w w w . L a w y e r S e r v i c e s . i n



Priyambada Devi Birla & Birla Corporation Ltd. v/s Arvind Kumar Newar & Others


    General Application Nos. 1 & 1735 of 2019, Appeal from Order Nos. 95, 94 & 17 of 2019, APOT. Nos. 134, 137 & 138 of 2019 & Testamentery Suit No. 6 of 2004

    Decided On, 04 May 2020

    At, High Court of Judicature at Calcutta

    By, THE HONOURABLE DR. JUSTICE SAMBUDDHA CHAKRABARTI & THE HONOURABLE MR. JUSTICE ARINDAM MUKHERJEE

    For the Appearing Parties: Ranjan Bachawat, Paritosh Sinha, Sayan Roy Chowdhury, Anubhav Sinha, Manju Bhuteria, S. Chowdhury, Utsab Biswas, Shaunak Mitra, Satyaki Mukherjee, S. Mitra, S.K. Kapur, S.N. Mookherji, Ratnako Banerjee, Vineeta Meharia, Anuj Singh, Aakash Bajaj, Pratik Mukhopadhyay, Vaibhavi Pandey, H.K. Mitra, S. Ghosh, D. Sen, Malay Seal, S.N. Mitra, D.N. Sharma, K. Chowdhury, P. Mukhopadhya, V. Pandey, Anindya Kumar Mitra, Jayanta Kumar Mitra, Partha Sarathi Sengupta, D. Mandal, Sanjiv Trivedi, Iram Hassan, Advocates.



Judgment Text


Arindam Mukherjee, J.

1. In a Testamentary Suit, [TS No.6 of 2004 [Harsh Vardhan Lodha & Ors. vs. Arvind Kumar Newar & Ors.] fiercely contested for over one and a half decade which was initially for grant of probate (with the Will annexed) and now for grant of Letters of Administration(with the will annexed) due to the death of the named executor in between, the defendant nos.1[b] and 1[c] have filed an application being GA No.1735 of 2019, inter alia, for directing the plaintiffs to implement the decision of the APL Committee(Administrator pendente-lite) dated 19th July, 2019 and if necessary to adjourn the Annual General Meeting of Vindhya Telelinks Ltd. [in short, VTL], Universal Cables Ltd. [in short, UCL], Birla Cable Ltd. [in short, BCL] and Birla Corporation Ltd. [in short, Birla Corp.] and issuance of notice, if necessary to the said Companies, Trust and Societies of MP Birla Group as indicated in the schedule to the said application.

2. The said application on being moved an ad-interim order was passed on 2nd August, 2008 wherein the learned Single Judge directed that the APL Committee shall, on urgent basis, take a decision as to who amongst them shall exercise the voting right on behalf of the said Committee with regard to the shares belonging to the estate an held in the Companies of which the Annual General Meeting [in short, AGM] were scheduled to be held pursuant to the notices issued as aforesaid. The learned Single Judge also directed that the election process in such companies shall continue and shall be completed within the time schedule but the result of the election shall not be made publish until expiry of six weeks from the date or without the leave of the Court, whichever happens earlier. Directions for filing of affidavits were also given.

3. The matter upon being mentioned by defendant nos. 1[d] and 1[(c], on 5th August, 2019 it was clarified that the word "election" mentioned in the order dated 2nd August, 2019 shall mean the election in terms of two notices dated 16th May, 2019 another dated 17th May, 2019 and one other notice dated 1st July, 2019 all being part of annexure-F of the said application being G.A. No. 1735 of 2019.

4. It will, therefore, appear from the order dated 2nd August, 2019 as clarified by the order dated 5th August, 2019 that the election result and the voting right on behalf of the APL Committee meant in respect of the Companies, which were holding their respective AGM's pursuant to the notice dated 16th May, 2019, 17th May, 2019 and 1st July, 2019 which meant VTL, UCL, BCL and Birla Corporation.

5. It will also appear from the order dated 2nd August, 2019 that the plaintiffs have taken out two applications, one being GA No.1761 of 2019, inter alia, challenging the decision taken by the APL Committee by majority on 19th July, 2019. This application was in the list on 2nd August, 2019. The other application was, however, not in the list on that day.

6. The said two orders respectively dated 2nd August, 2019 and 5th August, 2019 are challenged in APO No.94 of 2019 filed by BCL and in APO No.17 of 2020 by VTL before us.

7. Subsequently, defendants nos. 1[c] and 1[d] took out another application being GA No.1845 of 2019 in GA No.1735 of 2019 for further orders in aid of the reliefs claimed in GA No.1735 of 2019. In the said application being GA No. 1845 of 2019 filed in GA No.1735 of 2019 a further order was passed on 9th August, 2019 by the same learned Single Judge who passed the previous two orders.

8. It will appear from the said order dated 19th August, 2019 that the ambit of the order dated 2nd August, 2019 read with order dated 5th August, 2019 was further extended to include the "result of the election and/or voting" scheduled to be held on 13th August, 2019 pursuant to the notice dated 1st July, 2019 and the same shall not be published as indicated in the original order dated 2nd August, 2019. The notice dated 1st July, 2019 and the AGM scheduled to be held on 13th July, 2019 was that of Birla Corp. This order is challenged by Birla Corp. in APO No.95 of 2019.

9. Records reveal that none of the appellants are parties to the above Testamentary Suit. Therefore, the appellants prayed for leave to appeal as "person aggrieved" to prefer their respective appeals as aforesaid. We being prima facie satisfied about the appellants' right to prefer their respective appeals granted each of them the leave to file their respective appeals. The stay applications filed in each of the appeals were disposed of.

10. We felt that passing of any interim order in the aforesaid three appeals may be construed as allowing the appeals while disposing of the stay applications. We, therefore, by consent of the parties, decided to hear the three appeals on the basis of the papers annexed to the stay applications as we were told that all documents before the learned Single Judge were annexed to the stay petitions filed in each of the appeals. We also, with the consent of the parties, decided to hear out the three appeals as aforesaid, altogether as we found the three orders being the subject matter of the three appeals to be interlinked and arose out of the application being GA No.1735 of 2019 and interim application being GA No.1845 of 2019.

