Beruflich Dokumente
Kultur Dokumente
P R E S E N T: -
an d
Delivered on : 11.10.2007
For the appellant: -
appellants challenging a common judgment and order dated 19th May, 2006
passed by the Hon'ble First Court on the applications filed by Radha Devi
following order:
Being aggrieved by the said order, these appeals and cross-objections were
Both the appeals and the cross-objections are taken up for hearing and are
Birla (hereinafter referred to as “MPB”) died on 3rd July, 2004 and left a
registered Will dated 18th April, 1999 and a codicil dated 15th April, 2003
respectively. MPB died on 30th July, 1990. PDB, during her lifetime, was in
By the said registered Will dated 18th April, 1999, PDB appointed Rajendra
This Will has been challenged by the sisters of MPB, namely LDN and RDM. It is
also to be noted that MPB and PDB had no issue. It further appears that the
caveats were filed on behalf of LDN and RDM and the said caveats have not been
opposed by RSL.
challenging the said Will. The caveats filed by KKB, BKB and YB have been
discharged by the High Court and the caveat filed by GPB has been retained.
It is also to be noted that LDN, since deceased, her heirs and the Executors
have been substituted in the probate proceedings. Admittedly, after the death of
PDB, RSL, on 12th July, 2004 read out the said registered Will at Birla Park
before the members of Birla family. On 19th July, 2004, RSL filed the probate
application before this Hon'ble Court being P.L.A. No. 204 of 2004.
It further appears that a suit being C. S. No. 221 of 2004 was filed on 17th
August, 2004 by KKB, GPB and others claiming that MPB and PDB had left
earlier Wills dated 13th July, 1982 and the said two Wills are Mutual Wills. The
claim in the plaint is that there is an irrevocable agreement between MPB and
alleged Will of MPB dated 13th July, 1982 which has been marked as P.L.A. No.
241 of 2004. It is pointed out that the said petition was filed for probate 14 years
after the death of MPB (i.e. in the year 1990). Another petition for probate was
filed by GPB and others for probate of the alleged Will of PDB dated 13th July,
After the death of PDB, RSL, as Executor, took the charge of the Estate of
PDB. The said fact is also admitted by the caveators. RSL was allowed to
manage and control the Estate of the deceased testatrix (PDB) as Executor. After
six months, applications were filed for appointment of Administrators pendete lite
Administrator Pendente Lite was filed by the respondents after the delay of six
months which would show that even the caveators do not have really any
apprehension that the Estate in the hands of RSL as Executor was under any
risk of dilution or waste or mismanagement. In fact, the caveators have not been
able to establish any act of dilution of value of shares of the Estate in MPB Group
of Companies or any or mismanagement on the part of the RSL during the said
filed on 16th December, 2004 being G.A. No. 4374 of 2004, G.A. No. 4375 of 2004
Mr. Mitra further submitted that at the ad-interim stage the matter was
heard by the Hon'ble First Court for several days and the following ad-interim
order and he drew our attention to the judgment delivered by the Hon'ble First
Court reported in (2005) 2 WBLR Cal 311 (Priyamvada Devi Birla vs. Laxmi
Devi Newar & Ors.). He further drew our attention to paragraphs 35 and 36
After hearing the parties the Hon'ble Court was pleased to pass an ad-
interim order and further directed the parties to file their affidavits.
Mr. Mitra and Mr. Mukherjee alongwith others appearing on behalf of the
appellant further pointed out that the Hon'ble First Court on 19th May, 2006
finally disposed of the matter but did not pass any order for appointment of
mutual funds held by PDB personally and allowed the Executor to remain in
control and management of the same though the submissions were made before
the Hon'ble First Court that RSL had suppressed jewellery, ornaments, valuable
gold coins etc. Incidentally, all of which were however, found intact during the
inventory from the residence of PDB itself. Mr. Mitra further submitted that the
Hon'ble First Court had no lack of confidence in RSL and the Hon'ble First Court,
after, having come to the conclusion that there was no mismanagement under
RSL singled out the controlling block of shares held by PDB in MPB Group of
Companies for appointment of four Administrators over the same with drastic
powers, (a) to get the shares transferred in their own names and rectify shares
register of the companies for recording their names, (b) to get themselves
nominated on the Board of Directors and (c) to dissolve the existing Boards.
Mr. Mitra further submitted that there was any material disclosed
Administrator Pendente Lite over the controlling block of shares of MPB Group of
Companies? Other Birlas would like disintegration of MPB Group because other
Birlas are business rivals. This question falls for consideration in this appeal
and has been discussed hereinafter. An Officer of Court appointed over shares
would not have any voting right and he relied upon a decision reported in AIR
Judges Brief page 101 at 112] – property in shares does not vest in Receiver.
But the Hon'ble First Court has conferred unusual power to Administrators to get
since the death of PDB, no ground of mismanagement has been established, even
prima facie.
He further submitted that under Section 247 of the Indian Succession Act,
guidelines are mentioned in the said Section. Therefore, Courts have laid down
the guideline through judgments. Mr. Mitra submitted that the principles for
appointment of Administrators emerge from decided cases and the principles laid
Receiver and he pointed out that the said position has also been accepted by the
Hon'ble First Court and he drew our attention to page 45 line 7 of the said
judgment in this regard. Under Order 40 Rule 1 of the Code of Civil Procedure,
the appointment of Receiver should not only be just but must also be convenient.
He further pointed out that the respondents before the Hon'ble First Court
AIR 1933 Bom 342 (Pandurang Shamrao Laud & Ors. vs.
Dwarkadas Kalliandas & Ors.)
AIR 1951 Madras 393 (Adapala Subba Reddy & Anr. vs.
Adapala Andemma & Ors.)
393 (Adapala Subba Reddy & Anr. vs. Adapala Andemma & Ors.) the Court
decision reported in AIR 1952 Cal 418 (In Goods of Borendranath Mitter &
applying the principle of the Court of Chancery for the appointment of a Receiver,
(Mahamaya Dassi vs. Commissioner of Income Tax, W. B. III) the Court has
held as follows:
cases where the Court of Chancery would appoint a Receiver. The same principle
was followed in the decision reported in 13 CLJ 47 (Bhuban Mohini Debi vs.
Lite under Section 247 of the Indian Succession Act the criteria of necessity is
placed upon the decision reported in 13 CLJ 34 (Jogendra Lal Chowdhury vs.
Atindra Lal Chowdhury) where the Hon'ble Court has held that whether there
is anything against the appellant personally which would necessitate the Court
taking the Estate out of his hands. In the decision reported in 13 CLJ 47
(supra) the Court expects a necessity to be shown for the temporary grant
empowered to do it. Therefore, the Court held that the necessity for the
In the decision reported in 1866 LR 1 P & D 103 (Horrell vs. Witts &
vs. Laxmi Devi Newar & Anr.) the Court held that it is true as it appears from
the judicial pronouncement cited by the Learned Counsel at the bar in order to
pass any interim order relating to the administration of the Estate, case of
page 206 that before making a grant Pendente Lite the Court must be satisfied
He further drew our attention to Mortimer on Probate 2nd Edn. page 378
In the decision reported in AIR 1933 Bom 342 (supra) where the Court
has held that before exercising its jurisdiction to grant Administrator Pendente
Lite, it has also to be satisfied whether there is a necessity for such a grant has
been made. It has been held in the said decision that each case must depend
upon its own facts and upon the facts of that case, the appeal court came to the
Lite had been made out. Therefore, the Court laid down the property for
appointment of Administrator that the criteria would be whether the necessity for
a grant of administration Pendente Lite has been made out and on such criteria
14. It seems that the necessity rises when there are assets to be
collected and there is no representative to collect them and there
is a ‘bona fide’ litigation respecting the title to that
representations.”
(Bevan Vs. Houldsworth) the following facts were considered by the Court of
He further tried to contend before us that after a prima facie case for
challenging the validity of the Will is made out, the Court is to see whether there
is necessity to appoint Administrator and further that whether it will be just and
convenient to do so in the facts and circumstances of the case. The necessity
situation of every case and will vary from case to case. In this context the nature
b) Where there is debt due to the Estate and not being collected;
The following decisions were cited on behalf the Appellant in the above
context:
Amalnathan & Ors. vs. J. S. Victor Basco) it appears that ordinarily the
desire of the testatrix as to who should administer her Estate and execute her
Will, will have to be respected and an Executor appointed by the testator should
Executor would be detrimental to the Estates of the deceased and frustrate the
Will of the deceased. Some minor lapses here and there cannot be a ground to
remove the named Executor. Bearing in mind this principle it has to be seen
Mr. Mitra submitted that the following decisions were cited on behalf of the
In the decision reported in AIR 1933 Bom 342 (supra) where the Court
laid down the principle of law that a Receiver will not be appointed as against the
Mr. Mitra further tried to draw our attention to the decision reported in
AIR 1952 Cal 418 (supra) where the Court held that the Executor was alleged
to have removed and secreted cash, jewellery, and other movables and books of
accounts of the Estate with a view to deprive the applicants of their just rights in
the Estate and “the Executor is doing away with the Government Promissory Note
belonging to the Estate” – no such allegation has been made in our case, Mr.
