The Hindu Business Line : Birla-Lodha tussle: Calcutta HC appoints four administrators

The Birla-Lodha tussle saw dramatic development on Friday. At 3.45 in the afternoon a trial court of the Calcutta High Court appointed a group of administrators for the late Priyamvada Birla's estate and barred Mr R.S. Lodha from acting as chairman of her company.

However, within half an hour, a Division Bench passed a stay order on the judgment and allowed Mr Lodha to function as Chairman for daily activities of the companies. However, for policy decisions approval of the court was necessary.

In his verdict, Mr Justice Kalyan Jyoti Sengupta of the trial court — who is hearing the probate matter and the Birla's administrator appointment appeal - citing a Supreme Court order (which allowed the Birlas to start criminal proceedings against Mr Lodha) said there was a case for the appointment of a group of four administrators.

Mr Lodha's lawyers appealed for a stay and Mr Justice Sengupta granted it for five weeks on the condition that Mr Lodha could not function as Chairman of the MP Birla companies on the strength of the shareholding of the late Priyamvada Birla.

Immediately, the Lodha lawyers moved a Division Bench, comprising JusticesMr Pinaki Ghosh and Mr Tapan Dutta. The Bench ordered that status quo should be maintained and Mr Lodha could continue to function as chairman for the next two weeks.

The Bench will hear the matter on June 13 after a two-week vacation, which starts tomorrow.

The group of administrators, ordered by Mr Justice Sengupta, would consist of two senior advocates, a CA and person with experience in running companies.

The group will function after consulting both Mr Lodha and the Birlas and if there are differences of opinion the matter would be referred to the Court.

As expected, both sides interpreted the verdict, which was just read out (no copies were available), as a victory. Mr N.G. Khaitan, the Birla lawyer, said his "stand has been vindicated" and the management of the 38 MP Birla group companies would be with the administrators.

Mr Debanjan Mandal, the Lodha lawyer, contradicted this view and said that Mr Justice Sengupta, "declined to pass orders on the Birla prayers for the appointment of administrators for all these companies".

At a press meet, Mr S.K. Birla declared Mr Justice Sengupta's order as a "landmark judgment" which would "rescue charity and benefit the society".

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