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Showing contexts for: APO in Universal Cables Limited vs Arvind Kumar Newar And Ors on 14 December, 2023Matching Fragments
SL NO. CASE NUMBER PARTIES
1. APO NO. 89 OF 2020 Appeal filed by
Universal Cables
Limited
1.1 OCO/11/2020 Cross Objection in
filed by Pradip Kumar
Khaitan, the respondent
1.2 OCO/20/2020 Cross Objection in
filed by Devendra
Kumar Mantri and
(APO NOS. 89, 90, 91, 92, 94, 95, 96 AND 98 OF 2020)
REPORTABLE
Radha Devi Mohatta,
being the respondent
respectively.
1.3 OCO/3/2020 Cross Objection in
filed by Arvind Kumar
Newar and Nand Gopal
Khaitan, being the
respondent Nos. 1 and
2 respectively.
2. APO NO. 90 OF 2020 Appeal filed by Birla
Cable Limited
2.1 OCO/12/2020 Cross Objection in
filed by Pradip Kumar
Khaitan, the respondent
2.2 OCO/21/2020 Cross Objection in
filed by Devendra
Kumar Mantri and
Radha Devi Mohatta,
being the respondent
(APO NOS. 89, 90, 91, 92, 94, 95, 96 AND 98 OF 2020)
REPORTABLE
respectively.
2.3 OCO/4/2020 Cross Objection in
filed by Arvind Kumar
Newar and Nand Gopal
Khaitan, being the
respondent Nos. 1 and
2 respectively.
3. APO NO. 91 OF 2020 Appeal filed by Vindya
Telelinks Limited
3.1 OCO/13/2020 Cross Objection in
filed by Pradip Kumar
Khaitan, the respondent
3.2 OCO/22/2020 Cross Objection in
filed by Devendra
Kumar Mantri and
Radha Devi Mohatta,
being the respondent
respectively.
(APO NOS. 89, 90, 91, 92, 94, 95, 96 AND 98 OF 2020)
REPORTABLE
3.3 OCO/5/2020 Cross Objection in
filed by Arvind Kumar
Newar and Nand Gopal
Khaitan, being the
respondent Nos. 1 and
2 respectively.
4. APO NO. 95 OF 2020 Appeal filed by Birla
Corporation Limited
4.1 OCO/16/2020 Cross Objection in
filed by Pradip Kumar
Khaitan, being the
4.2 OCO/25/2020 Cross Objection in
filed by Devendra
Kumar Mantri and
Radha Devi Mohatta,
being the respondent
respectively.
4.3 OCO/8/2020 Cross Objection in
(APO NOS. 89, 90, 91, 92, 94, 95, 96 AND 98 OF 2020)
REPORTABLE
filed by Arvind Kumar
Newar and Nand Gopal
Khaitan, being the
respondent Nos. 1 and
2 respectively.
SL NO. CASE NUMBER PARTIES
1. APO NO. 92 OF 2020 Appeal filed by Harsh
Vardhan Lodha
1.1 OCO/14/2020 Cross Objection in
filed by Pradip Kumar
Khaitan, being the
(APO NOS. 89, 90, 91, 92, 94, 95, 96 AND 98 OF 2020)
REPORTABLE
1.2 OCO/23/2020 Cross Objection in
filed by Devendra
Kumar Mantri and
Radha Devi Mohatta,
being the respondent
respectively.
1.3 OCO/6/2020 Cross Objection in
filed by Arvind Kumar
Newar and Nand Gopal
Khaitan, being the
respondent Nos. 1 and
2 respectively.
2. APO NO. 94 OF 2020 Appeal filed by
Meenakshi Periwal
2.1 OCO/15/2020 Cross Objection in
filed by Pradip Kumar
Khaitan, being the
2.2 OCO/24/2020 Cross Objection in
(APO NOS. 89, 90, 91, 92, 94, 95, 96 AND 98 OF 2020)
REPORTABLE
filed by Devendra
Kumar Mantri and
Radha Devi Mohatta,
being the respondent
respectively.