Mitra submitted.
In the decision reported in 1948 (1) ALL E R 271 (supra) where the Court
held that in Horrell vs. Witts (2) the deceased had been in partnership and the
collecting assets and so on. The Court also held that there was somebody who
could collect the assets which appear to have consisted entirely of the deceased’s
Pendente Lite over the other assets of the Estate, namely portfolio shareholding
undivided 1/5th share in Kumaon Orchard, ornament jewellery and gold coins
and silver utensils, household articles and plates and antiques, etc. This clearly
reveals that the Hon'ble First Court had found that there was no necessity for
Hon'ble First Court has appointed the Administrator Pendente Lite only over the
when there was no necessity for appointment of Administrator Pendente Lite over
the other assets, what was the necessity for appointment of Administrator
reason has been given in the judgment by the Hon'ble First Court for
continuing the named Executor to manage the remaining part of the Estate. It
clearly reveals that the Hon'ble First Court did not consider RSL untrustworthy.
Hon'ble First Court in respect of the controlling block of shares over which
Administrators were appointed, or for that matter in respect of any other part of
the Estate. The respondents in their cross objection have not taken any ground
which will affect not only running business but also public
limited companies who are not parties to the probate proceeding
Mr. Mitra further contended that there are four manufacturing companies
investment companies and other companies within the said Group. Birlas in
those manufacturing companies. According to Birlas’ own case and their chart,
(see page 283 vol. I of the paperbook) M. P. Birla Group of Companies had
Optical Ltd
involved?
His further point that the Birla Ericsson Ltd. is a joint venture company
companies and there are a vast percentage of shares held by members of public
varying from 37% to 61%. The number of outside members vary from 10,000 to
40,000 in these four manufacturing companies. [see para 4.5 page 29 of the
companies who will be directly affected by the impugned order for appointment of
Administrator Pendente Lite were not given notice. In short, the persons
interested in proper management and well running of these companies have not
been before the Court. It is also submitted that it would not be “just” in the facts
and circumstances of this case to appoint Administrator Pendente Lite over block
Mr. Mitra drew our attention to page 3 of the judgment of the Hon'ble First
He further pointed out that His Lordship held that prayer (a) can be
According to him, both the Prayers (a) and (b) are for appointment of
Annexure ‘J’ (see page 293 volume I of the paperbook). The said prayers are
Hence, Mr. Mitra contended that Prayers (a) and (b) are slightly different in
language aimed at the same thing, namely taking over voting right and right of
companies will imply taking over management of the affairs of the company. The
Hon'ble First Court has directed joint Administrators to take control of the voting
right and also control of the companies by getting themselves appointed as
Directors in the Board of Directors of the companies and to dissolve the Board of
Directors of the companies, if necessary and with additional power for rectifying
the share registers in their own names and incorporating their names as
Hon'ble First Court has by-passed the provisions of the Companies Act and the
shareholders nor Directors have been empowered under the Companies Act to
dissolve the Board of Directors. It can only be done by Company Law Board in
proceedings under Section 397 and 398 read with Section 402 of the Companies
Act. All the statutory provisions have been by-passed by the Hon'ble First Court.
Although His Lordship held that the probate court has no jurisdiction to take
over management and control of separate juristic bodies, even then have passed
contrary to principle of law as laid down by the Hon'ble First Court. The order
this ground. The order of the Hon'ble First Court is contrary to law and,
therefore, suffers from vice of error of law on the face of the judgment.
According to his further submission, no case of necessity for appointment
of Administrator Pendente Lite over the part of Estate, namely controlling block of
shares of PDB has been established and in absence thereof, the Hon'ble First
preserve the Estate which has been achieved by an ad interim order of injunction
Mr. Mitra further pointed out that there is a subsisting order of injunction
restraining any dilution of controlling block of shares and all shares held by PDB
during her lifetime, which safeguards against any possible dilution of the most
valuable asset of the Estate, namely, the controlling block of shares in the M. P.
Birla Group of Companies. There is no allegation that there has been any
thereby act to his own detriment as the legatee. It is not the case that the main
assets being controlling block of shares has not been preserved by RSL as
Executor and in view of injunction, it is not even possible to deal with the same.
This order of injunction has been widely publicized through the media, both print
and electronic. It is also well settled law that any transfer of property in violation
of order of injunction, is void. Therefore, there was no necessity for further order.
Mr. Mitra’s further contention was on the point that no ground of any
In the ad interim order also the Hon'ble First Court held as follows:
controlling block of shares and intervention in running business are not at all
justified. The grounds mentioned by the Hon'ble First Court in the judgment do
not give rise to necessity for appointment of Administrator. Some of the grounds
have got no factual basis and are dehors the pleadings of the parties. The order
is not supported by reasons and based on non-existent facts and, therefore, liable
to be set aside.
Mr. Mitra further contended that even assuming the case of necessity is
has been appointed, namely running the businesses which includes separate
business. On the contrary, in the judgment of Justice Wilde noted with approval
in the case cited by the respondents reported in (1948) 1 All E R 271 (supra) it
Similar view was taken by this Hon'ble Court in AIR 1987 Cal 194 (State
Bank of India vs. Jayshree Ceramics Pvt. Ltd.) (see Sl. No. 8 of Judges’
Brief Page 70 at page 72) and 1988 (1) CLT 61 (Ambari Tea Company Ltd. &
Ors. vs. Manjushree Saha & ors.) (see Sl. No. 15 of Judges’ Brief Page 119
at page 141) where the Court held that the Receiver of Court should not be
appointed over running business. Mr. Mitra further submitted that the grounds
on which the Hon'ble First Court thought the necessity for appointment of
Administrator Pendente Lite arises, are not really grounds for necessity.
According to Mr. Mitra the Hon'ble First Court held that the dividend
income of the Estate and the mode of utilization thereof has not been disclosed to
the Court. According to Mr. Mitra, the said allegation was never made by the
respondents either in the pleadings or in course of argument, nor did the Hon'ble
First Court ask RSL to disclose such particulars. Had RSL been required to
furnish such particulars, he would have given full accounts. The grounds not
taken by the parties should not have been relied upon by the Court and that too
without giving an opportunity to deal with the same. This is failure of basic
procedural justice.
Furthermore, the Hon'ble First Court held that there is strong possibility of
proceeding being initiated or defended in connection with the Estate and for
collecting debts from the debtors. Mr. Mitra again pointed out that the said
allegation was neither pleaded nor argued by the respondents. According to him,
there is no proceeding pending, nor any debt outstanding except a loan given by
PDB to East India Investment Co. (P) Ltd., a company in which PDB is the major
shareholder. The Estate is such that there is very little likelihood of any
proceeding being initiated against the Estate or proceeding being filed by the
Estate for collection of debts. Dividends by the companies and mutual funds are
tainted person as because criminal proceeding has been instituted against him
and his challenge in the criminal prosecution at the initial stage failed right upto
Hon'ble Supreme Court. Mr. Mitra further pointed out that this criminal
proceeding has been instituted at the behest of the respondents which is clearly
proceeding is not one instituted by the State and there is no FIR against RSL.
appointed. This is again dehors pleadings. Criminal proceeding does not relate
to the period of Executorship of RSL. The Hon’ble Justice has held that, “the
criminal charges lebelled against him is a personal charge and this charge is
related to and in connection with the breach of trust which is alleged to have
taken place during the lifetime of the lady but not after her death.” No allegation
The Learned Judge further held that these are not bare allegations but
delay of production of Will, Executor taking substantial benefit under the Will,
Will. Mr. Mitra contended that apart from bare allegation in the affidavit in
support of caveat of unnaturalness of the Will and Executor taking benefit under
the Will, there are no allegations of change of lawyer or concealment or delay in
drew our attention to the affidavit in support of caveat filed by KKB as also other
affidavits which are similar and submitted that there is no whisper of such
allegation. Therefore, according to him, no case of necessity has been made out.
His Lordship held that there are serious allegations with documents as
with regard to competence of RSL nor any document disclosed in this connection.
