications, Mr. Mitra pointed out that the entire reliefs claimed in the said applications are based on certain information collected by the applicants from various newspapers reporting which they claimed in their affidavits to be the information derived by them from records. Mr. Mitra referred to various judicial pronouncements of the Hon'ble Apex Court to support his contention that newspaper reportings per se are not admissible in evidence and, as such, the Court should not take note of such inadmissible evidence while considering the appellant's said applications. In support of his submission that the newspaper reportings are not admissible in evidence as these are all hear say evidence, he has relied upon the following decisions of the Hon'ble Supreme Court:- (i) In the case of Lakxmi Raj Shetty & Anr. Vs. State of Tamil Nadu reported i....
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....e time of execution of the Will and there was no suspicions circumstance which might have influenced the testator to execute the Will then the testamentary Court will have to grant probate to the said Will. He further contended that while dealing with a testamentary suit, the Court has no jurisdiction to decide any dispute relating to the title of the testator in the property, bequeathed under the Will. Thus the business of the Testamentary Court is very restricted. The Probate court has no jurisdiction to decide any foreign issue. According to Mr. Mitra, the issue which is raised in this application is absolutely a foreign issue so far as the testamentary suit is concerned as grant of reliefs claimed in this application depends upon determination of various issues relating to the business management of a company registered under the Companies Act which authorizes the Company Law Board only to resolve such dispute. He elaborated his aforesaid submission by contending that under the Companies Act a company cannot be the asset of the estate belonging to deceased and the shareholders of a company has no interest in the asset of the company even though the shareholders have inter....
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....lling or substantial stake in another company is vested exclusively with the Board of Director of the company and the company Act has not vested any jurisdiction upon the shareholders of the said company to interfere with the decisions of the Board of Directors in this regard. He thus, contended that if the shareholders of the company has no say in the matter of taking any decision by the Board of Directors of a company in taking over another company or acquiring or controlling the substantial stake in another company then this court sitting in this jurisdiction, also cannot interfere with the jurisdiction of the Board of Directors of the company in taking over another company or in acquiring and controlling the substantial stake in another company. He, also contended that the powers of the Board of directors is not uncontrolled as the companies Act has imposed certain restriction on exercise of the power by the Board of Directors in Section 180 of the companies Act. But since the applicants do not complain of violation of any of the provisions contained in Section 180 of the Companies Act relating to the management of the assets of the said company by the Board of directors,....
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....tion can be granted to the applicant in this proceeding even if ultimately letter of administration is granted by this Court in favour of the plaintiffs. He also submitted that the interim relief which is claimed in this application mostly concerns with the internal management of the company which the Probate Court cannot regulate sitting in this jurisdiction. In support of his contention that the Probate Court cannot interfere with the internal management of the company, he has relied upon a decision of the Hon'ble Supreme Court in the case of Kanwarjit Singh Dhillon Vs. Hardyal Singh Dhillon & Ors. reported in (2007)11 SCC 357 paragraph 5. He also contended that it is well settled principle of law that Court has no jurisdiction to pass any order against any third party. He elaborated his submission by contending that in this probate proceeding Birla Corporation Limited has no caveatable interest. He argued that since Birla Corporation Limited has no caveatable interest in the suit, it cannot be impleaded as a party in this testamentary suit and if it cannot be impleaded as a party in the suit then no order can be passed by this Court affecting the interest of the Birla Corp....
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....lication cannot be granted against the Birla Corporation Limited, they have sought for certain directions against Harsh Vardhan Lodha one of the plaintiffs in the said suit, in addition to the reliefs claimed against the Birla Corporation Limited. Mr. Mitra submitted that Harsh Vardhan Lodha is the Chairman of the Board of Directors of the said company. He has dual capacity; one, as one of the plaintiffs i.e., as legatee under the Will and other is as Chairman of the Board of Directors of the said company. By referring to the application, Mr. Mitra contended that no allegation has been made by the applicants against Harsh Vardhan Lodha in his capacity either as plaintiff or as legatee under the said Will. As such no direction can be issued upon Harsh Vardhan Lodha either in his individual capacity or in the capacity as a legatee under the Will in this proceedings Mr. Mitra further contended that since this Court sitting in this jurisdiction has no jurisdiction to pass any order interfering with the internal management of the said company, this Court is incompetent to pass any direction upon any of the Directors of the said company including Harsh Vardhan Lodha, the Chairman of the ....
