Calcutta High Court
Meenakshi Periwal & Ors vs Gautam Gan & Ors on 7 November, 2024
OD-8
IN THE HIGH COURT AT CALCUTTA
(ORDINARY ORIGINAL CIVIL JURISDICTION)
ORIGINAL SIDE
IA G.A. No. 1 of 2024
In
C.S. No. 214 of 2024
MEENAKSHI PERIWAL & ORS.
-VS-
GAUTAM GAN & ORS.
BEFORE:
The Hon'ble JUSTICE KRISHNA RAO
Hearing Concluded On : 04.11.2024
Order On : 07.11.2024
Appearance:
Mr. Abhrajit Mitra, Sr. Adv.
Mr. Debanjan Mandal, Adv.
Mr. Sanjiv Kr. Trivedi, Adv.
Mr. Jishnu Chowdhury, Adv.
Mr. Soumya Roy Chowdhury, Adv.
Mr. Satadeep Bhattacharyya, Adv.
Ms. Iram Hassan, Adv.
Mr. Sanket Sarawgi, Adv.
Ms. Mahima Cholera, Adv.
... for the plaintiffs.
Mr. Abhratosh Mazumdar, Sr. Adv.
Mr. Rajesh Upadhyay, Adv.
Mr. Akshay Jain Sukhani, Adv.
... for the defendant no. 7.
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Mr. Ratnanko Banerji, Sr. Adv.
Mr. D.N. Sharma, Adv.
Mr. Rajarshi Dutta, Adv.
Ms. Pritha Basu, Adv.
Mr. Saptarshi Kar, Adv.
...for the defendant nos. 8 and 10.
Mr. Krishnaraj Thaker, Adv.
Ms. Akansha Chopra, Adv.
...for the defendant no. 9.
Mr. Anirban Ray, Adv.
Mr. Sankarsan Sarkar, Adv.
Mr. Debartha Chakraborty, Adv.
...for the defendant nos. 11 and 12.
Mr. Ranjan Bachawat, Sr. Adv.
Mr. Satyaki Mukherjee, Adv.
Mr. Paritosh Sinha, Adv.
...for the defendant no. 14.
ORDER
1. The plaintiffs have filed the present application praying for interim order. The defendant no. 7 is one of the Joint Administrators appointed by this Court in Testamentary Suit No. 6 of 2004. The defendant nos. 8 and 9 in their Board Meeting held on 23rd October, 2024 have proposed to lease additional space of 1852 sq. ft. situated at East Wing, 7th Floor in Birla Building at an exorbitant rent of Rs. 4,93,039/- per month which will automatically increase by 15% per annum at the expiry of three years and there was also a proposal to pay a substantial deposit of Rs. 11,00,000/-.
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2. The defendant no. 7 being one of the Joint APLs who attended the said meeting has not agreed with the said proposal and accordingly on 25th October, 2024, has submitted his objection to lease of additional space to the defendants. Inspite of receipt of the objections raised by the defendant no. 7, the defendants have not considered the objection and have subsequently approved the said proposal for the additional space of 1852 sq.ft at East Wing, 7th Floor of Birla Building at the monthly rent of Rs. 4,93,039/- per month.
3. Now, the plaintiffs have filed the present suit challenging the decision of the defendants to obtain leasehold rights in favour of the defendant nos. 8 to 12 in respect of 7th floor of the Birla Building.
4. Mr. Abhrajit Mitra, Learned Senior Advocate representing the plaintiffs submits that the defendant nos. 8 to 12 are the existing companies and having their respective registered offices at 4th Floor, Birla Building, 9/1 R.N. Mukherjee Road, Kolkata - 700 001. Birla Buildings Limited i.e. the defendant no. 13 is in possession, administrative management and control of the office space in the East Block of 7th Floor of Birla Building. The defendant no. 14, the Birla Corporation Limited is the owner of the 3rd and 4th Floor of the Birla Building.
5. Mr. Mitra submits that on record, the defendant nos. 8, 9 and 11 are the tenants of East Block on the 4th floor of Birla Building but the offices of the defendant nos. 10 and 12 are also situated in the same portion of the Birla Building. He submits that this position is since 4 prior to the demise of Priyamvada Devi Birla. The total rent is paid by the defendant nos. 8, 9 and 11 for the offices on the 4th floor is Rs. 69,300/- per annum till March, 2024. He submits that the defendant nos. 8 to 12 have made payment of rent for the period from 1st April, 2024 till 31st March, 2025.