11. The respondent nos. 1 and 2 have filed several compilations before us mostly containing orders passed in various proceedings arising out of the Testamentary Suit by this Court or in offshoot proceedings wherein orders have been passed by CLB and appeals arising therefrom. We have considered such orders contained in different volumes of the compilations as referred to by the parties at the time of hearing.

B) Submission of the appellant, Birla Corp. in APO No.95 of 2019 :

1) The appellants say that they have challenged only the order dated 9th August, 2019 because the incorporation of the words "result of election and/or voting" prejudiced its rights. The appellants say that in the AGM scheduled to be held on 13th August, 2019 pursuant to the notice dated 1st July, 2019 there were several agenda, few of which involved election but all of them required voting. In the initial order dated 2nd August, 2019 as clarified by the order dated 5th August, 2019 the results of the election were directed not to be published for a period of six weeks or without the leave of Court, whichever was earlier. This did not include the publication of the result as to the votes casted at the AGM with regard to the agenda which did not include election. By including the word 'voting' in the order dated 9th August, 2019 prevented Birla Corp. from publishing the result as to the agenda which did not include voting. The entire affairs of the Company has been stalled by the order which prevented from publishing the results in respect of those agenda which did not require election. This meant that the Company cannot even declare dividend or pay such sum to its shareholders/members. The appellant, Birla Corp. is a Public Limited Company listed with the Stock Exchanges. As the appellant is unable to declare the dividend being an issue which does not require election, the appellant is receiving complaints from the shareholders/members regarding the declaration and payment of dividend. The appellants say that in respect of Birla Corp. there is no election or re-election of Harsh Vardhan Lodha (in short 'HBL'), the plaintiff no.1 as a director and, as such, there is no question of holding any election in its AGM in this regard, the result of which was directed not to be published for six weeks or without the leave of the Court by the order dated 2nd August, 2019.

2) The appellant say, it is the prime allegation of the respondent nos. 1 and 2 (defendant Nos. 1[c] and 1[a]) that HBL by getting himself re-elected and thereby receiving fancy remuneration is depleting the value of the estate, cannot be the case in Birla Corp. It is also submitted that the respondent nos. 1 and 2 were not satisfied with the order dated 2nd August, 2019 and, as such, obtained the classification on 5th August, 2019. Finding that the classification will be of no help in respect of Birla Corp. the further modification was obtained on 9th August, 2019 behind the back of the appellant. The appellant was apparently not effected by the order dated 2nd August, 2019 as clarified by the order dated 5th August, 2019 which was restricted only to the publication of the results of the election and, as such, the appellant did not prefer any appeal against the said two orders. So far as directors remuneration is concerned, the appellant says that the APL committee will be voting at the AGM in respect of shares of the deceased. If the said shares in effect control the majority shares in the Birla Corp. as alleged by the respondents nos.1 and 2, then such agenda will be defeated by majority votes. In view of the check guard such action will in no way cause any prejudice to the respondent nos. 1 and 2 as payment to HBL is not easily possible so as to deplete the share value or the value of the estate as alleged by the respondents no.1 and 2.

3) The appellants further submit that the order dated 9th October, 2019 is without any reason. A Court is bound to give reasons when it grants an ad-interim order, particularly when the same is an ex parte order. Birla Corp., the appellant is not a party to the Testamentary Suit. The name of Birla Corp. does not figure in the Master's Summons being the application and the affidavit in support thereof affirmed on 31st July, 2019 as also in the supplementary affidavit filed in the said application. Birla Corp. was not before the Court or heard while passing the order dated 2nd August, 2019. The order dated 2nd August, 2019 was passed in their absence. They were only served with an order dated 2nd August, 2019 wherein the returnable date was 30th August, 2019. Birla Corp. was not served with any mentioning notice pursuant to which the matter was mentioned on 5th August, 2019 and clarification was obtained. The Master Summons in respect of the application being GA No. 1845 of 2019 filed in GA No.1735 of 2019 was not taken out as against the appellant Birla Corp. and the same was also not served on Birla Corp. and, as such, the orders dated 2nd August, 2019 and 5th August, 2019 as also the order dated 9th October, 2019 should be construed as ex parte ad-interim order so far it relates to Birla Corp. At all the stages the plaintiffs were before the Court. The Plaintiffs' case like Birla Corp. and as such cannot espouse the cause of the companies like Birla Corp. Having not given any reason the order dated 9th August, 2019 passed by the learned Single Judge is not sustainable and requires to be interfered with. In support of the proposition that reasons are mandatory in an ex parte ad-interim order, the appellant has cited the following decisions :

[i] [2010] 3 SCC 732 [paragraphs 40-41];

[ii] 2000 [1] CHN 614 [paragraphs 21-36, 32] ; and

[iii] 2014 SCC OnLine Cal 10452 [DB] [paragraphs 17, 19, 24-27].

4) The appellant submit that it is bound by the order dated 9th August, 2019 which prejudicially affects its right, and, as such, it is a "person aggrieved". The appellant, is, therefore, entitled to file and maintain the appeal.

5) The appellant say that in a suit no order can be passed against a third party. Since Birla Corp. is not a party to the subject Testamentary Suit no order as an interim relief in aid of the final relief in the suit can be passed against them. The impugned order, therefore, has to be interfered with on this count. In support of this submission, the appellant has cited a decision reported in [2016] 1 SCC 743 [paragraphs 24, 25 and 28].

6) The appellant then submit that the application being GA No.1845 of 2019 on which the impugned order dated 9th August, 2019 was passed is an application for review in the grab of a modification application which is impermissible in law. The appellants say that the order dated 2nd August, 2019 as clarified by the order dated 5th August, 2019 was only related to the publication of the results of election. The respondent nos.1 and 2 being the defendant nos.1[d] and 1[c], who had made the application being GA No.1735 of 2019, on 5th August, 2019 at the time of seeking clarification of the order dated 2nd August, 2019, did not seek inclusion of the words "result of the election and/or voting", which they sought for by the interim application being GA No.1845 of 2019. The application being GA No.1845 of 2019, therefore, in effect and substance is an application for review. In support of this contention the appellant has relied upon two decisions, one reported in [2004] 12 SCC 706 [paragraphs 14-17, 19-23] and [2004] 5 SCC 353 [paragraph 4].