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.... the company Court would not as a general rule interfere with internal management of a company as the Court determines the question of law and not the question of business management which is the job of the Board of Directors. It was further held therein that if the shareholder could procure the aid of the Court in each and every action of the Board of Directors, it would lead to endless litigations and pin down the company within the four walls of the company Court. The High Court further held that the company Court should shut its doors to them and deny entry. Mr. Mitra further contended that the allegation made by the applicants that the directors of the said company are under the control of the Harsh Vardhan Lodha, the Chairman of the Board of Directors and in fact, all the decisions were taken by the said Harsh Vardhan Lodha, are baseless as it appears from the documents annexed to the said application that out of nine Directors six are independent Directors who were selected in the Annual General Meeting held on 21st August 2014 in terms of the provision contained in Section 150 of the companies Act, 2003. He pointed out that when these independent Directors were selected ....
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....Hirday Nath Roy Vs. Ramchandra Barua Sharma reported in ILR 48 CAL 138. The Full Bench of this Hon'ble Court dealt with the question as to what is meant by jurisdiction? It was held therein that before a court can be held to have jurisdiction to decide a particular matter it must not only have jurisdiction to try the suit brought but must also have the authority to pass the order sought for. It was also held therein that it is not sufficient that it has some jurisdiction in relation to subject matter of the suit. The Full Bench further held that in order to hold that the Court has jurisdiction to decide an issue, its jurisdiction must include the power to hear and decide the questions at issue. The authority to hear and decide the particular controversy that has arisen between the parties or in other words what is relevant is whether the Court had the power to grant the relief asked for in the application filed by the applicant. If it is held that the learned judge had competence to pronounce a judgment on an issue presented before him for his decision then the fact that he decided that issue illegally or incorrectly is wholly besides the point. Relying upon the said decision of....
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.... Court, as these findings are not conclusive findings arrived at by this Court at the final hearing. He further contended that the controlling power is allowed to be exercised by a Director only when the other Directors repose confidence in the said Director either for his strong personality or for his expertised knowledge and/or skill in management of the business of the company. Though, such controlling power is allowed to be exercised by a particular Director for having his strong personality and/or skill and/or ability to manage the business affairs of the company, such controlling power is not capable of passing to the successor by way of inheritance either by the testamentary succession or by intestate succession as the successor may not be found to be an able person like his predecessor who managed the business affairs of the company very efficiently and effectively. In short he contended that the controlling power of a Director cannot be a heritable estate which can be inherited by his successor either by testamentary succession or by non-testamentary succession. Mr. Chatterjee, further contended that the shares which the testatrix held in Birla Corporation Limited is....
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....on 397 of the companies Act, before the competent authority in accordance with the provision of the Companies Act. He, thus, contended that in case of the mismanagement of the company, the shareholders and/or their legal representatives cannot approach the Testamentary Court to redress their grievances as the testamentary Court cannot play the role of either the Company Law Board or the company Court to implement and/enforce the provisions of the Companies Act. He contended that when a statute gives a right and provides a forum for adjudication of rights, remedy has to be sought only under the provisions of that Act. According to him when an Act creates a right or obligation and/or enforces the performance thereof in a specified manner, that performance cannot be enforced in any other manner. Enforcement of a right/obligation under a statute can only be achieved by a person aggrieved by invoking the provisions of the said Act. In conclusion he submitted that it is well-settled that what cannot be done, directly cannot be permitted to be done indirectly. He, thus, contended that if the applicants have any grievance regarding mismanagement of the said company by the Directors, ....
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....der the maintainability of this application by accepting each and every statement made in the application as true and correct and if even after accepting the statements made in the application as correct, the Court comes to the conclusion that the application is barred by limitation and/or is otherwise not maintainable due to bar of law then the Court may reject the said application by holding it as not maintainable. In support of his submission he has referred to a decision of the Hon'ble Supreme Court in the case of Ramesh B. Desai & Ors. Vs. Bipin Vadilal Mehta & Ors. reported in (2006)5 SCC 368, wherein it was held that demurrer is an Act of objecting or taking exception or a pretext. It is the pleading by a party to a legal action that assumes the truth of the matter alleged by the opposite party and sets up that it is insufficient in law to sustain his claim or that there is some other defects on the face of the pleadings constituting a legal reason what the opposite party should not be allowed to proceed further. When a plea in the nature of demurrer is raised by the opposite party, the question of jurisdiction has to be determined with advertent to the allegation contained ....