6. Mr. Mitra submits that other than the defendant no. 7, the defendant nos. 5 and 6 are also the Joint Administrators appointed by the Testamentary Court in the proceeding for grant of Letters of Administration. He submits that the defendant nos. 1 to 4 are directors of the defendant nos. 8 to 12. The defendants have been inducted as directors by two APLs after removing the plaintiff no. 3 and the other old longtime directors.
7. Mr. Mitra submits that the defendant nos. 8 to 12 had at all material times functioned i.e. during the lifetime of M.P. Birla, Priyamvada Devi Birla and Rajendra Singh Lodha and they never felt necessity for any additional space. He submits that even APLs appointed by the Testamentary Court on 23rd August, 2012 were also never expressed any requirement for additional space for the companies.
8. Mr. Mitra submits that for the first time, in the month of October, 2024 because of the order dated 22nd May, 2024 passed in CS No. 153 of 2024 nullifying the decision taken at the behest of two APLs i.e. the defendant nos. 5 and 6 in the month of March, 2021 which order was passed by relying upon the judgment of the Hon'ble Division Bench 5 dated 14th December, 2023. He submits that 7th floor of the Birla Building is owned, occupied and under the control of rival Birla group, i.e. the defendant no. 13 and entity also under the control of Birla Group who at all material times, have been the defendants and supporting the defendants in the testamentary suit.
9. Mr. Mitra submits that it is the practice of the Joint APLs to take all decisions pertaining to the Estate after discussions at meetings but in the present case, i.e. proposing to take lease of 1852 sq.ft additional space on the 7th floor of the Birla Building, no meeting of the Joint APLs was held. He submits that the proposed lease for 7th floor area is at the behest of the two APLs and for the purpose of shifting the records of the companies from the 4th floor owned by Birla Corporation Limited to the proposed leased area belonging to the rival Birla Group and this is a major decision pertaining to the administration of the Estate of Priyamvada Devi Birla and as per the order of the Hon'ble Division Bench, the APLs would have to seek appropriate orders from the Testamentary Court but in the present case, without seeking any appropriate order from the Testamentary Court, the two APLs i.e. defendant nos. 5 and 6 along with the companies have taken a decision to take on lease the additional space on the 7th floor.
10. Mr. Mitra submits that shifting of any records of any companies from the 4th floor to 7th floor would be inimical to the Estate of Priyamvada Devi Birla and the expenses of the companies directly controlled by the Joint APLs going up by Rs. 69,00,000/- per annum and also a sum of 6 Rs. 1 crore on renovation, shifting of the records to the office belonging to the rival claimants of the Estate and the same would not be in the interest of the Estate.
11. Mr. Abhratosh Mazumdar, Learned Senior Advocate representing the defendant no. 7 who is one of the Joint APLs submits that as per the Minutes of the Meeting dated 23rd October, 2024, the reason for the additional space by the defendant nos. 8 to 12 is that the employees are feeling threatened but the defendants have not lodged any complaint before the Police Authority with regard to the threatening. In the meeting dated 31st August, 2024 after the discussion, it was decided by the majority that further legal advice will be sought to protect the interest of the company and if required appropriate legal proceedings will be initiated. But, the companies have not taken any legal advice or initiated any legal proceedings and in contrary have taken a decision for entering into the lease agreements for additional space at the 7th floor at Birla Building.
12. Mr. Ranjan Bachawat, Learned Senior Advocate representing the defendant no. 14 there is no justification for shifting of registered office of the defendant nos. 8 to 12 from the 4th floor to 7th floor. He submits that the defendant no. 14 is the landlord but the defendant nos. 8 to 12 have never informed the defendant no. 14 for requirement of any additional space. He submits that though the rent agreement with the defendant no. 14 was expired in the month of March, 2024 but the defendants have paid the rent to the defendant no. 14 till the month of 7 March, 2025. He submits that it is not the case of the defendant companies that the defendant no. 14 has directed to vacate the premises and there is no apprehension of the defendant companies that they will be evicted from the 4th floor. He submits that the decision taken by the defendant companies along with two APLs in their meeting for additional space, the rent is much higher than the present rent of the 4th floor.