7) The appellant further raised the question of jurisdiction of a probate Court. It was submitted that the probate Court has a limited jurisdiction and does not decide the question of title with regard to the properties, both movable and immovable comprising the estate and the subject matter of the Will. The probate Court only decides whether the Will is a genuine will which obviously includes the testamentary capacity of the testator/testatrix, due attestation, and whether the subject Will is tainted with any suspicious circumstance or a product of forgery, coercion, undue influence, fraud, that is, its validity. The Probate Court could not have passed orders which binds the companies whereas the estate holds share and interfere with the functioning of such companies by regulating its AGM and publication of the results. In support of this submission, the appellant cited two decisions reported in [2008] 4 SCC 300 [paragraph 57] and [2007] 11 SCC 357 [paragraphs 6-8, 11-12].

8) The appellant further raised the question that no relief which is not in aid of the final reliefs claimed in a suit can be claimed. The appellant says that in the Testamentary Suit, the Court would decide only genuineness of the Will and grant or refuse the grant of the Letters of Administration as claimed. There is no scope of passing orders involving a Company wherein the deceased held shares during her lifetime which is now part of the subject estate. The appellants says that Priyamvada Devi Birla [in short, PDB], the deceased only hold about 12.58 of shares in the appellant Company. The deceased, therefore, was only a shareholder and had the right to participate in the election and entitled to dividend. Administrator pendente lite (ABL Committee) has been appointed to preserve the estate. There is as such no question of meddling with the said shares. The ABL Committee had already decided to vote in respect of the said shares by a majority decision and, therefore, could resist the various agenda at the AGM by casting the votes commensurate to such shareholding at the instance of the said respondents if the ABL Committee was satisfied that the estate will be depleted. The respondents have also claimed to be in control of about 98% shares in the Birla Corp. So, it was not difficult to defeat any agenda to the disliking of the respondents no.1 and 2. The probate Court at the instance of the respondent nos.1 and 2 have interfered with the functioning of the Company being a separate juristic entity. In this context, the appellants have cited a judgment reported in AIR 1952 SC 12 [paragraph 6]. The appellants also say that a shareholder has no right in the assets of the Company and, as such, the deceased being a shareholder had no right in the assets of Birla corp. In support of this, the appellant has cited a judgment reported in AIR 1955 SC 74 [paragraph 7].

9) The further submission of the appellant is that the shareholders cannot direct the Company or its directors and, as such, Courts do not have any power to direct the Board of the Directors of the Company at the instance of the said respondents. The probate Court in securing the shares being the subject matter of bequeath under the Will, therefore, also cannot pass directions in like manner to interfere with the AGM of a company wherein the estate holds shares. This is also a fact, even if, the Company involved is a Government Company, though Birla Corp. is not a Government Company. In this regard, the appellant has cited two decisions, one reported in AIR 1986 SC 1370 [paragraphs 97-97] and the other reported in [1982] 1 SCC 125 [paragraph 21]. The appellant has also submitted that the petition does not contain any ground alleging that the resolutions in the notice dated 1st July, 2019 are illegal and there is no supportive evidence even to, prima facie, establish the same.

10) Moreover, the balance of convenience is not in favour of the respondent nos.1 and 2 for grant of any ad-interim order in their favour. Birla Corp. is a Public Limited Company wherein the public shareholding and institutions, investors own a large percent of shares. The market price of the shares largely depend on dividend declared by the company. Birla Corp. is a dividend payee Company for many years. If the dividend is not declared and amounts in respect thereof are not paid to the share-holders, the market value of the shares in Birla Corp. is likely to get reduced and thereby prejudice the Company. In fact, value of the shares held by the estate may also diminish for this reason. The grant of ad-interim order will also carry a negative perception against the Company without any fault of its which will further prejudice the Company, as this may decrease trading of shares of Birla Corp. Particularly when, there is no allegation that the Company has done anything illegal or impermissible, the interference of this nature is uncalled for.

11) The appellant, therefore, sought for the order impugned to be set aside.

C) Submission of VTL and UTL :

1) The appellant in the other two appeals respectively being APO No.94 of 2019 [In the goods of Priyanbada Devi Birla and Birla Cables Ltd. vs. Arvind Kumar Newar & Ors.] and APO No.95 of 2019 [In the goods of Priyanbada Devi Birla and Birla Corporation Ltd. vs. Arvind Kumar Newar & Ors.] have adopted the submissions made by Birla Corp. In APO No.95 of 2019 on the ground of jurisdiction, order devoid of reasons and maintainability of appeals and sought for interence to the orders impugned. Save and except that in VTL and BCL there is an agenda of re-election of HBL as a director, the theme of the notices issued to hold AGM in VTL and BCL are the same according to the said appellants. It also submitted that though there is no restraint as to the publication of the results of voting in respect of the agenda which does not include election in the case of VTL and BCL but the order dated 2nd August, 2019 as modified by the order dated 5th August, 2019 has prejudiced their interest and as such they have appealed against such order. The order dated 9th August, 2019 though was not necessitated in the facts of the case but they are not directly effected by such order.

2) The main thrust as against the order dated 2nd August, 2019 as clarified by the order dated 5th August, 2019 are as follows:-

i] Without jurisdiction;

ii] Without reasons, though it was mandatory to give reasons;

iii] No order can be passed against a third party in a suit;

iv] Reliefs claimed are not in aid of the final reliefs claimed in the suit;

v] Shareholders have no right in the assets of the Company;

vi] Shareholders cannot direct the Company or its Directors hence, the Courts do not have the power to direct the Board/Director. Therefore, probate Court also does not have the jurisdiction to pass the order impugned;

vii] No ground in the application that the resolutions in the notice in holding AGM are illegal;

viii] The balance of convenience is overwhelmingly tilted in favour of the appellant and, as such, the order impugned should not have been passed.

In respect of the above issues VTL and BCL have adopted the submissions made by Birla Corp. in APO No.95 of 2019 by relating them to the order dated 2nd August, 2019 as clarified by the order dated 5th August, 2019. They have also relied upon the same set of judgments as referred to by Birla Corp.

D) Submission of the respondent nos.1 and 2 : (Defendant nos. 1(c) and 1 (d) being the applicant)- hereinafter referred to as the "said respondents".