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....etrimental to the interest of the said company and, as a result, thereof the shareholders will ultimately be affected then certainly the probate Court can pass suitable direction on this application to protect the estate of the deceased which consists of shares held by the testatrix in Birla Corporation Limited. Mr. Chidambaram further contended that he also does not want to join an issue with Mr. Mitra on the question of rights and obligations of the shareholders vis-à-vis the Directors. He however, contended that here is the case where the enforcement of the rights of the shareholders against the Director is not an issue before this Court presently. According to him, presently the Court will have to examine as to how the Control over the management of the M.P Birla Group of Company which Mrs. Priyamvada Devi Birla used to exercise as promoter of the M.P Birla Group of Companies, has to be exercised by the representative of the Probate Court during the pendency of the probate proceeding. By referring to the various judgments of this Court passed either by the Learned Single Judge of this Court or by the Division Bench of this Hon'ble Court at different stages of the i....
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....ction so that even in the absence of the "APL", estate of the deceased is not burdened and/or jeopardized in any way. He thus, contended that the probate Court has to make effective provision so that the control as defined in Section 2(27) of the Companies Act which could have been exercised by the promoter of the company can be exercised by the representative of the Court or by the Court itself during the pendency of the probate proceeding. Mr. Chidambaram, learned Senior Counsel, submits that the controlling block of shares held by Priyamvada Devi Birla in M.P. Birla Group of companies is the main asset of the estate of Priyamvada Devi Birla. Priyamvada Devi Birla used to exercise control over entire holding of 62.9 % shares of the company (BCL) which was held by different entities through directly or indirectly through the interlinking, chain and cross-holding of shares of the companies over which she had control. Apart from the shares she had in the said company she bequeathed her controlling power over the M.P. Birla Group of companies in favour of Rajendra Singh Lodha by her alleged will and, in fact, Rajendra Singh Lodha assumed his power to exercise control over the M....
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....olume XXXVIII Income Tax reports (Estate Duty) 88. 3. In the case of Commissioner of Income Tax Bombay City-1 Vs. Jubilee Mills Ltd. reported in Volume XLVIII 19 4. In the case of Vodafone International Holdings BV Vs. Union of India & Anr. reported in (2012) 6 SCC 613. By referring to aforesaid decisions he contended that the phrase controlling interest is a concept which is capable of controlling only a proprietary right i.e., an interest in the nature of ownership. He pointed out that the House of Lords interpreted the conception of controlling interest in a way which may well cover the relationship of one company towards another, the requisite majority of whose share are, as regards their voting power, subject, whether directly or indirectly, to the will and ordering of the first mentioned company. He also argued that the Hon'ble Apex Court has also in several decisions discussed the concept of the controlling interest. It was held that control of a company vests in the voting powers of its shareholders and the shareholders holding a controlling interest can determine the nature of the business, its management, enter into contract, borrow money, buy, sell or merger of ....
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....hitambaram pointed out that the B.C.L has proposed to acquire the four cement manufacturing company of Reliance Infrastructure Ltd. partly by utilizing its own fund and mostly by borrowing money. He thus, contended that when B.C.L now proposes to acquire these four cement manufacturing units mostly by borrowing money, the Probate Court before allowing the B.C.L to implement the said project should consider the prospect of such business and risk factor which is involved in making such huge investment for the said project. He further contended that since for making such assessment regarding viability of the said proposed business expansion, the presence of B.C.L is necessary, his clients have prayed for leave to serve a copy of this application upon B.C.L so that after hearing the B.C.L and after considering the papers relating to such transaction, the Court can ultimately decide the viability of the said proposed business expansion. Since Harsh Vardhan Lodha is the Chairman of the Board of directors, direction was sought for upon the said Harsh Vardhan Lodha and the BCL for production of the relevant papers relating to such consideration before the Court and injunction was sought....
