Calcutta HC dismisses contempt petitions against Harsh Vardhan Lodha

According to the Lodhas, the ‘landmark judgment’ clears the decks for Harsh Lodha to continue as the chairman of all companies of the MP Birla Group

Topics

Birla Group | Calcutta High Court | Birla Corporation

A Division Bench of the Calcutta High Court dismissed contempt petitions filed against Harsh Vardhan Lodha for continuing as a director and chairman in Birla Corporation Ltd, Universal Cables Ltd, Vindhya Telelinks Ltd and Birla Cable Ltd on Thursday.

According to the Lodhas, the “landmark judgment” clears the decks for Harsh Lodha to continue as the chairman of all companies of the MP Birla Group.

Confirming the dismissal of contempt applications, the Birla side said, “We are awaiting the copy of the order passed today and would decide the future course of action after studying the same.”

Lodha’s advocate, Debanjan Mandal, partner, Fox & Mandal, said that in the past two years, relentless attacks have been mounted, not only on Lodha, but also on the independent directors and executives of the MP Birla Group companies.

“Thursday’s verdict vindicates the highest level of governance standards maintained in these companies from the times of the late Madhav Prasad Birla,” he added.

The contempt application was filed by the Birla side on grounds of violating a Division Bench order dated October 1, 2020.

The sequence of events was somewhat like this: on September 18, 2020, the Single Bench of Calcutta High Court ordered that Lodha be restrained from holding office in any of the M P Birla group entities during the pendency of the suit involving the contested will of Priyamvada Birla.

The order was challenged by Lodhas before the Division Bench which declined an ad interim stay on the Single Bench order and clarified that the restriction on Lodha was “on the strength of shares referable to the estate of Priyamvada Birla”.

However, the order was interpreted by the Birlas and Lodhas differently. According to the Lodhas, the order paved the way for Lodha to continue to hold offices in all the companies since in all of them, as he was reappointed on the strength of shares of third-party promoter group entities, financial institutions and individual shareholders.

Lodha continued to act as director of these companies and chaired board meetings of Birla Corporation and listed cable companies, Universal Cables and Vindhya Telelinks and Birla Cable.

That led to the contempt application from the Birla side.

The contempt petitions were heard in March-April 2021 by the Division Bench. The Lodha side said that Thursday’s judgment, as read out in court, held that the court had found no acts of contempt by Lodha and hence the case against him was dismissed.

Lodhas also said that the court found that under the circumstances, there was no case against the directors having “aided and abetted him” and the cases against them were also dismissed.

The latest dispute has its origins in decisions (by majority) made by the court-appointed committee – the Administrators Pendente Lite (APL) to administer the estate of Priyamvada Birla – to not support resolutions pertaining to reappointment of Harsh Lodha as chairman of M P Birla group companies. It was to get the decisions implemented that the Birla side had moved the high court.

Timeline

2020

September 18: Single Bench of Calcutta High Court restrains Harsh Lodha from holding office in M P Birla group entities

October 1: Division Bench declines ad interim stay and clarifies on order

November 5: Harsh Lodha chairs Birla Corporation board meeting

2021

April 22: Contempt applications dismissed by Division Bench of Calcutta High Court

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