1) The respondents have raised a preliminary objection as to the maintainability of the three appeals. They say that the orders impugned does not in any way effect any of the appellants. The appellants, therefore, cannot be said to be a "person aggrieved". There is no legal grievance or wrongful deprivation of any right of the appellants by the impugned orders so as to make them "person aggrieved". Not being a 'person aggrieved', the appellant cannot maintain their respective appeals. In this context, the said respondents relied upon a judgment reported in AIR 1971 SC 385 [paragraphs 6, 12-17] and another reported in AIR 2009 SC 1989 [paragraph 8].

2) The said respondents then submit that HBL is the main man behind the three appellant companies. He being the plaintiff no.1 was before the Court when the orders dated 2nd August, 2019, 5th August, 2019 and 9th August, 2019 were passed. Having failed to resist the order, HBL has set up the Appellant companies to challenge the orders which is impermissible in law. This is also an abuse of process of law. The Court, therefore, should lift the corporate veil and see that who is the actual person behind these appeals. HBL is actually the person effected and as such is trying to get out of the shackles by preferring the appeals through the alter ego, the appellant companies. The said respondents also submitted that a probate Court is empowered to lift the corporate veil to identify the actual face behind the fa ade (in these cases HBL). The real facts will be then revealed. In this regard they cited a judgment reported in 2008 [3] CHN 384 [paragraphs 2, 4-5, 7-9, 20-21, 25, 27-34].

3) The said respondents further submit that the purpose of passing an interim order was to preserve the status quo so that the proceedings are not rendered infructuous when the matter is finally decided. They say that the plaintiffs in the suit are trying their best to meddle with the assets of the estate on diverse pretexts despite there being an administrator pendente lite (being the ABL Committee) appointed. The value of the estate will be diminished if the plaintiffs and in particular HBL are allowed to operate these Companies on their own whims which they are doing at the present. If re-election of HBL takes place and he is allowed the remuneration as proposed the same will adversely effect the amount left out of dividend that may be ultimately declared. Since the same will reduce the amount of money that will be left for paying the dividend for the shares comprised in the estate such share value will be diminished. As the value of the shareholding being the subject matter of the Estate is likely to go down for this reason it will adversely affect the estate by diminishing its value which the Probate Court is entitled to protect by passing necessary orders. The remuneration proposed to be given to HBL as a Director will reduce the profits of the Company and in effect will leave the Company with lesser sum to be distributed as dividend amongst the shareholders. This is likely to effect the share price of the companies apart from reducing the amount of dividend, which will be awarded in respect of the shares being the subject matter of the estate. The said value of the estate will, therefore, also get reduced on both counts. The estate by holding about 12.58% of shares in Birla Corp. in effect controls about 98% of the shares in Birla Corp. HBL being in control of the said Company is trying all means to reduce the pervasive control, the deceased had over Birla Corp. and other companies through the shares held by her being the subject matter of the estate bequeathed under the Will. This in effect would have a wider ramification causing adverse effect to the real value of the estate it commands for these reasons. The learned Single Judge, was, therefore, right in passing the order impugned dated 9th October, 2019 so far as Birla Corp. is concerned and the other two order in respect of the other appellants. This was rightly done to preserve the status quo finding the conduct of the plaintiffs, particularly HBL as enumerated in the applications wherein the said orders were passed. On the issue of passing an interim order when status quo has to be preserved till the matter is finally decided to avoid the proceedings to be rendered infractuous, the said respondents have cited two judgments, are reported in 1982 Supp. 2 SCC 651 [paragraph 126] and the other reported in [2004] 4 SCC 697 [paragraphs 11-12 and 16].

4) The said respondents next submitted that there are sufficient and satisfying reasons contained in the order impugned. In any event, assuming without admitting that there are no reasons in the order then also failure to give reasons solely would not be the ground for setting aside an order. It is submitted that a Judge of a Chartered High Court like that of our High Court, derives His/Her authority under the Letters Patent and the rules framed in terms of the provisions of section 122 of the Code of Civil Procedure, 1908. He or She does not exercise the jurisdiction or derives source of power only under the Code. A Judge of a Chartered High Court, therefore, enjoys a privilege and is not required to assign any reason in respect of all orders passed, if the order otherwise demonstrate consideration of materials on record and subjectively satisfy the conclusion drawn therefrom. This is apart from the fact that there are reasons apparent on the face of the orders impugned and is inconsonance with the materials available before the learned Single Judge at the time of passing the orders impugned. In any event, if the appellate Court is satisfied from the records that the orders impugned were passed after considering the materials available before the learned Single Judge and, as such, there is subjective compliance then the Appellate Court should either uphold the order or may even supplement its findings based on the materials on records on being satisfied that the end result is sustainable. In this regard, the appellant has cited two Division Bench judgments of this Court, are reported in 1999 [2] CLT 347 [paragraphs 22-33] and the other reported in 2012 [3] CHN 172 [paragraph 26]. [In which one of us Dr. Sambuddha Chakraborty was a party].

5) The said respondents then say that a Court does not become incompetent to grant an interim order merely because a question of jurisdiction is raised. It is submitted that the jurisdiction of the probate Court being raised by the plaintiffs at the time of passing the order dated 2nd August, 2019 or at the time of passing the order dated 9th August, 2019 (on another ground) did not disentitle the learned Single Judge from passing the impugned order as the learned Single Judge was satisfied after considering the materials before him that an order is needed to preserve the status quo and only thereafter passed the impugned orders. The learned Single Judge has kept the issue of jurisdiction live for being considered later on after completion of affidavits. In this context, the said respondents have cited a judgment reported in [1997] 3 SCC 443. [paragraph 15 and 16].

6) The respondents in order to sustain the orders have also relied upon the decisions taken by the APL Committee from time to time and the letters issued by such Committee to the appellant companies much prior to passing of the impugned orders. It is submitted that in the past the appellants here in terms of the directions given by APL Committee supplied detailed particulars and materials. The appellants were not parties to the said suit even at that time, but had accepted the orders passed by the APL Committee and had acted in terms thereof. The appellants were all along aware of the proceedings but still tried to hold AGM to satisfy the lust of HBL in the manner complained of. The appellant now cannot resile out and say that they are the third party to the suit and no order can be passed against them being a third party or contend that they should not be made bound by any order passed in the Testamentary Suit on the ground of either jurisdiction or being a third party to the suit against whom no orders cannot be passed. According to the said respondents, assuming without admitting that the probate Court does not decide the title then also in view of the fact that sufficient materials being made available before the learned Single Judge the order impugned are justified in the fact situation alleged and requires no interference.