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....erit. Before concluding he also submitted that the Court's power to grant leave to file supplementary affidavits for production of evidence under Order 7 Rule 14(3) of the Civil Procedure Code is also recognized by this Court in the case of Kejriwal Enterprises Vs. General Manager, Ordnance Factory & Ors. reported in AIR 2004 Cal 225. As such according to him leave was rightly granted by this Court to the applicant to file supplementary affidavit. Mr. Pal, learned Senior Counsel, appearing for the other group of defendants in support of their application being G.A No. 189 of 2006 adopted the submission of Mr. P. Chidambaram. He however, tried to distinguish the cases cited by Mr. Mitra, learned Senior Counsel appearing for the Lodhas. He tried to convenience this Court that the decisions cited by Mr. Mitra are not applicable in the facts of the present case. He submitted that the decision in the case of Lakxmi Raj Shetty & Anr. Vs. State of Tamil Nadu (supra) and in the case of Ravinder Kumar Sharma Vs. State of Assam & Ors. (supra) which were cited by Mr. Mitra, in support of his submission that the newspaper reportings are not admissible evidence and as such no reliance can....
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....ny interest in the assets of the company have no application in the facts of the instant case as this is a case where the applicants have not come forward to exert their right in respect of the assets of the company rather they claimed that the controlling block of share holding which is an asset of the estate of the deceased is properly protected, preserved and is not dissipated during the pendency of the probate proceeding as preservation and protection of the estate i.e., the controlling block of share holding in the company pending disposal of the probate proceeding, is necessary under Section 247 of the Indian Succession Act. He further contended that the decisions cited by Mr. Mitra in the case of Cochin Malabar Estates & Industries Ltd. & Anr. Vs. P.V. Abdul Khader & Anr. and N.K Mohammad Ali & Ors. reported in (2003) 114 Comp Case 777 and decision reported in (2014) 3 SCC page 1 to support of his contention that the grievance of a shareholder regarding the affairs of a company can only be agitated before Company Law Board and not before the High Court have no application in the fact of the instant case as this is not a case where application has been filed by the applica....
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.... the Probate Court cannot pass any injunction order against a person who is not a party to the proceeding has no application in the instant case as this is a case where leave was sought for from the Court for serving a copy of the notice upon Birla Corporation Limited so that the merit of the said application can be decided by the Court after giving a reasonable opportunity of being heard to the said company. He further contended that the decision which was cited by Mr. Mitra, in the case of Kanwarjit Singh Dhillon Vs. Hardyal Singh Dhillon & Ors. reported in (2007) 1 SCC page 357 to support of his contention that the Probate Court cannot decide the disputed question of title, has no application in the present case as the title relating to the estate of the deceased i.e., in controlling block of shares is not under challenge in the present application. He further argued that the decision cited by Mr. Mitra in the case of Official Trustee, West Bengal and Ors. Vs. Sachindra Nath Chatterjee & Anr. (supra) to support of his submission that an application should be rejected on the ground of its maintainability if the Court trying such application is found to have no jurisdiction ....
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.... value of the estate comprising of the controlling block of shares runs the risk of devaluation since the value of the estate, has an intimate relationship with the assets of the company and further as to whether the Court of conscience must be satisfied that nothing is done which would expose the estate to a risk without due diligence with reasonable care and caution need not be decided by the Court presently as all these issues relating to the merit of the petition can only be decided after exchange of affidavits between the parties. Mr. Pal thus concluded by submitting that the application which is now under consideration before this Court is well maintainable and thus, he invites the Court to consider the said application on merit and to pass some interim protection, pending disposal of this application, so that the object of filing this application is not ultimately frustrated. Mr. Mitra, Learned Senior Counsel appearing for the Lodhas, while arguing in reply, maintained his earlier stand that the present application is not maintainable as the reliefs which the applicants have claimed in the application cannot be granted by the Probate Court. He contended that the Pro....