2.3 OCO/7/2020 Cross Objection in
filed by Arvind Kumar
Newar and Nand Gopal
Khaitan, being the
respondent Nos. 1 and
2 respectively.
3. APO NO. 96 OF 2020 Appeal filed by Shreyas
Medical Society
3.1 OCO/17/2020 Cross Objection in
filed by Pradip Kumar
Khaitan, being the
3.2 OCO/27/2020 Cross Objection in
filed by Devendra
Kumar Mantri and
(APO NOS. 89, 90, 91, 92, 94, 95, 96 AND 98 OF 2020)
REPORTABLE
Radha Devi Mohatta,
being the respondent
respectively.
3.3 OCO/9/2020 Cross Objection in
filed by Arvind Kumar
Newar and Nand Gopal
Khaitan, being the
respondent Nos. 1 and
2 respectively.
4. APO NO. 98 OF 2020 Appeal filed by Aditya
Vikram Lodha
4.1 OCO/10/2020 Cross Objection in
filed by Arvind Kumar
Newar and Nand Gopal
Khaitan, being the
respondent Nos. 1 and
2 respectively.
4.2 OCO/18/2020 Cross Objection in
filed by Pradip Kumar
Khaitan, being the
(APO NOS. 89, 90, 91, 92, 94, 95, 96 AND 98 OF 2020)
REPORTABLE
4.3 OCO/26/2020 Cross Objection in
filed by Devendra
Kumar Mantri and
Radha Devi Mohatta,
being the respondent
respectively.
30. It is submitted that the respondents have argued that a learned single bench of this court while hearing the appeal from the order of CLB has held that the estate of PDB held 62.90% shareholding in BCrL which is not true. In fact, the court recorded the case of both groups and did not decide this and contrary made certain other observations that the jurisdiction to decide on this issue has largely shifted from the domain of CLB to the probate court and the courts for trial of suits. Further it is submitted that these observations regarding shifting of jurisdiction in a statutory appeal which order of CLB was approved by the Hon'ble Division Bench in its judgment dated 04.05.2020. Further the respondents have omitted to refer to paragraph 16 of the judgment wherein it was observed that an inconsistent case is being run by the appellants therein as it has been pleaded in the main petition that late MP Birla and as also PDB transferred their properties including shares to five (APO NOS. 89, 90, 91, 92, 94, 95, 96 AND 98 OF 2020) REPORTABLE charitable trusts. Thus, the respondents are running contrary cases and should not be allowed to approbate and reprobate. Thus, it is submitted that the impugned order is beyond the jurisdiction of the court and also beyond the scope of the GA No. 1735 of 2019 and GA No. 1845 of 2019. It is submitted that the decision of the majority APL dated 19.07.2019 is beyond their jurisdiction and competence and was erroneously made without even having conclusively determined the extent of the estate. The decision of the majority APLs dated 30.07.2019 is beyond the relief claimed in the master summons taken out in GA No. 1735 of 2019 or GA No. 1845 of 2019 and therefore the court had no jurisdiction to pass any order of implementation of the decision dated 30.07.2019. Without prejudice, it is contended that even if such prayer was contained in the master summon's, the said relief would have been beyond the jurisdiction of the testamentary court to grant. In any event, the direction contained in the impugned order runs contrary to the findings of the learned single bench which accepted the decision of the coordinate bench that probate court at best can pass necessary directions upon APL to initiate appropriate proceedings before appropriate forum for seeking appropriate reliefs in accordance with law. It is further submitted that the directions issued in the impugned order to the plaintiffs to implement all consequential decisions of APLs is beyond the prayers sought for in the application and hence without jurisdiction. The direction is uncertain and vague and grants blanket enforceability to all subsequent decisions of APLs thus negating the order of the Hon'ble Division Bench dated 23.08.2012. It is further submitted that the (APO NOS. 89, 90, 91, 92, 94, 95, 96 AND 98 OF 2020) REPORTABLE third direction restraining the plaintiff from drawing any benefit personally from out of the assets of the estate of the deceased is beyond the scope of the prayers in those two petitions. There is no allegation made that the plaintiff are taking any benefit personally from and out of the funds of the estate. So far as the directions contained in sub para (b), learned single bench restrained the plaintiffs from interfering with the decision of the Joint APLs and any decision which may be taken by APL by majority in future, if the same directly and indirectly relates to the estate of the deceased. This order is beyond the jurisdiction of the learned single bench to take away the legal remedy and right given to the parties by the Hon'ble Division Bench in its order dated 23.08.2012 which expressly permits an aggrieved party to challenge a decision made by the Joint APLs before probate court. The second limb