7) The respondent nos.1 and 2 also submitted that they are entitled to file a separate suit for declaration before a competent Civil Court or even maintain an application for oppression and mismanagement before the National Company Law Tribunal [In short, NCLT] under the Companies Act. It is submitted that as a legatee the respondents/defendants are jointly entitled to 12.58% shares of and in Birla corp. and more than 10% in VTL and BCL, the other appellants being the shares belonging to the deceased. Even if, the testamentary suit fails or is decreed against them, the said respondents have a claim in respect of title of such shares which is more than 10% being the shareholding necessary to maintain such an action for oppression and mismanagement. Moreover, in the event the suit fails the respondents/defendants jointly are entitled to such 12.58% of shares of and in Birla Corp. and shares in VTL BCL, as such, till the suit is decreed in either way the said shares are required to be protected. This can be done by interfering with the affairs of the said companies operated at the whims of HBL.

8) It is further submitted that in view of an earlier order dated 10th May, 2013 [at pages 59 to 82 of the compilation (Vol-II) filed by the said respondents] passed in an appeal preferred under the provisions of Section 10F of the Companies Act, 1956 against an order passed by the Chairman, Company Law Board [in short, CLB] dated 9th February, 2019 there is a specific finding that the jurisdiction to decide as to the rights flowing from the shares owned by PDB of and in various Companies has largely shifted from the domain of CLB to the Probate Court and the Court for trial of the suits. Relying upon such finding the said respondents in order to counter the submission of the appellant that the probate Court had no jurisdiction to issue orders as claimed by the respondent nos.1 and 2, the said respondents submit that the probate Court had the jurisdiction to pass the order impugned.

E) Reply of Birla Corp. :

1) It is submitted by Birla Corp. that after the order of CLB dated 25th April, 2005 (Serial No. 1 of vol. II of respondents' compilation) and the order dated 24th August, 2005 passed by the Court in an appeal arising out of CLB's order, another order was passed in probate jurisdiction by this Court on 11th October, 2007 which is reported in ILR (2007) 2 Calcutta 377 (in paragraph 301 of the said reported judgment) the controlling block of the deceased and / or her estate is as disclosed in the affidavits of assets. The affidavit of asset disclosed by the plaintiffs in their suit as well as that of Birla's in their suit contain the same items. The two affidavits of assets does not include the shares owned in third party companies. In the subsequent judgment and order of a Division Bench of this Court dated 23rd August, 2012 (serial no. 3 of vol. III of respondents' compilation) does not anywhere specify the control of PDB over MP Birla Group of Companies as claimed by the said respondents. The probate Court, therefore, should not take into account such alleged control asserted by the said respondents in the third party companies. The unanimous inventory/report of the APL Committee dated 15th October, 2013 expressly say that the estate of PDB comprises of the assets as enumerated in the respective affidavit of assets of the two erring groups. The Court exercising probate jurisdiction therefore cannot interfere with the affairs of the third party companies only because a pervasive control is alleged.

2) The jurisdiction issue raised by the plaintiffs have remained undecided due to dilatory tactics adopted by the said respondents. Attempts were made to distinguish the judgments relied upon by the appellants of which we also took note of.

F) Findings :

1) The three appeals are against ad-interim orders when only the parties to the testamentary suit were present before the Court. So far as the appellants are concerned, the orders can be construed as ex parte ad-interim orders as they are neither parties nor were served with the notice and copy of the application or were heard before passing of such orders.

2) The scope of an appeal in respect of an ex parte ad-interim order or an ad-interim order is very limited. The Appellate Court normally does not interfere with such orders unless such order is either perverse or bare errors apparent on the face of such order or when there is inherent lack of jurisdiction of the Court or contains apparent parent illegality.

3) So far as an ex parte ad-interim or interim order are concerned a party aggrieved may either approach the Court passing such order by filing an application for modification or variation of the order before the Court passing it or can prefer an appeal against such order.

4) Being mindful about the scope of the appeal we cautioned the parties to restrict their submission only in respect of the grounds that can be agitated in an appeal from an ad-interim order or an ex parte ad-interim order. However, despite our best endeavor, the parties entered into the controversies relating to the merits of the matter. The respondent nos.1 and 2. in order to sustain the order on the ground that the same is based on the materials available before the Court referred to several documents viz. the minutes of the APL Committee, its direction and compliance particularly to show the conduct of the plaintiff and that the appellants are nothing but the alter ego of the plaintiffs. This expanded the scope of the submission of the appellant in reply while dealing with such points.

5) We, however, did not allow the other respondents being the plaintiffs in the Testamentary Suit to make any elaborate submission though they are entitled to either support or object to the order under the provisions of Order 41 Rule 22 of the Code of Civil Procedure, 1908 even without filing an appeal so that the scope of the appeal is not further expanded particularly when the plaintiffs have themselves not filed any appeal which they were entitled to do due to refusal to pass any order in their application being GA No.1761 of 2019. We, however, noted the objections raised by the plaintiffs before the learned Single Judge.

6) Considering the submissions made by the appellant and the respondent nos.1 and 2 and the objections raised by the respondents/plaintiffs before the learned Single Judge, we find that the following broad issues are required to be answered which we do as hereunder.