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....tely concluded that had the "APL" been operative still then the APL in exercise of its controlling power could not impose its decision over the decision of the Board of Directors in acquiring four units of another cement manufacturing company partly with its own capital and partly by borrowing money from the market. He distinguished the decisions cited by Mr. P. Chidambaram in support of his contention that the Probate Court can pass injunction order even against the third party to protect and/or preserve the estate of the deceased pending probate proceeding and submitted that in none of these decisions, it was held that injunction can be passed by the Probate Court against third party. By reading the decisions in the case of Neodebarni Devi Vs. Chamatkarini Devi reported in 27 Indian Cases page 617, in the case of Atula Bala Dasi Vs. Nirupama Devi reported reported in AIR 1951 Cal page 561, in the case of Amarendra Dhwaj Singh & Anr. Vs. Prem Kumar Sing & Sons reported in 2013(1) PLJ page 1853 and in the case of Shri Karamjit Jaiswal Vs. Investec Trust (Jersey) Limited & Ors. reported in 2011 of 180 DLT page 15, Mr. Mitra pointed out that in none of the aforesaid decision it wa....
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....the "APL" remained operative, still then the "APL" could not have taken any step without taking recourse to the provisions of the companies Act and without approaching the appropriate authorities under the Companies Act for seeking appropriate reliefs. According to him even the "APL" cannot encroach upon the jurisdiction of the Board of Directors in the matters where exclusive jurisdiction is vested with the Board of Directors by the Companies Act, 2013. He ultimately concluded by submitting that since the Companies Act, 2013 has not given any power to the promoter to exercise his/her power of control over the decision of the Board of directors in respect of any of the matter enumerated in Section 179 of the Companies Act neither Mrs. Birla, had she been alive today, nor her successor nor "APL" can interfere with the decision of the Board of Director nor can they impose their decision over the decision of the Board. Let me now consider the maintainability of these applications in the context of the submission made by the learned Counsel appearing for the parties. At the very outset I like to record my agreement with the submission of Mr. Chidambaram, learned Senior Counsel appea....
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....already mentioned above the nature of the application and the reliefs claimed therein in a great details. As such for avoiding repetition, I need not narrate the contents of the said application and/or reliefs claimed therein in details. Suffice it to mention herein that such an application was filed by some of the defendants who have caveatable interest in this probate proceeding complaining that Birla Corporation Limited is going to acquire four units of cement manufacturing company of Reliance infrastructure by purchasing its shares involving huge investment of about 4000-4200 crores partly by utilizing the company's liquid resources of around Rs. 1700/- crores and remaining by borrowing. When they came to know about the decision of the BCL for acquiring the four cement manufacturing units of Reliance Infrastructure partly by utilizing its available liquid resources and partly by borrowing, from various newspaper reports, the applicants became apprehensive about future business prospect of the said company as the debt burden of the company will increase by about Rs. 3100/- crores by execution of such deal with Reliance Infrastructure. According to them the controlling block o....
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....he last Will of the testator and/or testatrix and there was no suspicious circumstances under which such will was executed by the testator/testatrix, then the testamentary Court will grant probate to the said last Will of the testator/testatrix. On the contrary, if the Court finds that the Will was not duly and consciously executed by the testator/testatrix or the Will was not properly attested or this is not the last Will of the testator or there was suspicious circumstances under which such will was executed and the suspicion could not be removed from the minds of the Courts then the Court will have no other alternative but to dismiss the suit. This is the extent of jurisdiction which the Probate Court exercises while considering the plaintiffs' prayer for grant of probate to the Will of the testator/testatrix. In addition thereto some additional duty is imposed upon the Testamentary Court under Section 247 of the Indian Successions Act i.e, to see as to whether by any act and/or omission on the part of any of the parties, the value of the properties belonging to the estate of the deceased is dissipated or not and in the event it is found that by any action and/or omission on ....
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.... that such adjudication is made in the presence of the Birla Corporation Limited. Let me now first of all consider as to how far such prayer for allowing the applicants to serve a copy of the application upon BCL can be allowed by this Court. I have already mentioned above that such applications were filed in a probate proceeding before the Testamentary Court. I think that no elaboration is necessary on the point of law, viz., that none excepting those who have caveatable interest in the probate proceeding, can be allowed to be joined as a party defendant in the suit. Keeping this principle in mind, this court has no hesitation to hold that since Birla Corporation Limited has no caveatable interest in the probate Proceeding, it cannot be added as a party in the probate proceeding. Thus, if I consider the applicants' prayer for allowing them to serve a copy of these applications upon Birla Corporation Limited from this angle then I hold that such prayer of the applicant cannot be allowed, as the Birla Corporation Limited has no caveatable interest in this probate proceeding. Let me now consider as to whether such relief can be granted to the applicants in a different context. Sup....