13. Mr. Ratnanko Banerji, Learned Senior Advocate representing the defendant nos. 8 and 10 submits that the complaint is made by the third party and the plaintiffs have filed the present suit on the basis of the complaint of the defendant no. 7 thus there is no cause of action arose for filing of the suit by the plaintiffs. He submits that the Hon'ble Division Bench in the Judgment 14th December, 2023 held that the APLs cannot interfere with all internal affairs of the companies of all the tiers with the blessings of the Testamentary Court and there cannot be any universal or dynamic injunction or directions affecting the future course of action of the companies from the Testamentary Court.
14. Mr. Banerji submits that the plaintiffs are claiming themselves as universal legatees under the last Will and Testament of Priyamvada Devi Birla and thus the plaintiffs have to approach the Testamentary Court but in the present case, the defendants have taken a decision for additional space as per the requirement of the defendant companies after approval of the same in the Board Meeting. He submits that the objections raised by the defendant no. 7 by an email dated 25th 8 October, 2024 cannot be a cause of action for the plaintiffs to file the present suit.
15. Mr. Banerji submits that if the plaintiffs are claiming themselves as universal legatees, that is to be decided by the Testamentary Court wherein the Testamentary Suit is pending with respect to the last Will and Testament. He submits that the plaintiffs have no right to file the present suit, challenging the Board Resolution wherein with the majority, it has been decided to take additional space in the 7th floor of the Birla Building.
16. Mr. Banerji submits that the defendant no. 14 being the landlord cannot raise any objection against the defendant companies for taking additional space on lease. He submits that it is the tenants who can take a decision to enter into the lease agreement/ rent agreement for additional space and the landlord cannot restrain the tenants to obtain any additional space in rent or lease.
17. Mr. Krishnaraj Thaker, Learned Advocate representing the defendant no. 9 submits that the plaintiffs have no locus standi to file the suit against the defendants challenging the decision taken by the defendant companies for additional space. He submits that Section 104 of the Succession Act, 1925 is not applicable in the case of the plaintiffs and has referred Section 336 of the Succession Act, 1925 and submitted that the plaintiffs can claim the property only after obtaining probate of the Will.
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18. Mr. Thaker has also relied upon Section 247 of the Succession Act, 1925 and submitted that the Testamentary Court had already appointed Joint Administrators who are the defendant nos. 5, 6 and 7 and the plaintiffs have not filed any application before the Testamentary Court challenging the action of the Administrators appointed by the Testamentary Court.
19. Mr. Thaker relied upon Section 192 of the Succession Act, 1925 and submitted that this is not the case of the plaintiffs that the defendants have forcefully or illegally disturbed the possession of the plaintiffs.
20. Mr. Anirban Ray, Learned Advocate representing the defendant nos. 11 and 12 relied upon Section 179 and Section 430 of the Companies Act, 2013 and submitted that the plaintiffs have challenged the Board Resolution in the present suit and as per Section 179 read with Section 430, no injunction can be granted by the Civil Court and thus in the present application, no injunction can be granted. He submits that the plaintiffs are claiming the universal legatees of the last Will and Testament but the protection of the Estate of the deceased is only with the Testamentary Court and this Court cannot pass any order of injunction in the suit filed by the plaintiffs.
21. Heard the Learned Counsel for the respective parties, perused the materials available on record. The plaintiffs have prayed for an injunction restraining the defendants from giving any effect or further effect or acting in terms of the decision to obtain leasehold rights in 10 favour of defendant nos. 8 to 12 with respect to the 7th floor of the Birla Building situated at 9/1, R.N. Mukherjee Road, Kolkata- 700 001. The plaintiffs are claiming themselves as universal legatees under the last Will and Testament of Priyamvada Devi Birla. A Testamentary Suit being T.S. No. 6 of 2004 is pending before the Testamentary Court for grant of Letters of Administration of the last Will and Testament. In the said suit, the Testamentary Court has appointed three Joint Administrators being the defendant nos. 5, 6 and 7.