a) Person aggrieved and the appellant's right to maintain the appeals: The respondent nos.1 and 2 have relied upon the judgment reported in AIR 1971 SC 385 to contend that to maintain an appeal the order must cause the person a legal grievance caused by wrongfully depriving him which goes to the root of the jurisdiction of the Judge. In the instant case, according to them, none of the appellants have been wrongfully deprived of anything which will cause them a real grievance thereby entitling them to maintain the appeal. It will appear from paragraph 23 of the said judgment that the Hon'ble Supreme Court relied on a dictum that if a person is brought before the Court to be bound by the order is a "person aggrieved". The appellants are not parties to the proceedings or were heard before passing of the orders impugned but by the order they are brought before the Court and are bound by the orders. They are, as such, "person aggrieved". The other judgment cited by the respondents on this issue reported in AIR 2003 SC 1989(paragraph 8) is on the general principles and needs no detailed discussion at this stage. However, the said respondents have cited a judgment reported in 1997 (3) SCC 443, which says that even if it is found at the end that the Court did not have the jurisdiction to hear a particular matter or pass any order therein then also an ad-interim order passed in such a proceeding is binding and on its violation proceedings under Order 39 Rule 2A of the Code can be initiated and the persons violating the orders to be punished. The appellants are not parties to this proceeding but they are bound by the orders dated 2nd August, 2019 as clarified by the order dated 5th August, 2019 and the order dated 9th August, 2019. If at the end it is found that the probate Court did not have the jurisdiction to pass such orders then also according to the said judgment, the appellants can be hauled up in contempt for violating the said orders or directions given therein. In such a situation the appellants should have an avenue to ventilate their grievances. We are, therefore, of the opinion that the appellants are "persons aggrieved" and are entitled to file and maintain their respective appeals.

b) Jurisdiction :

1) A testamentary suit is different from a suit of civil nature. A suit of civil nature is defined in Section 9 of the Code to be a suit in which right to property or an office is contested. This is not a testamentary suit where genuineness of the Will is decided. A suit of civil nature is commenced with the filing of a plaint as provided in Order IV Rule 1 of the Code. The various forms of suits are described in Appendix- A of the First Schedule of the Code. In a suit of civil nature there are two types of jurisdiction involved, one being the pecuniary jurisdiction and the other the territorial jurisdiction. Excepting suit of which their cognizance is either expressly or impliedly barred, Courts have the jurisdiction to try all suits of civil nature. Section 6 of the Code defines the pecuniary jurisdiction whereas Sections 16 to 20 governs the territorial jurisdiction. Section 15 of the Code specifies that every suit should be instituted in the Court of lowest grade to try it. In case of a Chartered High Court like that of ours, the jurisdiction in case of civil suit is exercised under Clause 12 of Letters Patent, 1865.

2) Testamentary suit, on the other hand, comes into being in the event an application for grant of probate or letters of administration filed under the provision of Section 276 of the Indian Succession Act, 1925 (hereinafter referred to as the Act of 1925) or an application for letters of administration filed under Section 278 of the Act of 1925 is objected to and such application is declared to be a contentious cause. Then the application for grant of probate or letters of administration is treated as the plaint and the objection as a written statement and the matter is tried as far as practicable as a suit. The provision of the Code and the Original Side Rules of this Court are applicable for procedural purpose in case of trial of the suit. There is no pecuniary jurisdiction as to a testamentary suit. The territorial jurisdiction is governed by the place of residence of the deceased and the location of the properties comprising the estate of the deceased. The High Court exercises concurrent jurisdiction with the District Judge under Section 300 of the Act of 1925. Our Court being a Chartered High Court exercises jurisdiction under Clause 34 of Letters Patent, 1865 and Section 300 of the Act of 1925. In case of a person who had his residence within the ordinary original civil jurisdiction of this Court and all properties are within such jurisdiction, the City Civil Court at Calcutta exercises jurisdiction under Section 5(3) of the City Civil Court Act, 1953 and the second schedule thereto.

3) On a perusal of the order dated 2nd August, 2019 when only the plaintiffs and the defendants in the above Testamentary suit were present before the Court, the issue as to whether a probate Court in exercise of its power under section 247 of the Act of 1925 could interfere with the AGM of the Companies in question as prayed for in the Master's Summons. This point was raised by the plaintiffs and several decisions for and against were cited. The issue raised was, therefore, inherent lack of jurisdiction of the Probate Court to pass orders interfering with the AGM's of the Companies and their functioning wherein the deceased held shares and now forms part of the estate. It is, therefore, not an issue as to territorial or pecuniary jurisdiction but goes to the root of the jurisdiction of the Court to pass orders. Similar to specific bar of institution of suit of civil nature as specified in Section 9 of the Code.

4) The jurisdiction of a Court as held in [Anisminic Ltd. vs. The Foreign Compensation Commission & Anr., (1969) 1 AllER 208] and relied upon [M. L. Sethi vs. R.P. Kapur, (1972) AIR SC 2379] has been held is a verbal coat of many colours, jurisdiction originally seems to have had the meaning to entitle to enter upon an inquiry in question. These two judgments have been referred to at paragraph 18 of the decision reported in 2001 CHN 614 Supratik Ghosh [supra] cited by the appellant for the purpose [reasons to be provided in an ex parte ad-interim order]. The issue raised, therefore, involved an inherent lack of jurisdiction of the probate Court to interfere with the Company wherein shares were held by the deceased PDB. Such an issue of inherent jurisdiction had to be decided at the threshold without leaving it to be decided later as done in many cases when objection is taken on pecuniary and territorial jurisdiction and passing ad-interim orders. The learned Single Judge leaving the issue to be decided later on after considering in detail the material disclosed in all the applications filed both by the plaintiffs and the defendants along with supporting documents thereto erred in law. The learned Single Judge could not have passed the directions contained in the said order dated 2nd August, 2019 which binds the Companies which are not even parties to the suit without first deciding upon his jurisdiction. The issue of inherent lack of jurisdiction is a point of law which does not require detailed enquiry by inviting affidavits. In any event, the plaintiffs' application being GA No. 1761 of 2019 was in the list. The learned Single Judge could have easily treated such application as plaintiffs' objection on the ground of jurisdiction and decided the same. A probate Court apart from appointing an Administrator pendente lite under the provisions of Section 247 of the Act of 1925 can grant injunction as held by a Division Bench of this Court in a judgment [Atula Bala Dasi & Ors. vs. Nirupama Devi & Anr., (1951) AIR Calcutta 561] to protect the estate. In paragraph 8 of the said report following another judgment of this Court [Barani Devi vs. Chamatkarini Devi,1919 CalWN 205] the Division Bench held that the probate Court under section 247 of the Act of 1925 cannot obviate the difficulties or protect the properties, the powers of that Court are wide enough to issue temporary orders restraining other persons from interfering with the properties, which are the subject matter of testamentary disposition. It was also clarified in the said paragraph of the report the distinction between a civil suit and a testamentary suit. It has also been clarified in the said report that in extreme cases such order of injunctions are to be passed. The learned Single Judge, therefore, was entitled to pass orders of injunction only in an extreme case while exercising probate jurisdiction in respect of the properties involved in the testamentary suit after satisfying himself. It was, therefore, incumbent upon the learned Single Judge to first decide on his jurisdiction when an issue of inherent lack of jurisdiction as to the Court passing orders with regard to the third parties (Companies) to the testamentary suit in which the estate holds share was pointed out which goes to the root before passing such an order of injunction which can be done in only extreme case.