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....itled to move a petition for infringement of the rights of the company, unless by the action impugned by him, his rights are also infringed. Thus, since the shareholder has no interest in the assets of the company, I hold that the assets of the company cannot be an asset belonging to the estate of the deceased. Thus, I hold that on the strength of share holding interest in the company, the shareholder did not acquire any interest in the assets of the company and as such the assets of the company cannot be a part of the estate of the deceased and thus this Court is not required to consider the business prospect of the said BCL arising out of the proposed deal with Reliance Infrastructure to find out as to whether in case the deal with Reliance Infrastructure is ultimately matured then is there any chance of the assets of BCL being dissipated. Mr. Chidambaram, learned Senior Counsel appearing for the applicants tried to impress upon this Court that apart from the shares which Mrs. Birla had in B.C.L, Mrs. Birla as a promoter of the said company used to exercise her power of control over the management of the said M.P Birla Group of Companies and on her death the said power of cont....
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.... having controlling power over the management of the company. The expression "control" was not defined in the Companies Act, 1956. However, the expression "control" has been defined in the Companies Act, 2013 in the following manner. Section 2(27) "control" shall include the right to appoint majority of the Directors or to control the management or policy decision exercisable by a person or persons acting individually or not concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner; Mr. P. Chidambaram drew my attention to the following decision i.e., some English decisions as well as the decisions of our Apex Court to impress upon me as to what control exactly means and how such control can be exercised by the promoter in the management of the company even when the expression "control" was not defined in Companies Act, 1956:- 1. In the case of British American Tobaco Company Limited Vs. Inland Revenue Commissioners reported in 1943(1) all England Reports 13. 2. In the case of Barclays Bank Limited Vs. Inland Revenue Commissioner reported in (1959)Ch. 659 Vol. XXX....
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....dings, is not only binding upon the parties but also is binding upon this Court and as such, I have no hesitation to hold that such controlling power is an important and valuable asset belonging to the estate of Mrs. Birla. Now question is as to how such controlling power can be exercised by the promoter. Can it be exercised by the promoters of the company without following the provisions of law? In my considered view, such controlling power over the management of the company cannot be exercised by the prompters and/or the promoter group in derogation of the provision of the Companies Act and/or the contract contained in the Articles of Associations. The Companies Act, 2013 has defined the expressions "Control" and the promoter in Section 2(27) and Section 2(69) of the said Act respectively. How the promoters can exercise their power of control over the management of the company has also been enumerated in different provisions of the Companies Act viz., in Section 167(3), Section 168(3), Section 289(1) etc. Thus, I hold that exercise of controlling power by the promoter is controlled and/or regulated by the provisions of the Companies Act. Controlling power cannot be exercised a....
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....olling or substantial stake in another company even by borrowing money subject to the restriction imposed under Section 180(1)(C) of the Companies Act. There is no allegation in the petition that even the decision for implementation of the said project by borrowing money was taken by the Board of Directors contravening the provision of Section 180(I)(C) of the Companies Act, 2013. No other provision from the Companies Act could be pointed out by the learned Senior Counsel appearing for the applicants to demonstrate that the authority which was given to the Board of Directors under the Companies Act as mentioned above is subject to the control to be exercised by the promoter. If that be so then can it be said that such decision of the Board of Directors for expanding its business by taking over four cement manufacturing units of Reliance Infrastructure cannot be implemented without approval of the promoters of the said company. My answer to this question is in the negative as I hold that jurisdiction to exercise such power which is vested with the Board of Directors is not controlled by the decision of the promoters, even though the promoter and/or the group of promoters hold con....
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.... complaint is forthcoming for any quarter that the business of B.C.L will be ruined if the decision of the Board of Directors is implemented resulting fall in its share price, I hold that the testamentary Court, while in seisin of the probate proceeding, cannot pass any direction encroaching upon the jurisdiction of the Board of Directors for taking over four cement manufacturing units of Reliance Infrastructure by purchasing its shares. This conclusion is drawn by this court as I hold that for implementation of such decision of the Board of Directors approval of the promoters having control over the management of the business of the said company, is not necessary. In the aforesaid set of facts this court holds that B.C.L need not be served with any notice relating to this application for examining its business prospect arising out of the proposed taking over of the four cement manufacturing units of Reliance Infrastructure by purchasing its shares. I, however, make it clear that in the event, the shareholders have any complaint and/or grievance, the shareholders can ventilate their grievances before appropriate forum such as Company Law Board etc. They may also initiate process....