No document is specified in the judgment, this is again dehors the pleadings and
records. Mr. Mitra pointed out even without the pleadings and documents, the
Court held that there are serious allegations with documents as regards the
Mr. Mitra pointed out that although in the judgment it is stated that
human mind is very flexible and consequently RSL cannot be trusted (see page
52 of the impugned judgment) but there are no pleadings to this effect. This is
not a ground taken in the petition. Administrators Pendente Lites are appointed
by the Hon'ble First Court are also human beings with human mind. He also
drew our attention to the fact that under the Indian Succession Act, there is no
provision for keeping control over the Executor during the pendency of the
pages 56 and 57 of the judgment, where the Learned Judge held that RSL should
have kept the Court informed about the transmission of shares of PDB in the
investment companies in his own name as Executor and that he should have
also sought the direction from the Court with regard to discovery of all the
movable and immovable properties of the deceased. This has already become a
suit being Testamentary Suit No. 6 of 2004. RSL is the plaintiff. All parties to
the suit will be bound by any order passed in the suit and are under the control
of the Court. The Court can always give directions to the parties to the suit.
According to Mr. Mitra, such findings are without any material and the
pleadings. The Hon'ble First Court further held that the properties of MPB have
got mixed up with the property of PDB and consequently Executor should be
appointed to take control and management of the Estate of MPB (see page 53 of
the impugned judgment). Mr. Mitra drew our attention to the fact that the
finding of the same Hon'ble Judge in the caveat discharge judgment is just
opposite which would be evident from a decision reported in AIR 2006 Cal 6
submissions made on behalf of the respondents that there was deemed assent to
the legacy in favour of PDB by the Executors of MPB’s alleged Will. Therefore, the
Estate of MPB has been fully administered and came under the ownership of PDB
His Lordship held that RSL’s challenge to the criminal prosecution failed
both at the initial stage as also before the Hon'ble Supreme Court. Mr. Mitra
further pointed out that RSL had not applied for quashing of the complaint in the
High Court nor in the appeal filed in Supreme Court. No notice has also been
issued by the Hon'ble Supreme Court upon him and he never appeared before the
misappropriation of fact.
The Hon'ble First Court further held that the prima facie document has
been produced before the Court showing that the mind of PDB and her husband
such document was disclosed before the Hon'ble First Court and, therefore, this
document disclosed before the Court to hold that a large number of charitable
trusts had been formed by MPB and PDB from their own resources and funds.
On the contrary, it is alleged that the Charitable Trusts/Societies have been set
His Lordship further held that RSL hurriedly got the shares of PDB in the
petition and before the completion of Shradh ceremony which would go to show
that he was anxious to take control of all the Companies including other assets
Birla Group of Companies are controlled. Therefore, RSL was under a duty and
obligation as Executor to take control of the shares and transmission was applied
for not in his personal name but as Executor to the Estate. The Court held that
the shares of PDB in the investment companies transferred in his own name
before filing of probate petition and before the completion of ‘shradh’ ceremony.
The said view is contrary according to Mr. Mitra since the Hon'ble First
Court is of the view that the Executor should take immediate control of the
Estate. Although the Hon'ble Judge held to the contrary which would be evident
Mr. Mitra further pointed out that RSL failed to disclose PDB’s undivided
1/5th share in Kumaon Orchards in the affidavit of assets filed by RSL which
were subsequently rectified at the earliest opportunity and the said amendment
of affidavit of assets was allowed by a consent order dated 16th July, 2004 and
the said ground has not been pleaded nor argued before the Hon'ble First Court.
Mr. Mitra contended that Sections 213 and 214 of the Indian Succession
Act applies only in legal proceedings and not in application for transmission of
shares and he relied upon a decision reported in (2001) 4 SCC 325 (Clarence
Pais & Ors. vs. Union of India) and submitted that the Hon'ble First Court held
that RSL should have taken permission of probate court before the rectification of
of shares of PDB in his own name as Executor. Articles of the companies are
contrary to the principles laid down in Sections 213 and 214 of the Indian
Succession Act. He pointed out that this case was also not pleaded or argued on
said subject matter is pending before the High Court for adjudication in Appeal
being APOT No. 398 of 2006. There is no provision in the Indian Succession Act
that an Executor has to apply before the probate court for permission for
obligation under Section 319 of the Indian Succession Act to collect assets of the
Estate.
He further pointed out that under Section 317 of the Indian Succession Act
probate and it is not the case of the respondents that any of the movable or
contrary, the Special Officers have inventorised the movables which were found
to be much more than what the respondents have stated in their affidavit of
It is also stated in the decision of the Hon'ble First Court that huge
RSL. Hence, Mr. Mitra contended that there are no pleadings, no documents, no
arguments put forward before the Hon'ble First Court and it is factually incorrect.
Mr. Pal, Learned Senior Advocate appearing on behalf of the respondents also
accepted the said position and contended that no mutual investment company
has ever been floated by RSL nor any part of the Estate of PDB invested in
Judgment). Mr. Mitra pointed out that there was no pleading, no argument, no
document. On the contrary, RSL was already the Chairman of all the five
Corporation Ltd., Universal Cables Ltd. and Vindhya Telelinks Ltd., the three
The Hon'ble First Court further stated in the said decision that the search
and discovery exercise have to be undertaken by persons to find out what is the
value of the assets left by the deceased and whether RSL’s version or Birla’s
correct. Mr. Mitra further contended that there was no such pleading nor it was
urged before the Court and the Hon'ble First Court has not directed valuation of
the assets of the Estate. Also, the Hon'ble First Court has not appointed
Administrator Pendente Lite over all the assets disclosed in the affidavit of assets.
The Hon'ble First Court has only taken the control of the Companies through
Administrator Pendente Lite who are directed to seek directions from His
Lordship. He further contended that it is not the function of the probate court to
ascertain the value of the assets especially when the maximum court fees have
since the Court for this reason alone, should not appoint Administrator.
businesses are best left in the hands of the person who knows the Estate best
and who had been entrusted with such function during the lifetime of the
testatrix. His Lordship also accepted and held that all these Companies used to
Lodha has surfaced but there is always possibility of jeopardy arising in future
(see page 59 of the impugned judgment). Mr. Mitra submitted on this point
in whom a testator reposed confidence and who is not shown to have betrayed
According to Mr. Mitra the Hon'ble First Court further held that it is not
known that wherefrom RSL is meeting the cost and expenses of fighting the good
numbers of litigation and specially the criminal prosecution in the High Court
and in the Apex Court and whether the litigation expenses are being met out from
the Estate or by the Executor from his own account is not known to Court. On
this point Mr. Mitra submitted that it is neither pleaded nor argued before the
Hon'ble First Court and he pointed out that RSL is also a man of independent
means. However, this part of the Judgment was also not supported by Mr. Pal,
hearing. In the year 2003-04, the share of profit of RSL from Lodha & Co.,
Kolkata was Rs. 37.51 lakhs; there was a sum of Rs. 84.09 lakhs to the credit of
his capital account and his drawings in that year from this firm was a sum of Rs.
22.56 lakhs.
Similarly, in the year 2003-04, the share of profit of RSL from Lodha & Co.,
Mumbai was Rs. 76.15 lakhs; there was a sum of Rs. 89.05 lakhs to the credit of
his capital account and his drawings in that year from this firm was a sum of Rs.
68.50 lakhs. So, the total drawings in the first year was more than Rs. 100 lakhs
from the two firms. He further contended that not a single penny spent from the
First Court are not the grounds taken by the respondents but the Hon'ble
First Court, which are imaginary and are not, supported by records. The
He further pointed out that the Hon'ble First Court has proceeded on the
However, most of these so-called admitted facts are not at all admitted and
seriously contested both in pleadings as also in course of argument. However,
c) Under the alleged Wills of 13th July, 1982 the 3 daughters of KKB
have been given the gold coins, ornaments, paintings, sculptures
and jewellery. The Learned Judge has proceeded on wrong
basis that RSL has admitted that the entire Estate has
vested in charitable trust.
facts” in fact, are not admitted at all and thereby the entire judgment is
vitiated.
The block of shares were held by PDB at the time of her death and the
nature of the Estate is nothing but the block of shares held by PDB in M. P. Birla
Group of Companies.