5) We have also considered the order dated 10th May, 2013 relying upon which the said respondents have contended that the Probate Court should decide all issues as to control of the shares comprised in the estate and its effect with regard to the third party companies wherein such shares are held. We could not gather from such judgment any convincing finding to this effect. We, therefore, reject such contention of the said respondents.

c) Reasons to be contained in an ex parte ad-interim order/ad-interim order:

1) Reasons have been defined in the judgment reported in AIR 1974 SC 87 as links between the materials on which certain conclusion are based and the actual condition. Thus, a judgment, if not based on the material that is before the Court which forms the link is absent, it may be termed as a perverse one. In the instant case, the appellant has cited three judgments in support of the contention that an ex parte ad-interim order should mandatorily contain reasons. The appellant say that the order is an ex parte order as against themselves as they were not served by the respondent nos.1 and 2 [the applicants before the learned Single Judge] or asked by the Court to be present before the Court at the time of passing the orders. The appellants, therefore, were neither heard nor were given an opportunity to present their case before the three orders were passed which bind the appellants. The order is an ex parte ad-interim order against a third party to the testamentary suit. By relying upon a judgment reported in [2010] 3 SCC 732 [paragraphs 40-41] the appellants say that reasons are mandatory and no order could have been passed particularly in testamentary jurisdiction. The initial order dated 2nd August, 2019 as clarified by the order dated 5th August, 2019 and the order dated 9th August, 2019 are devoid of reasons, which is contrary to the ratio laid down by the Hon'ble Supreme Court and, as such, the said order are liable to be set aside on that ground alone. The appellants then cited the judgment reported in 2000 [1] CHN 414 wherein a Division Bench of this Court following the judgment of the Supreme Court [Shiv kumar Chadha vs. Municipal Corporation of Delhi & Ors., (1993) 3 SCC 161] and [Morgan Stanley Mutual Fund vs. Kartick Das, (1994) 4 SCC 225] held that reasons are mandatory. The appellants thereafter relied upon a Division Bench judgment of this Court in Binod Khanna vs. Sunny Sales,2014 SCCOnLine(Cal) 10452 to show that reasons are to be given by the Court while passing ex parte ad-interim order. In the judgment of Binod Khanna [supra], a Division Bench judgment of this Court [The Bengal Club Ltd. vs. Susanta Kumar Choudhary, (2003) AIR Calcutta 96] has been considered. In the Bengal Club judgment the Division Bench apart from considering the Division Bench judgment [Sm. Muktakesi Dawn & Ors. Vs. Haripada Mazumdar & Anr., (1988) AIR Calcutta 25] have considered the two Supreme Court judgments Shiv Kumar Chadha [supra] and Morgan Stanley [supra] and held that assigning reasons by a Court while passing an ex parte ad-interim order is mandatory.

2) In order to counter the appellants, the respondent nos.1 and 2 have cited two judgments [NEPC Micon Ltd. vs. Magma Leasing Ltd., (1999) 2 CalLT 347] and [Bhaskar Gayen vs. Subhodip Mullick & Ors., (2012) 3 CalHN 172] [in which one of us, Dr. Sambuddha Chakraborty was a party] to contend that failure to give reasons solely would not be the ground for setting aside an ex parte ad-interim order or an ad-interim order. After perusing the judgment in NEPC Micon [supra] we find that the same has been delivered in the context of an order passed by a judge of a Chartered High Court. Relying upon Muktakeshi Dawn [supra] the Division Bench held that reasons are not mandatorily required to be given by a judge of a Chartered High Court since it is exercising jurisdiction under clause 15 of the Letters Patent, 1865 and not under Order 41 of the Code. One should keep in mind that the ex parte ad-interim or an ad-interim order of injunction is passed in exercise of jurisdiction under Order 39 Rules 1 and 2 and, as such, other provisions of the said Order 39 are required to be also complied with particularly in view of the difference between a civil suit and a testamentary suit as included in AIR 51 Cal 561 (supra). The appellants have relied upon Bhaskar Gayen [supra] to show that if the Appellate Court is satisfied from the order impugned that the same contains reasons, the Appellate Court can always sustained the said order. The respondent nos. 1 and 2 have relied upon several documents annexed to the petition to show that the orders contain reasons and the Appellate Court should otherwise be satisfied and sustained the order.

3) In NEPC Mecon reliance had been placed on Muktakeshi Dawn but the subsequent judgments, i.e., Bengal Club [supra] and Binod Khanna [supra] have considered Muktakeshi Dawn and has rejected the findings arrived thereat. In fact, in Binod Khanna(supra), NEPC Mecon(supra) has been specifically considered. After considering the Supreme Court judgments in Shiv Kumar Chadha and Morgan Stanley and the two subsequent judgments of the Division Bench in Bengal Club [supra] and Binod Khanna [supra], we are unable to accept the ratio laid down in NEPC Mecon.

4) We hold that a judge of a Chartered High Court does not enjoy any privilege of not assigning any reason while passing an ex parte ad-interim order or an ad-interim order.

5) There is no dispute as to the ratio laid down in Bhaskar Gayen's case.

The Appellate Court will be well within its jurisdiction if it finds that the materials disclosed before the learned Single Judge were considered and the order impugned read as a whole satisfies the test laid down in the various judgments of the Supreme Court referred to hereinabove. In that case, the Court was considering an order in writ appeals which may not be in the same footing as in case of a civil matter. The parameters for granting interim relief in aid of mandamus or any other writ is not the same as an injunction in a civil case, particularly when, the Court is exercising probate jurisdiction. The Division Bench, in that case, found that there were reasons which satisfied the Division Bench and, as such, the order impugned therein was upheld. The Civil Procedure Code, 1908 in Order 41 Rule 22 has given the authority to the Appellate Court even can supplement reasons when the appellate Court finds that on the basis of the materials on record placed before the learned Trial Judge the end result is correct.