of the order in sub para (b) restrains HVL from holding any office in any of the entities of the MP Birla Group during pendency of the suit. This order has been passed despite the fact that HVL has been director of MP Birla Group of Companies even during the lift time of PDB and has continued to be elected or reappointed thereafter from time to time with a requisite majority, as per provisions of the Companies Act, 2013 and those resolutions appointing him as director have not been set aside till date. It was submitted that the HVL was reappointed in BCL on 23.09.2021, in UCL on 18.08.2020 in BCRL on 25.08.2020 and VTL on 05.08.2019. Further it is submitted when the respondent sought to restrain HVL from offering or proposing himself as a candidate for director of VTL and BCL at the meetings to be held on 5th and 6th of August 2019, by way of a (APO NOS. 89, 90, 91, 92, 94, 95, 96 AND 98 OF 2020) REPORTABLE supplementary affidavit filed in GA No. 1735 of 2019 no such order was passed and HVL contested and was reappointed as a director. Similarly in August 2020, the respondents file an application in GA No. 1005 of 2020 seeking an order restraining reappointment of HVL as director of BCRL and UCL at the annual general meeting proposed on 25.08.2020 and 18.08.2020 respectively and no order of interim injunction was passed and HVL contested and was reappointed as a director. More importantly, none of these resolutions reappointing HVL as director have been set aside. It is submitted that despite the aforementioned facts as well as the fact that the learned single bench accepted that probate court has no jurisdiction to pass any order against third parties and without prejudice to the fact that a supplementary affidavit does not serve to amend a notice of motion or enable a party to seek new relief therein. It is submitted that the impugned order erroneously and indirectly restrains HVL from holding any part in any of the entities of the MP Birla Group during the pendency of the suit. Thus, the directions contained in the sub para (b) (ii)of the impugned order exceeds the jurisdiction of a probate court and erroneously curtails the tenure of office of a director in contravention of Section 152 of the Companies Act, 2013 which fixes the tenure of a director appointed or reappointed at the annual general meeting and in the case on hand it is three years. Lastly, it was submitted that the impugned order is in violation of the principles of natural justice. It is submitted that the defendants 1(b) and 1(c) were the applicants in GA No. 1735 of 2019 and GA No. 1845 of 2019 and they made their submissions at the first instance and thereafter the (APO NOS. 89, 90, 91, 92, 94, 95, 96 AND 98 OF 2020) REPORTABLE plaintiffs being respondents in those applications made submissions and it was concluded. At that juncture, the defendant no. 3(a) did not make any submissions. Thereafter, the learned single bench permitted defendants no. 1(b), 1(c), 1(d) and 2 to advance new arguments and rely on new judgments in reply for the first time. Thereafter the three noticee companies made their submissions. After conclusion of the submissions of the three notices companies, learned single bench permitted the defendant no. 3(a) to advance new arguments and file exhaustive rejoinder notes of submissions and notes on relief which though objected to by the plaintiff was allowed by the learned single bench. The defendant no. 1(d), 2 and 3(a) have not filed any pleadings in any of the seven applications decided by the learned single bench, hence submissions in this behalf was without any pleadings by them. In such circumstances, the plaintiffs were constrained to file an application in GA No. 1121 of 2020 praying for opportunity of giving hearing to the plaintiff to deal with the new arguments and the new judgments cited by the defendant for the first time in the reply after the conclusion of the submissions of the plaintiffs. However, no such opportunity was granted to the plaintiffs and orders were reserved by learned Single Bench on 04.09.2020.. However, in the cause title of the order recording the same not only GA No. 1735 of 2019 and GA No. 1845 of 2019 were included but several other GAs which were wholly unconnected with the two GAs including GA No. 1005 of 2020 of the defendants filed in August 2020 were included. This necessitated the plaintiff to file clarification application in GA No. 78 of 2020 wherein the learned single bench by order (APO NOS. 89, 90, 91, 92, 94, 95, 96 AND 98 OF 2020) REPORTABLE dated 16.09.2020 directed that all other applications which appeared in the list of 04.09.2020 except GA No. 2007 of 2019 will be considered for adjudication. This procedure is contrary to the establish practice and is also in violation of the principles of natural justice.