22. The defendant nos. 8 to 12 have taken a decision in the Board Meeting to take the 7th floor of the Birla Building on lease for the purpose of their offices. The main contention of the plaintiffs is that the defendant nos. 8 to 12 are already having their offices at 4th Floor of the said building. Without any requirement, the defendant companies are taking the additional space in an exorbitant monthly rent of Rs.1,84,181/-, monthly facilities charges of Rs. 1,84,181/- and levies service charges of Rs.1,24,677/- in total Rs. 4,93,039/- and increase of rent by 15% per annum at the expiry of three years and also security deposit of Rs. 11,05,086/- only for the benefit of defendant no.13 who is the rival group of the plaintiffs.
23. The Division Bench of this Court by an order dated 14th December, 2023 held that:
"217. Issue 3 ii) The very composition of the APL brews conflict of interest, since two of the members represent the two warring factions and have left no stone unturned to show their true colours in that regard. Thus, in view of the 11 discussion above, the only way in which the APL can function effectively is for the third member, who is necessarily a retired nominated Judge, to act as arbiter in case of conflict of decision between the other two members of the APL. In case there is no resolution, the third member shall exercise veto power. In case of major decisions (which decisions are 'major' for this purpose shall be decided by the third member), the APL may seek appropriate orders from the testamentary court. The APL must also keep in mind that it is not an adjudicatory authority but merely the representative of the estate of the deceased testatrix.
218. Thus, the order of the learned Single Judge is modified to the above extent. Liberty is given to the APL and the parties to approach the testamentary court taking up the letters of administration suit if need be and where there are serious doubts."
24. In the present scenario, the defendant companies have taken a decision for additional space of 1852 Sq. Ft. in the 7th floor of Birla Building. The defendant nos. 5, 6 and 7 being the Joint APLs have attended Board Meeting. The defendant nos. 5 and 6 have agreed for the proposal but the defendant no.7 has raised objection but in the board meeting with the majority has approved the proposal of additional space. In view of the above, the contention raised by the plaintiffs that the decision of additional space is a major decision and the Joint APLs have to seek appropriate orders from the Testamentary Court does not stand.
25. The companies have taken a decision for additional space as per their requirement. Neither the plaintiffs nor the defendant no.14 can raise any objection for additional space. In the Minutes of the Meeting dated 31st August, 2024, it is categorically mentioned that the rate being charge is in the lines with the rental for commercial office in Central 12 Business of Kolkata and the rents will be shared by five companies as per ratio mentioned in the minutes dated 31st August, 2024. The shares held by Estate of Late Priyamvada Devi Birla are already available in the affidavit of assets of the Testamentary Suit. The plaintiffs cannot restrain the companies for their day today business. The plaintiff claim that they are the universal legatees and if the plaintiffs find any misappropriation of funds or alienation of the Estate of the deceased, the plaintiffs can bring the same to the notice of the Testamentary Court but the plaintiffs cannot ask for any injunction against the companies for their day to day affairs.
26. As regard the contention of the defendant no.7 that the defendant companies in their board meeting stated that the staff members of the Investment Companies, Trust and Societies having their offices in the said space are being subjected to various types of intimidation and threats on daily basis and thus the defendant companies have approved the proposal for addition space but the contention of the defendant no.7 is not correct. As per the said Minutes of the Meeting of the Companies, the above matter was discussed but i.e. not the reason for acquiring additional space at 7th floor. In the said Minutes, it is categorically mentioned that "it was also decided that keeping in mind the growing need for additional office space, the management may also identify and finalize other additional suitable space for the office need of the company on rental basis". Thus, it cannot be said that the 13 defendant companies are acquiring additional space only due to intimidation and threats on daily basis.
27. Though the defendants have raised several contentions with regard to the maintainability of the suit filed by the plaintiffs but this Court is of the view that the question of maintainability can be decided only after filing of affidavits.
28. The defendant companies are in need of additional space and the proposal for additional space was discussed in the Board Meeting and the majority of the members of the Board have approved the proposal except the defendant no. 7.
29. Considering the above, this Court finds that the plaintiffs have not made out any prima facie case and balance of convenience and inconvenience in favour of the plaintiffs and thus interim prayer is refused.
30. The defendants are directed to file affidavit-in-opposition within two weeks, reply, if any, thereto be filed within a week thereafter. List the matter on 4th December, 2024.
(KRISHNA RAO, J.)