It is submitted that there is no dispute that main asset of the Estate is the
further submitted that the affidavits of assets filed by RSL disclose full details of
as disclosed by RSL tally with that of the respondents also (see page 83 vol. I of
the Paper Book). Items are identical. All these shares have been taken
possession of by the Executor and there is no allegation that RSL has not
the petition for probate of the alleged Will of PDB dated 13th July, 1982 would
listed with the major Stock Exchanges in India. It is also submitted that these 4
public limited companies, namely, Birla Corporation Ltd., Birla Ericsson Optical
Ltd., Universal Cables Ltd. and Vindhya Telelinks Ltd., which are manufacturing
companies have large number of public shareholders as also large block of shares
to the present proceeding. The shares in all the aforesaid 4 companies are widely
traded in several Stock Exchanges (see page 2024 vol. VII of Paper Book). The
He further pointed out that the other assets comprising the Estate,
shares. Combined value of the gold coins, jewellery etc. would be worth around
Rs. 1 crore, only 0.04% of the total value of the Estate as given by the
respondents, yet the major part of the argument of the respondents was how
valuable coins and jewellery were allegedly suppressed by RSL, however, found
intact during inventory in PDB’s residence in Birla Park. It is also admitted from
the facts as well as from the petition filed before the Hon'ble First Court by the
Mr. Mitra further contended the part of the Estate over which the
the Hon'ble First Court held that the probate court has no jurisdiction to do. In
fact, during the hearing of the appeal, the respondents by praying for
appointment of Administrator Pendente Lite over that part of the Estate of PDB
“to act in accordance with law” viz. Administrators over the shareholding of PDB,
are in fact trying to achieve indirectly what they know cannot be achieved
with power to exercise voting rights in respect thereof, that would enable Court
Officers to play with the fate of the Companies within M. P. Birla Group of
over of Rs. 1780.32/- crores. Even the news of appointment of Receiver over the
joint venture partners, managerial cadre, suppliers, customers and any one
having dealings with these companies who would become wary to deal with these
That is one of the reasons for non-appointment of Receiver over the companies.
shares will diminish in value and this will have devastating effect all round in a
running business through Court Officers and affecting interest of large number of
third parties, namely, the employees, public shareholders, Banks and Financial
Institutions etc.
Mr. Mitra further relied upon a decision reported in AIR 1951 Mad 393
(supra) and submitted that the court found existence of circumstances both
Estate. Yet the Court did not appoint Receiver/Administrator over the Estate and
allowed the two brothers (who were in control of the Estate) to remain in control
that in the decision of 1948 (1) All E R 271 (supra) the court held as follows:
In the instant case, Mr. Mitra pointed out, more so because the Companies
are being run smoothly and more profitably and share values and dividend
the M. P. Birla Group of Companies was under the control and management of
MPB and thereafter since 1990 it was under PDB. PDB was the Chairman of all
the 4 public limited manufacturing companies during her life time and the
regard to involvement of RSL with the management and affairs of the M. P. Birla
Birla Group even during the lifetime of MPB [see Affidavit in support of Caveat
ii) After the death of MPB in 1990, PDB reposed complete trust and
para 15(g) page 155 vol. I]. As a matter of fact RSL was appointed founder
iii) PDB was at all material times accustomed to act as per the wishes of
RSL [see Affidavit in support of Caveat para 15(g) & 15(o) pages 155 to 156
v) RSL has been at the helm of affairs and actively involved in the
management of the 4 manufacturing companies for last several years [See A/R to
Administrator petition para 8(a) page 890 Volume III of the Paper Book].
the Estate, he is in control and was put in control by PDB and Administrator
Pendente Lite is being sought for by displacing him and removing him from
control. It is also submitted that RSL has been closely involved with the M. P.
of various M. P. Birla Group of Companies since long years and the said fact
would be evident from the following records which are reproduced hereunder:
In July, 2005, RSL became Chairman of the Birla Ericsson Optical Ltd.,
It further appears from the fact that a Board Meeting of Birla Corporation
Ltd. held on 15th September, 2001 chaired by PDB from the Minute of the
The minutes was signed by PDB as the Chairman of the Company. Mr.
Mitra submitted that all the facts go to show that PDB had confidence in the
managerial ability of RSL and after her death, the foreign partners, Financial
have not been able to show any change in the mode of control and management
during the life time of PDB, has since been appointed the Chairman of the
companies. At each and every Annual General Meeting of these Companies since
the demise of PDB, RSL has been virtually and unanimously re-elected as the
Banks and Financial Institutions and also public shareholders have voted in
support of RSL and have expressed their full trust and confidence in him. This
would be further evident from the substantial increase in the price of shares of
Thereafter, Mr. Mitra contended that it would thus appear that these
argument of the respondents regarding the increase of the share price because of
Chambers of Commerce and Industry, one of the apex trade and industrial bodies
of the country and has also served inter alia on various committees including
Prime Minister’s Council on Trade & Industry and Central Direct Taxes Advisory
National Securities Depository Ltd., Mumbai, SBI Life Insurance Company Ltd.,
Mumbai and several other important Boards etc. He continued that RSL has also
Companies Act. RSL has in the past served as a Director and also Executive
Committee Member of the Central Board of the SBI and has been the past
largest selling business daily and IMRB International, RSL has been placed at the
rank of 48.
Mr. Mitra pointed out that other Birlas have no stake in M. P. Birla Group
their prayer for appointment of Administrators have made a false case that the
Companies of the Group at the instance of RSL and this would upset the well
persons have already been Directors of and/or associated with the following
Companies of the M. P. Birla Group of Companies since long and during the life
time of PDB.
Birla Corporation Ltd. in the year 1996; then he became a Director of Universal
Cables Ltd. in the year 1998; in 2004 he became the Director of Punjab Produce
Holdings Ltd.; in the year 2004 he became the Director of Vindhya Telelinks Ltd.;
in the year 2004 he became the Director of Mazbat Investments Pvt. Ltd.;
thereafter he became a Director of Mazbat Properties Pvt. Ltd. in the year 2004;
thereafter in the year 2004 he became a Director of The Punjab Produce &
Trading Co. Pvt. Ltd.; he became a Director of Gwalior Webbing Co. Pvt. Ltd. in
the year 2004; he became a Director of Baroda Agents & Trading Co. Pvt. Ltd. in
the year 2004 and thereafter in the year 2004 he became a Director of East India
Baroda Agents & Trading Co. Pvt. Ltd. in the year 1988; then in the year 1995 he
became a Director of Gwalior Webbing Co. Pvt. Ltd.; thereafter in the year 1995
he became a Director of East India Investment Co. Pvt. Ltd.; in the year 1995 he
became a Director of Punjab Produce Holdings Pvt. Ltd.; in the year 2001 he
became a Director of Canberra Traders Pvt. Ltd.; thereafter in the year 1999 he
Punjab Produce & Trading Co. Pvt. Ltd. in the year 1990; thereafter he became a
Director of Punjab Produce Holdings Ltd. in the year 1999; thereafter he became
a Director of Mazbat Tea Estates Ltd. in the year 1999; thereafter he became a
Director of Shreyas Projects & Trading Co. Ltd. in the year 1996.
Gwalior Webbing Co. Pvt. Ltd. in the year 1984; thereafter in the year 1999 he
became a Director of Baroda Agents & Trading Co. Pvt. Ltd.; thereafter in the year
as the Director of Shreyas Projects & Trading Co. Ltd. upon resignation of SKD,
Mr. Mitra further contended that the Birlas have also questioned the
independent Directors are all eminent persons from different walks of life and he
drew our attention to annexure ‘L’ appearing at page 644 vol. III of the Paper
Hence, he submitted that the application which has been filed by the
contended that Birlas are business rivals. They have cement Companies, namely,
Grasim Industries Ltd., Kesoram Industries Ltd., Century Textiles & Industries
Ltd., Mysore Cements Ltd. etc. Birla Corporation Ltd. the flagship company of
their private interest to ruin a rival company. With this oblique motive the
Judgment, the Hon'ble First Court after close scrutiny had held that no
dismissed on the ground that respondents/Birlas have not approached the Court
with clean hands. From their applications and affidavits it would be evident that
they are trying to advance the cause of their respective businesses and not the M.
P. Birla Group. They want to pave the way for weakening and disintegration of
M. P. Birla Group and this would be evident from the following facts:
2005. Mr. Mitra drew our attention to the full particulars given
Smelting & Refining Company Ltd. has been taken out of the
According to Mr. Mitra, after a lapse of over 5 months after the demise of
filed the applications for Administrator Pendente Lite on 16th December, 2004.
The cause of action of the Administrator petition appearing at page 115, vol. 1
March, 2004, this closure was during the life time of PDB.
Ltd., this sale also took place during the life time of PDB when
submitted that had he not done so, the Birlas would have
this was the allegation made by the Birlas against RSL when large
experience.
e) Mismanagement of M. P. Birla Group of Companies under the
control of RSL.