54. With regard to the position of an APL it is submitted that it is similar to that of a receiver with the distinction that the APL represents the estate of the deceased for all purposes except distribution. Reliance was placed on the decision in Pandurang Shamrao Luad and Ors. Versus Dwarkadas Kallindas and Ors.55 It is submitted that the APL represents the estate of the deceased and in terms of Section 211 of the said Act the executor or administrator of a deceased person is his legal representative for all purposes and all the property of the deceased person vests in him as such and the meaning of "legal representatives" will have the same meaning as given in Section 2(11) of CPC. It is submitted that APL is appointed for a limited purpose of preservation and protection of estate. APLs being officers of Court are required to be impartial and should not enter into the arena and conflict between the parties. It is also well settled that the APLs are not appointed for the benefit of any of the parties and they should not interfere in the litigation between the parties and should not enter into the arena of conflict between the parties. In this regard, reliance was placed on the decision in Lilavati Kirtilal (2007) 11 SCC 357 (2008) 4 SCC 300 AIR 2011 Bom 136= 2011(4) Mh.L.J. 50 AIR 1933 Bom 342 (APO NOS. 89, 90, 91, 92, 94, 95, 96 AND 98 OF 2020) REPORTABLE Mehta Medical Trust and Ors. Versus Charu K. Mehta and Ors. 56 , Shivram Antaiah Shetty Versus Chimanlal Ambalal Trivedi and Ors. 57 and Woodroffe-Law Relating to Receivers, 8th edition at page 236 and 237. It is submitted that contrary to the above position of law APL has actively contested the applications. Apart from filing proceedings, such as a petition under Section 241/242 of the Companies Act alleging operation and mismanagement in respect of 3 subsidiaries VTL before the NCLT, Kolkata Bench more so when, the joint APLs do not hold a single share in the said subsidiaries of VTL. It is submitted that there has been a split verdict by the Bench, the Judicial member holding that the petitions are not maintainable and the technical member holding that the petitions are prima facie maintainable and the matter has been referred to the third member for decision (who affirmed the decision of the Judicial member). Further it is submitted that the special leave petition civil Dairy No. 27064 of 2021 before the Hon'ble Supreme Court challenging the judgment dated 22.04.2021 dismissing the contempt petitions filed by the group of defendants was disposed of without notice by order dated 04.02.2022. The learned Senior Advocate then proceeded to elaborately refer to the minutes of the APL committee dated 19.07.2019 and pointed out various discrepancies and decisions which are contrary to the minutes of the meeting. It is submitted that with regard to the trademark issue and logo, the said trademark and logo does not form part of the estate of PDB. Nextly, the learned Senior Advocate referred 2008 SCC Online Bom 1210 AIR 1987 Gujarat 30 (APO NOS. 89, 90, 91, 92, 94, 95, 96 AND 98 OF 2020) REPORTABLE to the pleadings made on behalf of BCL. The letter of APL to BCL dated 20.07.2012, and the reply of BCL to APL dated 17.07.2013 and the reply of BCL to APL dated 18.03.2014. After referring to the letter of the APL Committee dated 04.11.2020 addressed to the Board of Directors of BCL, it was submitted that APL is arrogating to themselves the power which is not available and it is contrary to the provisions of the Companies Act. The learned Senior Advocate then proceeded to submit with regard to the fundamental tenets of Company Law which include the independence of the Board of Directors, primacy of the articles of association and sanctity of register of members which requires adherence and cannot be deviated from on account of a testamentary dispute. In this regard, the observations made in Gower and Davies, Principles of Mordern