TaxTMI 
TaxTMI 
2005 (4) TMI 599
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....n 250(2) of the Act. 2. The case of the petitioners is: The company is a part of M.P. Birla Group and has always been known as a Birla company. The respondents 1 to 28 hold, collectively among themselves, 63.8% -shares in the company. Respondents 1 to 19 are incorporated companies and respondents 20 to 28 are charitable institutions/societies. All these entities were under the control and management of M.P. Birla till 1990 when he expired. Thereafter, his wife Mrs. Primada Birla came to be in control of these entities. She died in July, 2004. Since these entities held more than 63% shares in the company, the person/persons controlling these entities would be financially interested in the success or failure of the company. Thus, Mrs. Priyamvada Birla was in control of the management and affairs of the company. After her demise, the petitioners were shocked to learn that one Rajender Singh Lodha had applied before Calcutta High Court for grant of probate in respect of a Will stated to have been executed by late Mrs Birla bequeathing her entire estate in his favour and that he had also been appointed as the executor of the said Will. Other members of Birla family have opposed the g....
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....isaged in the Take Over Code. Once an order of investigation in terms of Section 247(1A) of the Act is passed, all these aspects could be investigated. 5. Shri Sundaram, Sr. Advocate appearing for the respondents submitted: This petition has been filed for a collateral purpose for restraining the respondents from exercising voting rights in the ensuing AGM of the company. There is no dispute that late Mrs Birla was in control of respondents 1 to 28 and that the Will executed by her is under challenge before the Calcutta High Court. In the petition, the petitioners themselves have averred that Shri Lodha is controlling respondents 1 to 28. If it is so, the question of investigation under Section 247(1A) to find out facts about the shares does not arise. Whether Shri Lodha is entitled to control the respondents is a question to be decided by the High Court and the Inspector appointed under Section 247(1A) cannot decide this issue. There has been no change either in the management or in the Board of Directors of the company after the demise of Priyamvada Birla. The shares held by respondents 1 to 28 are intact and there has been no transfer of shares held by them in the company. In....
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.... Calcutta High Court. 7. I have considered the pleadings and arguments of the counsel. I had reserved the order on this petition to be delivered along with the order on CP 57 of 2004. However, the petitioners filed CA No. 68 of 2005 seeking for issue of the order on this petition. This application was heard at length. At the conclusion of the hearing of this application, both the counsel suggested that the poll results of the of the AGM relating to the election of certain directors, which were kept under sealed cover, be opened as the same would indicate as to who is in control of the interests of late Mrs Birla. The sealed cover was opened and the results, as indicated later in this order, were declared. 8. The provisions of Section 247(1A) of the Act which empowers the CLB to order investigation specifically states that the Board will have to declare that the affairs of the company ought to be investigated as regards the membership of the company and other matters relating to the company for the purpose of determining the true persons (a) who are or have been financially interested in the success or failure, whether real or apparent of the company or (b) who are or have bee....
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....nts 1 to 19 by which the control of these respondents had changed or there are changes in the Board of Directors of these respondents or that these respondents have transferred the shares held by them in the company. Similarly, there is no allegation that there is any change in the management of the respondents 19-28. In other words, the controlling interest in the company is still with the estate of late Priyamvada. As rightly pointed by Shri Sundaram, from the averments of the petitioners in the petition it is seen that their own case is that Shri Lodha is controlling the interests of late Mrs Birla and that is the reason why they have raised the issue of Take Over Code. Likewise, while denying that Shri Lodha is controlling the interests of the estate, the learned counsel for the respondents contended that provisions of the said Code are not applicable to a case of transmission of shares. In other words, both seem to have advanced their arguments on the basis that Shri Lodha is controlling the interests of late Mrs Birla. If it is so, then there is no need for investigation in terms of Section 247(1A). Even on facts, it is seen that after the demise of Mrs Birla, there was an AG....