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....passed in any of the properties belonging to the estate of the deceased, can the Probate Court pass a decree for eviction against such trespassers by adjudicating the rival claims of the parties over title in the said property? Many other instances can be given where the Probate Court will feel helpless in passing appropriate order and in implementation thereof by itself, even if the Probate Court finds that such order should not only be passed but also should be implemented for preservation of the estate of the deceased. In my view, if any order is passed by the Probate Court for preserving the estate of the deceased, such order can only be executed through the agent of the Probate Court i.e., "APL". As such "APL" should be made functional immediately to protect and preserve the estate of the deceased so far as the shareholding interest of Mrs. Birla and her controlling power over the M.P Groups of Companies which are most precious assets of the estate of the deceased are concerned. In my view, in case any circumstance as aforesaid arises where intervention of the Court is necessary for preserving the estate of the deceased, the Probate Court at best can pass necessary direction u....
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....ed in 2013(1) PLJR 853, (iv) In the case of Sri Karmajit Jaiswal Vs. Investec Trust (Jersey) Limited & Ors. Reported in 180 (2011) DLT 15. Relying upon the aforesaid decision of different High Courts Mr. Chidambaram, Learned Senior Counsel submitted that the Probate Court has the jurisdiction to pass interim order of injunction though such power cannot be exercised under Order 39 rules 1 and 2 of the Code of Civil Procedure but such power can be exercised by the Court under its inherent jurisdiction under Section 151 of the Code of Civil Procedure. By referring to the judgment of the Delhi High Court in the case of Sri Karmajit Jaiswal Vs. Investec Trust (Jersey) Limited & Ors. (supra) Mr. Chidambaram submitted even the Court's power to grant injunction against third party is recognized by the Delhi High Court in the said decision. Let me now consider the submission made by the learned Counsel appearing for the parties and the decision cited at the bar. I have perused all the decision cited by learned Counsel appearing for the parties and the decision cited by the learned Counsel appearing for the respective parties as referred to above very minutely. On perusal of those judgmen....
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....f injunction against Harsh Vardhan Lodha who is a party to the proceeding, if passing of such injunction is deem fit and proper in the present case. Let me now consider this part of the submission of Mr. P. Chidambaram, learned Senior Counsel. In the present case we find that Harsh Vardhan Lodha has dual capacity. He is a party to the probate proceeding as he is one of the plaintiffs in the Probate Suit. He is an applicant for the grant of letter of administration as a legatee under the Will. He has another capacity i.e., he is Chairman of the Board of Directors of B.C.L. His capacity as a Chairman of the Board of Director in B.C.L cannot be mixed up with his capacity as legatee under the Will. In this connection a question will crop up as to whether the direction which was sought for by way of injunction against Harsh Vardhan Lodha, can be passed against Harsh Vardhan Lodha as a legatee under the Will. Answer is no. Since Harsh Vardhan Lodha is not a party in his capacity as a Chairman of the Board of Director of B.C.L, no direction can be passed against Harsh Vardhan Lodha in the capacity of he being a Chairman of the Board of Directors of the said company. As such I hold t....
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....ty to hear and decide the particular controversy that has arisen between the parties or in other words what is relevant is whether the Court had the power to grant the relief asked for in the application filed by the applicant. If it is held that the learned judge had competence to pronounce a judgment on an issue presented before him for his decision then the fact that he decided that issue illegally or incorrectly is wholly besides the point. Before parting with, this Court also likes to consider the submission of the learned Counsel of the respective parties with regard to the admissibility of the newspaper reportings on which the foundation of this application rests. Several decisions have been cited by Mr. Mitra, Learned Senior Counsel, to demonstrate that newspaper reportings are hear say evidence and as such, newspaper reportings per se are not admissible and since the reliefs claimed in this application are based on newspaper reprotings only, the Court should dismiss the said application as it does not disclose any cause of action. The legal position in this regard is very clear. It has been decided by the Hon'ble Supreme Court in the decision cited by Mr. Mitra that the....