Company Law (8th Edition), Palmer's Company Law (24th Edition) were referred. Reliance was placed on the decision of the Hon'ble Supreme Court in Naresh Chandra Sanyal Versus Calcutta Stock Exchange Association Limited with regard to the importance of articles for the regulation and governance of the company's internal affairs. The definition of Member as defined under Section 2(15) of the Companies Act, 2013 was referred to and it is submitted that apart from the Board of Directors and the Members of the company, the Company Act does not recognize any entity which has a say in the company's affairs. Reliance was placed on the decision of the Hon'ble Supreme Court in LIC Versus Escorts Ltd. 58 and Vodafone (1986) 1 SCC 264 (APO NOS. 89, 90, 91, 92, 94, 95, 96 AND 98 OF 2020) REPORTABLE International Holdings Versus Union of India59. The definition of "control" as defined under Section 2(27) of the 2013 Act, it is submitted that none of the ingredients of control is made out in favour of the estate of PDB. It is submitted that control is usually a consequence of the member's share holding in the company; control is not an asset; it is their right emanating from certain factual conditions namely shareholding or management rights or share holders agreements or voting agreements or in any other manner. PDB's estate on account of holding only 1260 shares of BCL accounting for a mere 0.06% of the total shareholding, cannot be said to be in "control" of the company. In this regard, paragraph 159 of the decision in Vodafone International Holdings BV was referred. Thus, it is submitted that control is inseparable from their share-holding of management rights or share holders agreements or voting agreements or in any other manner in terms of the definition of control in Section 2(27) of the 2013 Act. In the present case, the alleged control of PDB in her lifetime was on account of personal influence without any underlying majority share holding. The powers of the APL are limited to the estate of PDB which does not include his control in interest over the company. Further it is submitted that the lack of control in interest of the estate of PDB in BCL is evidenced, inter alia, by the reappointment of HVL to the Board and chairmanship of BCL on 25.08.2020, despite the APL committee voting against their resolution for appointment of HVL after discontinuing the shares referable to PDB's estate in pursuance of the order dated 01.10.2020. Thus, by way of (2012) 6 SCC 613 (APO NOS. 89, 90, 91, 92, 94, 95, 96 AND 98 OF 2020) REPORTABLE concluding submissions, the learned Senior Advocate submitted that no adverse directions can be issued against the company as it was not the party in the suit and therefore, the directions issued in the impugned judgment are liable to be set aside. No membership rights can be exercised by non-members and APL committee can only exercise voting and other membership rights with reference to the 1260 shares held by it and nothing beyond. In support of such contention reliance was placed on the decision in Howrah Trading Co. Ltd. Versus CIT60; Balkrishan Gupta Versus Polytex Ltd.61 and Killick Nixon Ltd. Versus Bank of India 62. It is submitted that during her lifetime PDB could not have exercised voting rights in respect of the shares held by any or all of the promoters as a matter of legal right. The APL acting as guardian of PDB's estate, cannot exercise the voting rights at company meetings in respect of shares held by various companies, trusts and societies of the MP Birla Group. To do so share holder should exercise powers beyond the scope of the estate and in flagrant violation of law. It is submitted that inclusion of an individual, company, trust, society in the promoter group does not mean that such entity is legally owned and controlled by anyone promoter as it only means that such individuals, companies, trusts, societies are associated with each other