TaxTMI 
TaxTMI 
2005 (3) TMI 830
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....the said deceased (husband's sisters) and they have been contesting the grant of probate in relation to the will said to be the last one of the said deceased while the abovementioned four persons viz. the Birlas have lodged their caveats intending to oppose the grant but they have not been made parties defendant as yet. Their caveats are sought to be discharged on the ground that the aforesaid persons have no interest in the estate of the said deceased. All these three applications contain identical prayers even in word by word. 2. The last three applications have been taken out by the plaintiff R.S. Lodha for dismissal of all the three respective applications for interlocutory reliefs, in limine and with costs and/or stay of all further proceedings in connection with the aforesaid all the three applications. 3. All the aforesaid six applications were moved for obtaining ad interim relief as prayed for in the respect applications. 4. Mr. S.B. Mukherjee learned, Senior Advocate, Mr. P.K. Roy, Senior Advocate (now deceased) with Mr. S. Pal Senior Advocate at the time of moving of their respective applications upon instructions clearly submit that they are not pressing for inte....
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....propriated and mismanaged by the said plaintiff. By virtue of this Will the shareholding of the said deceased lady in respect of the two holding companies and through it controlling power over other subsidiary companies have developed upon him. Shares in all the four companies viz. Eastern India Investment Co. Pvt. Ltd, Gawalior Webbging Pvt. Ltd., Mazbat Pvt. Ltd. and Mazbat Investment Pvt. Ltd. shares held by the said deceased are majority in number at a percentage of 74.92 per cent, 50.43 per cent, 78.48 per cent and 78.40 per cent. With this majority shareholding of these four holding companies Lodha has now gained control over other subsidiary companies in which the said deceased or the Lodha has no individual or insignificant shareholding. Through shareholding of these M.P. Birla group of companies the management and control of all companies were being really held by the said deceased significantly with the son of Lodha viz. Harsha Bardhan Lodha. The other shareholders though having larger shares in other companies are absolutely remediles. The appointment, removal of all the directors of all these companies will be really controlled and manipulated by Lodha. 7. He submits t....
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....ty. In the Estate Duty Act and Rules (since repealed) the controlling block of shares were used to be treated as an estate. So, the meaning and expression of the 'estate' in the said Act can usefully be brought and accepted in this case also. He has also drawn my attention to Sections 20 and 37 of the Estate Duty Act. 13. He further contends that Lodha immediate after death of the deceased Lady on the strength of the alleged Will of 1999 without applying for grant of probate started acting to act as beneficiary of the said Will and has drastically changed management and controlling pattern of all the M.P. Birla Group of Companies. He taking advantage of the majority of shareholding in interlinking shareholding pattern amongst all other companies has started mismanaging the core company Birla Corporation Ltd. as such the majority shareholders have already resorted to appropriate proceedings before the Company Law Board. According to him the alleged Will of 1999 is an outcome of fraud and forgery and the same was procured from the said deceased on the basis of fraudulent representation. As such the appropriate criminal proceedings has been initiated, before the appropriate f....
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....t in the helm of affairs of all the M.P. Birla Group of Companies. His client has served various Governmental and non-Governmental departments in various high and prestigious position and offices. His efficiency and competence in running industry is well-accepted and recgonized. He submits that appointee and/or nominee of the testatrix should not be deprived of his right lightly or by mere asking. 17. He submits that whatever estate and assets left behind by the deceased as disclosed in the affidavit of assets and whatever will come to his client's hands he assures this Court will be kept intact. The shares received by him qua executor of the said deceased Lady will not be transmitted nor the same be sold to any third party. That apart few left out assets which have not been indicated in the affidavit of assets in this probate proceedings and in the probate proceedings of the rival Will of 1982 of the said deceased Lady will also be kept intact. According to him the word 'property' mentioned in Section 211 should be construed and meant what have been stated in the affidavit of assets by his client, which have come in his hand. 18. He while pressing his client's ap....