6) Reading the order dated 2nd August, 2019 as clarified by the order dated 5th August, 2019 as also the order dated 9th August, 2019 in the context of the judgment cited by the respective parties and those referred to hereinabove and the materials referred to by the learned Single Judge we cannot say that there is absolutely no link between the materials on which the conclusion were based and the actual conclusion in case of the order dated 2nd August, 2019 though it is lacking in elaborating reasons which were needed when passed in the context as discussed above. As a result whereof, we cannot conclusively say that the orders were devoid of reasons though the same is scanty. However, we find no reasons assigned while passing the order of classification dated 5th August, 2019 and the order dated 9th August, 2019. The order dated 9th August, 2019 read in the context as aforesaid is, however, absolutely devoid of any reasons. There is no finding why the result of election and/or voting was introduced instead of results of the election as contained in the order dated 2nd August, 2019 as clarified by the order dated 5th August, 2019.

7) Moreover, in view of the proposition laid down in AIR 1951 Cal 561 that injunction by the probate Court should be granted only in an extreme case to protect the estate, it was more so for the learned Single Judge to record elaborate reasons in the orders impugned.

8) So far as the judgments relied upon by the appellants are concerned, there is no dispute as to the proposition laid down therein and we accept the same.

d) On conveniences :

1) Even on convenience, the estate of PDB is the owner of the shares in the Companies as mentioned in the schedule of assets filed in the testamentary proceedings and the unanimous report of the ABL Committee to which there is no dispute. The shares are protected in all respect as Admin

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istrator pendente lite [ABL Committee has been appointed] and, as such, interfering with such shares is difficult at this stage. It is well settled that a shareholder is not the owner of the assets of a Company [AIR 1955 SC 74]. It is also well settled that probate Court does not decide on the title of the properties being subject matter of the Will (2008 (4) SCC 300). It only decides the genuineness of the Will. An order by a Probate Court granting probate is a judgment in rem as against a judgment in personam in case of a decree in a civil suit. It is also equally settled that there is a clear distinction between a Company and its shareholders, even though that shareholder may be only one and is either the Central or a State Government. In the eye of law a Company registered under the Companies Act is a distinct legal entity other than the legal entity or entities that hold its shares in the said company. In this regard, reliance can be placed on the judgment reported in [(1999) 4 SCC 458 considered in Kamal Kumar Mitra [supra] relied upon by the respondent nos.1 and 2.]. It is also a settled position of law that interference to the holding of the AGM by a Company can be done only in extreme cases. The Companies Act, 1956 now replaced by the Companies Act, 2013 is a complete Code in itself so as to the functioning of a company. We do not want to go into a detailed discussion as to the provisions relating to management and administration of a company, or appointments of Directors as the same is not necessary for the purpose of adjudicating the present appeal. The shareholders, however, have adequate protection under the Companies Act, 2013. This is also clear from what has been held in 1986 (1) SCC 264 while deciding a case under the Companies Act, 1956 the provisions of which have mostly remained unchanged in the 2013 Act. The respondents / applicants would not have been prejudiced if the jurisdiction was first decided. Unless the jurisdiction of the probate Court is decided as to its authority to pass orders against Companies in which the Estate holds shares the interfering with their AGM was uncalled for on the ground of convenience and inconvenience leading to preserving the Status quo. The learned Single Judge was, therefore, more so required to decide on his jurisdiction before passing directions against Companies wherein the deceased PDB held shares and not parties to the proceedings. Our Conclusion : 1) The impugned order dated 2nd August, 2019, as clarified by the order dated 5th August, 2019, is, therefore, not sustainable in view of the fact that orders and/or directions were passed interfering with the holding of AGM by Companies which are separate juristic entities without first deciding the issue of jurisdiction. Even if the deceased held shares in such Companies, which are subject matter of the bequest under the Will in question, the jurisdiction to pass orders in respect thereof had to be decided first when specifically raised. The order dated 9th August, 2019, which is a subsequent order wherein the learned Single Judge has exercised probate jurisdiction when the issue of inherent lack of jurisdiction was kept pending for decision, is also not sustainable on the same ground. 2)The order dated 2nd August, 2019 as clarified by the order dated 5th August, 2019 is set aside on the ground that the jurisdiction as to the authority of the probate Court to pass orders against Companies which are third parties to the testamentary suit should have been decided first before passing any other order as the issue relates to inherent lack of jurisdiction and goes to the root of the matter, particularly in view of the fact that a probate Court only in an extreme case can pass an order of injunction. 3) So far as the order dated 9th August, 2019 is concerned, the same also is set aside on two grounds. It is a subsequent order again passed without first deciding the issue of jurisdiction prior to interfering with the AGM of a third party Company as also for being devoid of reasons as stated hereinabove. 4) We have also taken note of the fact that the ad-interim orders/ ex parte ad-interim orders continued for around eight (8) months but when it involves an inherent lack of jurisdiction the said orders have to be set aside. The same is our conclusion even if the order is treated as an ad interim order. 5) So far as the other issues are concerned, we are reminded of our jurisdiction while hearing an appeal arising out of an ex parte interim order or an ad interim order. We do not want to go into the other issues argued as that would amount to usurping the jurisdiction of the learned Single Judge. Moreover, when the affidavits have been completed and the matter had been heard by the learned Single Judge to a great extent by the time the appeal had been preferred, we do not want to decide anything apart from the issues discussed as aforesaid. We make it clear that the learned Single Judge should hear the matter on all issues that may be raised by giving opportunity to the appellants to place their respective cases as any order that may be passed will bind them. The learned Single Judge shall also be not influenced by any finding made hereinabove as the same is only for the purpose of deciding the appeals. 6) The three appeals being APO 94 of 2019, APO 95 of 2019 and APO 17 of 2020 are accordingly allowed without any order as to cost. Urgent photostat certified copy of this judgment/order, if applied for, be supplied to parties upon compliance of all requisite formalities. I agree : [Dr. Sambuddha Chakrborty, J.] Later : After we delivered the judgment and order, Mr. Mookherji, learned Senior Counsel appearing for the respondents nos.1 and 2, prayed for stay of operation of the order. The prayer for stay is heard, considered and rejected.
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