Mr. Mitra further submitted that all these above allegations in the
Administrator Pendente Lite petition were squarely dealt with by RSL in his
dismissal petition appearing at page 436, vol. II of the paper book; Affidavit-
of-Opposition appearing at page 763, vol. III of the paper book and
He further pointed out that realizing the apparent falsity and weakness in
the allegations made in the Administrator petition, the Birlas through KNT in
Reply running into around 900 pages, where the Birlas sought to run a
made out in the petition appearing at para 8(c) page 893 vol. III
and thus the Group benefited. It was also suppressed that the
e) Apart from Soorah Jute Mills and Birlas Synthetics, some other
The divisions which were closed down were in fact all loss making
and most had been closed down during the life time of PDB, full
page 1901-1907, vol. VI, Para 15 & 18, page 1851, vol. VI of
so that RSL could exercise control over the Company. Mr. Mitra
time of PDB; ii) Other Birla Companies have similar practice; iii)
interfere.
Mr. Mitra also pointed out that apart from the above, several other points
were taken in the Hon'ble First Court though not of any substance. At the
points taken in the pleadings. The following are the particulars of the various
grounds were taken in the administrator petition and affidavit in reply and which
have not been argued at the hearing of the appeals. He drew our attention to the
Mr. Mitra submitted that at the time of the appeal only the following
grounds have been urged by the three Learned Senior Counsel appearing on
left in the hands of RSL. (Dealt with at para 8.2 at page 47 of the
Paper Book)
ii) Serious challenge to the said last Will. (Dealt with para 8.3 at page
iii) RSL is not in management of day to day affairs of the M.P. Birla
Book.)
in the years 1999 and 2001. (Dealt with at para 8.6 at page 58 of
Mr. Mitra further contended that the vastness and complexity in itself
complexity of the Estate as in this case would be a ground in itself for rejecting
control of the complex Estate and when the testatrix herself had put the
Executor/RSL in charge of such complex Estate during the life time and for at
least last 5 years before her demise. He further drew our attention to AIR 1933
Bom 342 (supra) and submitted that the appointment would show that the
He further submitted that it is the case of the Birlas that the Estate of PDB
constitute part of M. P. Birla Group of Companies. It is also the case of the Birlas
that PDB had been controlling interest in few investment companies by way of
in AIR 1987 Cal 194 (supra) and AIR 1951 Madras 393 (supra) in support of
such contention.
and control of separate juristic bodies. However, at the end, the Hon'ble Single
Judge has done just the reverse which is the subject matter of challenge and it
would be evident that RSL has been involved in running of the M. P. Birla Group
of Companies since 1991 and was the chosen successor of PDB to take over the
It would also be borne in mind that the M. P. Birla Group of Companies are
running profitably and the Birlas have not even alleged that these Companies are
not being properly managed and it may be noted that the Estate is such that
who had admittedly reposed full faith and confidence on RSL by electing and re-
electing him as Chairman of the Companies year after year by supporting all the
Administrator would be against the wishes of these shareholders who are not
With regard to the serious challenge to the Will by the Birlas, Mr. Mitra,
Mr. Shaktinath Mukherjee and others contended that the last Will and Codicil
Supreme Court, according to the instruction of PDB and has been witnessed by
P. L. Agarwal, Senior Partner of Khaitan & Company who has also affirmed an
affidavit dated 7th July, 2004 as an attesting witness, which is also part of the
probate petition appearing at page 17 of vol. I of the paper book. The other
witnesses are Dr. Madan S. Vaidya, senior Doctor attached to Belle Vue Clinic
and M. P. Sharma, PDB’s personal secretary. The Affidavit dated 8th July, 2004
has also been filed by Dr. Madan S. Vaidya, is also part of the probate petition
before the Registrar of Assurances, III, Calcutta at the time of registration of the
L. Agarwal was also the witness to the alleged Wills of PDB and MPB dated 13th
I) PDB was in good health at the time of execution of her last Will
(a) Her various foreign trips since 1999 including pleasure trips to
whereof are appearing at page 818 vol. III of the paper book).
of which are appearing at page 850 of vol. III of the paper book).
II) PDB had sufficient mental capacity to make the Will which would
(c) In the letter dated 19th December, 1998, (see page 717 of vol. III
the Birlas or any other person that the Will was an unnatural Will. PDB’s
relationship with other members of Birla family as well as her brother KNT was
not such as would lead to the inference that they should have been natural heirs
of PDB. Significantly, the intestate heiresses of PDB namely RDM and LDN do
not claim in their Affidavit in support of caveat that it would be natural for PDB
to give her Estate to them or they would be her natural heirs. On the other hand,
PDB’s relationship with KNT and several male members of the Birla family was
far from cordial. None of the male members of the Birla family were ever involved
with PDB in running her businesses. Mr. Mitra drew our attention to the
occasions when you have condemned Uncle BK & SKB and Auntie
b) Letter of YB dated 8th April, 1998 where YB states that PDB finds him
c) Hand written note of PDB showing MPB was unhappy about division
d) Letter of KNT dated 18th January, 1996 and 19th December, 1998 to
PDB, appearing at page 699 and 717 of vol. III of the paper book.
He further pointed out that it is the case of the Birlas that PDB had
reposed complete faith trust and confidence on RSL during her lifetime and the
Will is in English language which is also the language of the alleged Will dated
13th July, 1982, relied upon by the Birlas. There cannot be any dispute with
the basis of bare pleadings not supported by any evidence and in fact contrary to
challenge, the Birlas made out a contradictory case on facts. There is allegation
(Gurdev Kaur & Ors. vs. Kaki & Ors.) and contended that it has been held that
there is a presumption of due execution of a Will where it is shown that the Will
has been executed and attested in accordance with the requirements of statute.
16th Edition page 39; AIR 2005 SC 52 (Meenakshiammal & Ors. vs.
Chandrashekaran & Anr.) and AIR 2005 Cal 212 (Chanchal Kumar Das &
Ors. vs. Pasupati Nath Das & Ors.). On the question of burden of proof, onus
to prove forgery, undue influence and coercion lies on the person who alleges.
He further contended that the application for probate of the said last Will
and Codicil was filed on 19th July, 2004. Thereafter, the Birlas filed an
application dated 17th August, 2004 for probate of the alleged Will of PDB dated
13th July, 1982. This alleged Will dated 13th July, 1982 is on the face of it a
seriously disputed document. Apart from the fact that by the said last Will and
Codicil, earlier Will, if any, has been revoked, a few features of the alleged 1982
Will of PDB would go to show the apparent weakness in the case of the Birlas:
1. Unregistered Will.
the original of the said alleged Will. According to the Birlas, this
alleged Will was kept in an envelope for the last 22 years which was
was allegedly opened, the Birlas however claimed that after the
alleged Will was discovered they have not preserved the same,
3. The Birlas case is that the alleged Wills of 1982 were under
however the first named Executor in MPB’s alleged Will is PDB, and
Executor; they are also legatees in each other’s Wills – thus, the
Birlas between the time of PDB’s demise on 3rd July, 2004 and 30th
July, 2004 when there was for the first time reference to this
6. Some documents stating that MPB died intestate are signed during
follows:-
book).
Book).
d) Deed of Declaration dated 12th March, 1997 executed
Mr. Mitra also pointed out that the suit being C. S. No. 221 of 2004 filed by
the Birlas for enforcement of alleged mutual Wills of MPB and PDB of 1982 is
ready for hearing but the Respondents/Birlas are opposing early hearing of the
said suit.
Mr. Mitra further drew our attention to the fact that Birlas have also
contended that there is a serious challenge put up by them to the probate of the
said last Will and Codicil of PDB and on this ground, Administrators can be
in the present case there can be no serious or bona fide challenge to the said last
Will and Codicil of PDB. In the circumstances, he contended, at least prima facie
there can be no serious challenge to the genuineness and validity of the said last
Will and Codicil of PDB. The said last Will and Codicil is at least on the existing
facts and pleadings quiet unimpeachable as would be evident from the facts and
management of the M. P. Birla Group of Companies and this contention was not
raised before the Hon'ble First Court or in the Petition or in the Affidavit-in-Reply
He contended that PDB during her lifetime had allowed day to day affairs of
would be evident from the Will where it has been specifically stated that, “to the
extent I have been exercising” would mean the same pattern of management as
RSL that he is acting with undue haste in taking control a few days after the
The further allegation which has been made out that 1/5th undivided share
Mitra’s submission, the application for amendment of the Affidavit of Assets made
in December, 2004. The application was not opposed and the affidavit of assets
possibly be conceived that RSL had nothing to gain by not including this asset in
the affidavit of assets. Petition has been filed by RSL for direction upon KKB to
the death of PDB which was not opposed by RSL and the Special Officer recorded
full co-operation received from RSL. In course of inventory, all antiques, ivory
etc. mentioned in the inventory petition found. More than 300 coins found intact
and preserved in boxes with all notes and papers at Birla Park and he drew our
the paper book and page 3285 at para 51 of vol. X of the paper book and at
movable articles stands only about 0.04% of the total Estate. Several silver and
other articles including ivory items found in Allahabad, (our attention drawn at
page 144 & 147 of the 1st Inventory Report). Best possible security
arrangement has been made for the aforesaid four properties. Birlas have also
engaged security guards at the main gate of the compound at Birla Park.
properties under Section 319 of the said Act cannot mean physical collection.