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....R 1994 SC 1375; AIR1999SC1734 . 22. Mr. Sakti Nath Mukherjee, learned senior Advocate appearing for the Lodha in the application being G.A. No. 4374 of 2004, not only opposes the application of one of the two sisters M.P. Birla namely Laxmi Devi Newar but also presses his client's separate application for dismissal of the related application of the sister/defendant. He basically supports the argument of Mr. Mitra. In addition thereto he contends the present application is really grossest abuse of process of the Court and the same is an act of contempt. The mala fide motive of the defendants and the other caveators would be apparent from the fact that at the time of making application for grant of probate or immediately thereafter no action was taken for appointment of Administrator pendente lite. 23. He submits further that his client Lodha is a man of confidence of the deceased Lady from the time not immediately before the date of execution of the Will. Since 1991 his client has been unquestionably enjoying confidence of this Lady. He has placed various documents annexed to his client's application wherefrom he wants to demonstrate how his client was gradually brought ....
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....ince deceased, very fairly submitted in the very beginning that their clients were not praying for any ad interim order of appointment of Administrator pendente lite at this stage and this would be prayed for after filing of affidavit in the event three instant applications are admitted for hearing. So, at this stage my endeavour would be to see whether the three applications on the face of the opposition of Lodha can be admitted for hearing and further any ad interim order of injunction as prayed for in the application should be passed or not. Mr. Mukherjee and Mr. Mitra at the time of hearing were agreeable to maintain status quo with regard to the assets and properties as mentioned in the affidavit of assets. However, Mr. Mukherjee and Mr. Pal were not satisfied with this concession and they want that the sates quo order should be passed not only in relation to the shareholding, assets and properties left behind by the deceased Lady, but also in relation to the composition of Board of Directors for control and management of the M.P. Birla Group of Companies and others Trust Estates. 29. Having heard the learned Counsels and upon considering the authorities cited before me I am ....
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....isposition any property, which is capable of being so disposed of by him, in accordance with the provisions of the Indian Succession Act, 1925 (39 of 1925), or any other law for the time being in force and applicable to Hindus. Explanation--. The interest of a male Hindu in a Mitakshara a coparcenary property or the interest of a member of tawed, tavazhi, illom, kutumba shall, notwithstanding anything contained in this Act or in any other law for the time being in force, be deemed to be property capable of being disposed of by him or by her within the meaning of this section." 31. In my view the disposition of property means an act by which property can be transferred by executing a deed inter vivos in case of immovable property or interest therein, by parting with possession in case of movables. Here there is no dispute as regards the transferability character of the movable and immovable properties including shareholding. I accept the argument of Mr. Mitra and Mr. S.N. Mukherjee that shareholder stands on a different footing from that of the company, which is a separate legal entity. This settled position though does not require any support of any authorities as it is so ....
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....ite natural the majority shareholding will have the decisive role in the matter of appointment of directors. All the powers of the company are exercised by the Board of Directors as conferred under the provision of Sections 291 and 292 of the Companies Act. Therefore, the Directors appointed by the majority shareholders are the de facto controller and manager of the company. So, in my prima, facie view, majority shareholding to put differently controlling bock of shares, constitute undefined or unspecified right or status which has got far-reaching effect in affairs of the company and the same is nothing short of the property in real sense. It is an admitted position that Lodha has already got possession of the majority of the shares of the holding companies from the said deceased lady and by the mechanism of interlinking shareholding with other groups of companies, the entire M.P. Birla Group of Companies can in fact be controlled and managed either by Lodha himself or his nominee. It is also admitted position that Lodha has already got his name registered as the transferee qua executor of the Will yet to be probated in the company register and then he has consolidated his positio....
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.... property. This value is liable to be fluctuated depending upon the stock exchange market if the shares are quoted but in case of unquoted ones it depends upon the profitability and viability of the company concerned. Necessity of passing interlocutory order regulating management and control in relation to the fixed assets, real properties, must be founded on a stronger ground and as the ascertained properties with their ascertained income can easily be managed and controlled and even the properties are left at the hands of the executors for it is unlikely the same can be wasted or damaged. But in case of the property value of which is volatile in nature necessity may arise and the supervision and vigilance of the Court, may be called for its protection and preservation. This necessity may be felt in a case where there has been serious challenge against the Will in the probate proceeding and further and in particular where the executor himself is beneficiary. Human mind is very flexible in nature and in any moment for his own interest executor/sole legatee can change his mind forgetting his obligation to the estate vis-a-vis the Court, particularly if though occurs in his mind that....