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Calcutta HC directs removal of Harsh Vardhan Lodha from MP Birla Group of companies

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NEW DELHI: The Calcutta High Court on Friday passed its final judgment directing the removal of Harsh Vardhan Lodha from all the positions within the M.P. Birla Group.

The high court has also passed a host of other directions in favour of the Birlas. This arises out of the long standing dispute between the Birlas and the Lodhas regarding the will of Priyamvada Devi Birla.

In July 2019, the Birlas had filed an application before the Calcutta High Court for the implementation of the decisions of the Committee of Administrators.

The Committee of Administrators was appointed by the high court in 2012 to administer and manage the estate of late Priyamvada Devi Birla. The committee in July 2019 directed the removal of Harsh Vardhan Lodha from the boards of the Vindhya Telelinks Limited and Birla Cables Limited.

The committee also refused to support the resolution for the payment of profit based remuneration to Harsh Vardhan Lodha. The same decisions were repeated in relation to the Birla Corporation Limited and the Universal Cables Limited in July 2020.

The committee took these decisions primarily on the basis that Harsh Vardhan Lodha was in a position of conflict of interest and acting against the interests of the estate and the companies.

This set the stage for another round of acrimonious and aggressively contested legal battle between the Birlas, Lodhas and the MP Birla group of companies — which chose to side with the Lodhas.

In relation to certain interim protection granted by the single judge, the matter travelled all the way up till the Supreme Court wherein the apex court ruled in favour of the Birlas and made the decisions taken by the companies against the committee’s directives subject to the final outcome of the decision of the high court.

The Supreme Court also affirmed the inclusion of the companies in the dispute in relation to the decisions by the Committee of Administrators.

Now, the Calcutta High Court in a judgment has directed the implementation of the decisions of the Committee of Administrators. The court has restrained Harsh Vardhan Lodha from holding any position in the M.P. Birla Group. The court has also restrained Harsh Vardhan Lodha from drawing any benefit from the assets of the estate.

The court has specifically restrained him for interfering with any decision of the APL Committee, which is taken by majority. This paves way for smooth functioning of the Committee of Administrators.

These directions mean that Harsh Vardhan Lodha immediately ceases to hold all the positions in the M.P. Birla Group, including as director in the companies and other positions in the trusts and societies of the M.P. Birla Group. The court held that since the companies are not parties to the testamentary proceedings, directions cannot be passed against them but the decisions of the Committee of Administrators shall be implemented by Lodhas, who are plaintiffs in the testamentary proceedings.

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