Mr. Mitra contended that Affidavit of Assets is relevant only for the purpose of
court fees and he relied upon the decisions reported in AIR 1980 Delhi 57 (In
re: Anita Rewal); AIR 1965 Punjab 138 (Channan Devi vs. Desraj
Ramchand & Ors.) and Section 32 of Court Fees Act read with Schedule III.
He pointed out that there was no objection with regard to Rights of Issues
of shares of Birla Corporation Ltd. at a high premium in the year 1999 and 2001
during lifetime of PDB. Then now why such objection after seven years? This is
nothing but for the control of M. P. Birla Group over Birla Corporation Ltd. He
Vol. VI and Annexure ‘L’ at pages 1918-1925 of Vol. VI of the Paper Book.
Mr. Mitra submitted that allegations made that Investment of the funds of
Birla Corporation Ltd. through PLC Securities Ltd. – a company controlled by RSL
in mutual funds. He pointed out that such investments in mutual funds through
PSC Securities Ltd. has been continuing since prior to the demise of PDB at least
mutual funds, invested through PLC Securities Ltd. during the lifetime of PDB.
allegation that PLC Securities Ltd. realising any extra benefit or any loss caused
He further pointed out that PDB used to invest most of her own surplus
money in mutual funds which would be evident from the affidavit of assets
annexed to the probate petition filed by Birlas as also the probate petition of RSL.
altering the system established and followed during the life time of PDB who was
the Chairman of Birla Corporation Ltd. It is to be noted that Birla Corporation
Ltd. is a separate legal entity. It is not the case of the Birlas that the funds of the
Estate of PDB are being invested through PLC Securities Ltd. and neither this
The further allegation has been made that RSL as Executor to the Estate of
after her demise and in this context Mr. Mitra submitted that without any
material basis and contrary to the real facts, the Birlas have been making big
issue of the fact that the transmission of shares took place on 15th July, 2004
which according to them was the day of the ‘Shradh’ Ceremony of PDB.
Mr. Mitra contended that on 15th July, 2004 all the Companies of the M. P.
Birla Group as also the Companies belonging to the other Birlas functioned
normally. Official business was transacted normally. In fact several staff of the
M. P. Birla Group of Companies did over time on that day as also on other days
during the month of July, 2004 as would appear from the chart disclosed,
appearing at page 1930 vol. VI of the paper book. The said chart would show
that similar over time work was done during the month of July every year, inter
alia for finalisation of accounts. In fact, all the M. P. Birla Group of Companies
observed one day’s mourning on 5th July, 2004 as a mark of respect to PDB.
Only on this day all the Companies of the said M. P. Birla Group were closed.
He further submitted that it also to be noted that the Birlas within 72
hours of the demise of PDB took over the management and control of the Indian
Smelting & Refining Company Ltd. which was a part of M. P. Birla Group of
Companies as admitted by Birlas in the plaint being C.S. No. 221 of 2004. Birlas
have laid much stress on the submission made on behalf of RSL before the
Company Law Board being C.P. No. 825/111(4)/ERB/2004. The following is the
effected with promptitude after the demise of PDB. It is the obligation of RSL as
It is not the case of the Birlas that RSL has wrongly exercised the voting
rights in respect of these shares or that RSL caused any loss to the Estate by
improved over the last years and this consequently bears testimony to the
(Commissioner, Jalandhar Division & Ors. vs. Mohan Krishan Abrol & Anr.
with Mohan Krishan Abrol vs. State of Punjab) where the Hon'ble Court held
as follows:
He further contended that there is a bar under Section 213 of the Indian
of Probate of the Will before Executor can claim any right thereunder is only
applicable in a Court of law. The Executor may rely upon the Will for any other
purpose like transmission of shares of the deceased on the basis of the Will,
opening of accounts of the Estate etc. and he relied upon the decision reported in
He further submitted that comments were made with regard to the conduct
of RSL in producing four keys in course of inventory by the Special Officers and
made over by PDB to him when she left for Belle Vue Nursing
over to the Court showing how these 4 keys led/could have led
in terms of the order dated 11th May, 2005, RSL’s Advocates and
that those keys were made over to the Special Officers on 15th
hiding these keys initially and handing them over to the Joint
f) The Birlas have not been able to show the disappearance of even
one valuable item from Birla Park. Nine months after the death
g) He further pointed out that there are two sets of security guards
present at the Birla Park, one at the common entrance and the
other at the entrance for the residences of PDB, KKB and BKB.
PDB’s residence.
The further point that was urged before the Court that the pendency of
as also the pendency of criminal proceeding. Mr. Mitra contended that these
event, these proceedings cannot be made subject matter of or taken into account
in the present proceeding. He further pointed out that all these proceedings as
have been instituted at the behest of BKB. So far the criminal proceedings in
employee of Essel Mining Ltd., an Aditya Birla Group Company, our attention
was drawn in the affidavit of R. P. Pansari dated 16th February, 2005 at page
2019 vol. VII of the paper book. None of these proceedings have been started
suo motu by the Institute or by the State. These are Private Complaints. There
RSL, the Birlas themselves cannot thereafter contend that RSL is being proceeded
Mr. Mitra further pointed out that the Hon'ble First Court discussed the
as Executor to the Estate. This is not a ground urged by the parties in their
pleadings. Human beings are appointed Executors. Court Officers are also
“may” used in Section 247 of the said Act and the same as judicially interpreted
during the last 2 centuries will become redundant and in that case, the
appointed under a Will, who will be a human being, will have flexible mind and
Mr. Mitra further contended that the question is whether the Hon'ble First
Court had any jurisdiction to appoint Administrator Pendente Lite when there
was no ground of Administrator Pendente Lite has been made out by the
(i) In the decision of (1990) Supp SCC 727 para 9 (Wander Ltd. vs.
preserve status quo. By the impugned order the status quo since
in status quo.
(ii) Ignoring the settled principles of law and settled principle of law in
(b) necessity, which the caveators failed to make out and (c) just and
(iii) Relying on the said decisions of (1997) 2 CLJ 409 (Pratima Dutta
vs. Nilima Seal) and (1990) Supp SCC 727 (supra), he submitted
capriciously.
been argued in this appeal by the respondents and the Hon'ble First Court
applied wrong principles of law which is the ground for interference in case of
proceedings.
have tried to taint. The criminal case has been initiated by the
Birlas, in which even charge has not yet been framed. The State
has not filed the criminal case. This is also not a ground taken
ix. No pleading that the Estate is in medio. The Hon'ble First Court
relied on the ground that the Estate was in medio, although not
charge of the Estate and the Learned Judge had also held so.
x. Conjecture regarding cost of litigation and no such case is made
argument.
present case, the Hon'ble First Court has exercised its discretion
would be evident inter alia from the fact that the Learned Judge
logic that human mind is flexible and accordingly what RSL may
of law as laid down by the Hon'ble First Court. The order for
Mukherjee & Ors. vs. Satish Chandra Giri & Ors.) in support
of his contention.
Hence, Mr. Mitra concluded that the appellant humbly prays before the
Appeal Court so that the order of the Learned Trial Judge is set aside. However,
the appellant renews his assurance/undertaking not to deal with and/or transfer
any of the assets and properties constituting the Estate of PDB as more fully
stated in the affidavit of assets filed by the appellant in connection with the
present probate petition as also in the affidavit of assets filed by the Birlas in
connection with the probate petition filed by them. He submitted that the ad-
interim order passed by the Hon'ble First Court reported in the decision (2005) 2
WBLR 311 (supra) may be continued. He also submits that the second part of
the ad-interim order may kindly be reconsidered in the light of the affidavits since
then filed by the parties and may kindly be withdrawn, since no case in support
of confirmation of the above order has been shown. The closure of a business
assets/obtaining finances from Banks and Financial Institutions are usual things
factories/plants etc. Such order as would put fetter on usual course of corporate
that any further or other order would be beyond the scope of proceedings and
the GPB submitted before us that for appointing Administrator Pendente Lite
application and it is necessary for such appointment having regard to the nature
of the Estate. The Hon'ble First Court has exercised the discretion in appointing
arbitrary, capricious or against the principle of law and he relied upon the
decisions reported in (1990) Suppl. SCC 727 (supra) and 13 CLJ 34 (supra) in
this context and submitted that the Appeal Court should not interfere unless the
Court was convinced that the discretion had not been fairly exercised.