as stipulated in the SEBI Takeover Regulations and SEBI Disclosure Regulations. Further it is submitted that merely because there are cross holdings and chain holdings between the companies, trusts and societies 1959 Supp (2) SCR 448 (1985) 2 SCC 167 (1985) 57 Comp Cas 831 (APO NOS. 89, 90, 91, 92, 94, 95, 96 AND 98 OF 2020) REPORTABLE forming part of the promoter group, cannot in law affect any member's statutory rights to exercise voting rights qua it share holding or permit/ enable the APL committee to exercise voting rights qua such member's share. The joint APLs are entitled to exercise rights as legal share holders only in respect of the shares recorded in their names in the company and not for anybody else. The shares held by BCL in other companies are the absolute property of the company, a decision in respect of which taken by BCL alone. It is submitted that even assuming if the estate of PDB held majority shares of the BCL, yet it cannot direct a company to act in a particular manner. This is so because a share holder does not have any interest in the assets of the company. This issue is fully covered by the judgment dated 19.05.2016 reported in 2016 SCC Online Calcutta 1541. In this regard reliance is also placed on the decision in Murarka Pain & Varnish works Pvt Ltd. Versus Mohanlal Murarka 63; Jagadish Prasad and Anr. Versus P. T. Paras Ram and Ors. 64 and Subarban Bank Private Limited Versus Thariath and Anr. 65 After referring to the decisions in Vodafone International and in the case of Balkrishna Gupta it is submitted that BCL can permit exercise of voting rights only to the persons whose names appear in the register of members. The company cannot deny voting rights to a recorded share holder/ member. After referring to the decision in JP Srivastava Versus Gwalior Sugar Co Ltd.66 and Bal Krishnan Gupta & Ors. (Supra), it is submitted that the estate of AIR 1961 Cal 251 AIR 1941 All 360 AIR 1968 Ker 206 (2005) 1 SCC 172 (APO NOS. 89, 90, 91, 92, 94, 95, 96 AND 98 OF 2020) REPORTABLE PDB is not a beneficial owner of the shares of the company. There is no record of significant beneficial ownership of the shares of the company with a depository in terms of Section 43 and 89 of the Companies Act, 2013. It is submitted that PDB during her lifetime had never made any declaration under Section 187 C of the Companies Act, 1956. Therefore the estate of PDB does not include any significant beneficial ownership of shares and the APL cannot go beyond the estate. In this regard, reference was made to the decision in the case of Ahmed Abdulla Ahmed Al Ghurair Versus Star Health and Allied Insurance67 and Sanjeev Mahajan Versus Aries Travels Pvt. Ltd. judgment dated 04.02.2020 in CS(OS) No. 46 of 2020 in paragraphs 29 and 30. With regard to the contention that regarding "single directing mind" it is submitted that the concept of "single directing mind" and will are irrelevant in determining the aspect of control within the meaning of Companies Act. The said concept arises if a company is accused of wrong doing in which case the single directing mind is identified in order to fix liability. It is the means ria which is attributed to the corporations on the principles of "alter ego" or "single directing mind" of the company. The said concept cannot arise in civil cases where there is no acquisition of wrong doing/ criminality/ fraud. To support such contention reliance was placed on the decision in Sunil Mittal Versus CBI68 . Therefore, this concept of single directing mind has no application to testamentary proceedings. With the above submissions the learned Senior Advocate contended that the adverse directions and observations contained in (2019) 13 SCC 259 (2015) 4 SCC 609 (APO NOS. 89, 90, 91, 92, 94, 95, 96 AND 98 OF 2020) REPORTABLE the impugned order qua BCL and its affairs despite the Court holding that the probate Court has no jurisdiction or liable to be set aside.