He further submitted that the Hon'ble First Court found that there exists
bonafide dispute arising out of serious challenge to the validity of the Will and
‘Testament dated 18th April, 1999. In these circumstances, the Court held that a
tainted person should not be allowed to manage the Estate. The Hon'ble First
Court further held that the challenge on the grounds of undue influence,
Executor taking substantial benefit under the Will, change of lawyer for
The Hon'ble First Court further held that in 1982 two Mutual Wills were
executed by MPB and PDB whereby properties were given away to charity.
Probate applications of these wills are pending and RSL has been contesting the
cannot be in charge of MPB’s Estate. The appellant further challenged that RSL
is not tainted because he is not yet an accused which is not correct because once
a formal complaint is made in Court which has been done in this case, RSL is an
application. According to the appellant, the grounds are stereotyped and general.
What appellant has missed is that if those grounds are accepted then no probate
protect and preserve the Estate and secure safety free from waste and
He further pointed out that the Hon'ble First Court held that the
Administrator Pendente Lite would be more beneficial to the Estate than the
Executor, who is the sole beneficiary. The Estate is indisputably vast consisting
of controlling block of shares, jewelleries, ivory, silver, rare gold coins, artifacts
etc. of high value and real properties of considerable worth. The application of
RDM (Radha Devi Mohatta) would show that the corporate assets are valued at
about Rs. 2,500 crores whereas the affidavit of assets filed by the Executor would
show the valuation disclosed by the appellant is only Rs. 4 Crores. According to
him, it is true that PDB’s share holding in Birla Corporation Ltd. was negligible
but the investment companies of PDB held over 60% of shares in the Birla
were also not stated in the affidavit of assets and the other immovable properties
also now inventorised by the Special Officers appointed by the Court which were
also concealed by RSL. So, according to him, RSL prayed for probate of the real
properties mentioned in the Codicil but did not include those in the affidavit of
assets. Such act would indicate the personal interest of the Executor which
prevail over the beneficial interest of the Estate and he relied upon the decisions
reported in 1948 All E R 271 (supra) and AIR 1933 Bom 342 (supra) in
support of such contention and submitted that the Estate is of considerable value
and extent, and for the safeguarding and preservation of it, proper arrangements
is to be made especially when very wide discretionary powers have been given to
He further pointed out that the Executor is the sole beneficiary under the
Will. Relying on the decision of 1930 PC 24 (Vellaswamy Servai & Ors. vs.
Administrator Pendente Lite was that “the respondent, the propounder of the Will,
on the Boards of different companies were neither transparent nor clean and
(Krishna Mohan Kul alias Nani Charan Kul & Anr. vs. Pratima Maity &
another and the latter is in a position of active confidence the burden of proving
vs. John Rawlinson Ford) submitted that a person in a fiduciary position is not
entitled to make a profit, even he is not allowed to put himself in a position where
his interests and duty conflict. Therefore, he contended that the concealment of
high value movable assets without proper explanation, and in breach of statutory
duty, is not only example of such a conflict but also surrender of duty to his
personal interest.
preparation of the Will. Imprint of RSL is so clear and loud on the Will and the
codicil that only probability is that he took part in preparation of the Will and the
codicil. Before such Will was executed by PDB, it has to be accepted that RSL
discussed and prevailed upon PDB to execute the said Will. Reliance was placed
upon the decisions of AIR 1959 SC 443 (H. Venkatachala Iyengar vs. B. N.
submitting that the Court held that the respondent took a leading part in giving
instructions for the Will and procuring the execution and registration.
Accordingly, he submitted that it would be unsafe to give the Estate in the hands
of an Executor.
He further pointed out that the Executor acted just contrary to his duty
mandated by the Section. He alone had access to the houses and all the assets
that were located therein. He concealed assets namely high value jewelleries,
gold coins, ivory and silver articles, etc. for more than a year. In fact two
caveators LDN and RDM by filing application forced their disclosure. He also
contended that there is probability that the jewelleries and many valuable articles
found by the Special officers as well as those removed earlier leaving large
number of empty boxes, empty safe and pouches found in the strong room and
other safes and almirah were concealed and ad hoc valuation was given
concealing those valuable assets for personal gain. Obviously, welfare of the
Estate cannot be safe in the hands of the Executor and as such Administrator
Learned Advocate-General further drew our attention to the fact that this
and such a huge number of boxes etc. had been lying empty. RSL never
disclosed to court, which he should have done immediately after the filing of the
rare gold coins etc. as also empty containers found by Special officers were kept
concealed. Moreover, RSL never made any inventory of the jewelleries, gold coins,
ivory, silver, artifacts etc. after the death of PDB. The inventory made by the
submitted that the finding of the jewelleries etc. could not be stated to have been
kept intact and this statement is intended to cloak the personal interest of the
Executor.
According to him, RSL produced 4 number of keys of the almirahs and
safes etc. and further stated that he did not have access to almirahs, safes,
cupboards, boxes, pouches, strong room etc. because when PDB went to Belle
Vue Clinic she only gave four almost useless keys to RSL. Thereafter, at the
instance of Court, the Joint Special Officers after broke open the safes and
almirahs etc., to have the locks of the safes and almirahs etc., recovered most
valuables from there. Therefore, he submitted that RSL was trying to conceal
those valuable articles. Under the codicil he accepted the legacy as to the real
properties as personal properties of PDB and RSL applied for probate of those
house properties.
No. 553 of 2005), RSL disclosed that PDB was using those houses as guest
houses and various companies owned those houses and ‘Prayer (c)’ would show
his personal interest is in conflict with his duty. Grant of probate would
jeopardize the title of the companies. Hence, he submitted that RSL is clearly an
unreliable person and as such welfare of the Estate cannot be safe in the hands
Accountant. He contended that RSL has deliberately made false statement with
regard to the shradh ceremony of PDB. Attempt was made to hide the
grief and on shradh ceremony day. RSL made blatantly false statement with
regard to the medical files of PDB. He also stated that medical files were with M.
P. Sharma who was the Secretary of PDB and has now left the job. The old
medical files were secreted in Kolkata house to deprive the caveators from
He also pointed out that RSL is making various financial gains through his
firm PLC securities which is a 100% subsidiary of Lodha Capital Markets Limited.
According to him, RSL to have immediate control over all the companies has
Company. The appellant has made an illusory claim that the performance of RSL
as a corporate leader has been remarkable and on the basis of such assertion the
Cement Division of Birla Corporation did very well under his leadership. He
further added that it would appear that the performance of the industries of
cement.
(Radha Devi Mohatta) submitted before us that the principal point which has
been argued before the Hon'ble Appellate Court that whether or not the Hon'ble
First Court justified, in the facts and circumstances of the case, to appoint the
Administrators Pendente Lite under Section 247 of the Indian Succession Act
which provides that pending any suit touching the validity of the Will of a
deceased person or for obtaining or revoking any probate or any grant of letters of
deceased person, who shall have all the rights and powers of a general
Administrator other than the right of distributing such Estate and every such
Administrator shall be subject to the immediate control of the Court and shall act
under its discretion. Hence, he pointed out the other points that have been urged
on behalf of the respondents and member of the Birla family which are as follows
The other points that were urged by him before us were on the ground of
passed by the Hon'ble First Court should not be lightly interfered with by the
Hon'ble Appellate Court unless the exercise of discretion by the Hon'ble First
the case, reliance was placed on the following decisions cited at Bar on behalf of
respondents and members of Birla family is that under Section 247 of the said
Act, the principles applicable are that there must be a suit touching the validity
of the Will of a deceased person and that the Court may appoint an Administrator
of the Estate of such deceased person. The principal decisions that have been
decided both in India and in England relating to an appointment of Administrator
Mr. Mookherjee further submitted that the other reasons and grounds for
appointment of Administrator Pendente Lite which are peculiar to the facts and
which was exercised by the testatrix during her life time. The application
appointment not only over the movable and immovable properties of the
testatrix, but also over the voting rights and the right to control
vol. 1 of the paper book. He submitted that the above position laid
down in the decision reported in AIR 1973 Cal 450 (Hindustan Motors
b) The credibility of RSL is doubtful as will appear not only from his
conduct before execution of the alleged Will of 1999, but even after such
execution also. The relevant and material facts in this regard are stated
hereunder:
i) Mr. and Mrs. M P. Birla had executed the Mutual Wills on or about 13th
July, 1982 whereby they made a bequest of all their assets to charity.
During their life time they created trusts in 1988 in conformity with the
said Mutual Wills but it appears that the Trusts were dissolved on or
about 15th April, 1999 and the purported Will which is the subject
matter of the instant proceeding was executed three days thereafter, i.e.,
on or about 18th April, 1999 and the concept of Mutual Wills has been
the case of 2006 (2) SCC 757 (Shiva Nath Prasad vs. State of West
ii) RSL without waiting for the alleged Will of 1999 to be probated, applied
testatrix on July 15, 2004 and gave effect to the transmission of shares.
Such investment companies of which RSL was the Chairman, did not
even insist for probate of the Will for the transmission to be effected.
Transmission thus took place on the date of the shradh ceremony of the
East India Investment Co. Ltd. has been held not bonafide by the
c) He further pointed out that RSL also lacks in integrity as will appear,
ii) RSL did not disclose the value of testatrix’s interest in Kumaon
accumulations even though the same were reflected in the trial balance
which according to RSL formed the basis of his affidavit of assets filed
by him alongwith his probate application and relied upon by RSL in his
iii) Attempt was made by RSL to conceal the assets and properties of
the Joint Special Officers, attempt was made by RSL to conceal the
Kolkata.
v) RSL being the Executor of testatrix did not show the existence of the
declaration regarding the number of persons in the firm Lodha & Co. to
procure more business than what his firm was eligible for. The said
ii) RSL made incorrect statements in the Affidavit with regard to Shradh
ceremony of PDB.
iii) Changes in directorship not disclosed by RSL. The same may be evident
from the notice dated 21st July, 2004 convening the AGM of Birla
notice it has not been mentioned that RSL was also a director of
Mazbat Tea Estate, Mazbat Properties Pvt. Ltd. and Mazbat Investment
Pvt. Ltd., wherein his appointment had already taken place on June 14,
iv) Investments made by the MPB Group routed through Lodha Capital
himself. The said fact has been denied by Lodha in his supplementary
III of Paper Book) with regard to the medical file of Testatrix which
would be evident from the Minutes of the Meeting of the Joint Special
Officers on April 19, 2005 (page 1593 of Vol. V of the Paper Book).
vi) The Hon'ble First Court for the first instance, directed an inventory to be
and other movable assets were found. (see page 2915 Vol. IX, page
2854 Vol. IX, page 2909 Vol IX, Page 2863 Vol. IX of the Paper
Book.).
vii) During the course of inventory various empty bags, pouches and boxes
were found.
One of the points that have been urged strenuously on behalf of RSL is
particulars and cogent grounds have not been made out for the grant of such
appointment. It is now well-settled that even if all the grounds are not to be
found in the four corners of the petition but if such grounds appear from the
subsequent affidavits filed on behalf of the parties then these may also be taken
into account for the purpose of granting the relief claimed and he placed reliance
upon the decisions reported in AIR 1966 Cal 512 (Ramsankar Prasad vs.
Sindri Iron Foundry Pvt. Ltd.) and AIR 1951 SC 177 (Firm Srinivas Ram
Kumar vs. Mahabir Prasad & Ors.) and submitted that the Hon'ble Supreme
Court held that there would be nothing improper in giving the plaintiff a decree
(Kedar Lal Seal & Anr. vs. Hari Lal Seal) contending that the Court would be
slow to throw out a claim on a mere technicality of pleading when the substance
of the thing is there and no prejudice is caused to the other side, however,
the instant case the Court shall judge the situation as a whole without taking a
narrow legalistic view with regard to the lack of pleading in the petition.
He further pointed out that there is a distinction between Sections 247 and
301 of the said Act of 1925. Section 301 provides for removal of Executor or
Administrator and provision be made for his successor and the Section goes on to
lay down that the High Court may on application suspend remove or discharge
any private Executor or Administrator and provide for the succession of another
person to the office of any such Executor or Administrator who ceases to hold
office and the vesting in such successor of any property belonging to the Estate.
The case of the applicants for appointment of Administrator Pendente Lite is not
for the removal of the Executor but for the making of an interlocutory order
under Section 247 of the said Act. According to him, RSL claims to be a non-
executive Director in all the companies of the M. P. Group and he being a mere
figure head is not involved in the day to day affairs of the companies which are all
professionally managed.
Hence, Mr. Mookherjee submitted that RSL should not have any objection
if an Administrator Pendente Lite is appointed. Be it noted that RSL has not been
removed in his capacity of Executor but only an interlocutory order has been
passed under Section 247 in respect of the Estate of the maker of the alleged
Will. Such appointment can be made without deciding whether the Executor is a
good man or a bad man and without also harping on the subject of his
there is a serious challenge to the purported Will of 1999. There is also a serious
challenge to the appointment of RSL as Executor of such Will, the Estate is vast
and of substantial value and the sole Executor has also been made the sole
beneficiary of the said Will and thus there is a serious possibility of the interest of
the beneficiary coming into conflict with his duties as Executor of the Will. By
reason of these factors it is necessary to have the appointment of Administrator
Pendente Lite in the instant bonafide litigation touching the validity of the said
Will and such a valuable Estate should not be left in the hands of RSL during the
Mr. Mookherjee further drew our attention to the decisions reported in AIR
1933 Bom 342 (supra); AIR 1952 Cal 418 (supra) and (1948) 1 ALL E R
principle which stands apart from the principles enunciated in the said
decisions. He further pointed out that Section 247 of the said Act does not
order under the said Section can be passed. The use of word “may” strongly
suggests so that the order should be passed at the discretion of the Court.
Exercise of the discretion naturally would depend upon the Court’s perception,
based on the materials and facts brought to its notice, regardless of pleadings
testamentary matters for conscience of the Court has to be satisfied not only in
also in the matter of protection and preservation of the Estate even at the
intermediary stage until the question of grant is finally decided either way. This
under Section 247 of the said Act even without any application being made by a
party to the Court. This position is made clear by contrasting the provisions of
He further submitted that under Section 301 of the said Act, the Court
whereas under Section 247 of the said Act the Court is free to appoint an
argument has been that neither there is any evidence of waste, mismanagement
or siphoning off of the fund of the Estate, nor is there any ground for
apprehension, having regard to the nature of the Estate and conduct of the
to ascertain whether those circumstances exist for apprehension that the Estate
is not safe in the hands of the Executor and such question was raised in the
following manner:
probate application?
uninspiring?
Mr. Mookherjee further pointed out that it is the case of the appellant that
the principal assets of the Estate are shares in various companies and no
attempt has been done to transfer any share and any attempt to do so would
oversimplifies the situation and glosses over the fact that the value of controlled
block of shares is not the share certificates but in the power one can exert on the
had a very modest income shown in her tax return but being the corporate head,
on the strength of her share-holdings, she enjoyed power and influence over
every affairs and finance of all the companies of M. P. Birla Group, whereas RSL
occupies the same position and exerts the same power. Therefore, RSL can
abuse his position to the detriment of the Estate in a subtle and a secretive
regulations and provisions of the Companies Act, may not be apparent in the
short run.
The argument on behalf of the appellant is that only 0.4% of the estimated
total value of the Estate discovered from the strong room of the deceased. It has
also been urged on behalf of the appellant that the jewellery, coins etc. discovered
from the strong room that the inventory made by the Special Officers confirmed
that the contents of the strong room were intact. This argument, according to
whether anything was missing or removed since the death of testatrix. The whole
affair over the discovery of the Treasure Trove and conduct of RSL would show
be trusted any further with the Estate. In fact, the biggest safe with combination
lock inside the strong room when broke open was found to be totally empty (see
page 2909, vol. IX of the paper book). Arguments advanced on behalf of RSL
that the criminal cases were also been filed against RSL with regard to the
improper and unprofessional conduct in the affairs of his running the business
as a Chartered Accountant and with regard thereto nothing has been proved so
Court should not be influenced by the said factors. Hence, Mr. Mookherjee
submitted that at least the complaint would show and can support a prima facie
view for the Court to decide the question whether RSL should be allowed to
RSL made by the testatrix to urge that those were measures of her confidence in
him. According to him, so long PDB was alive and at the helm of affair, chance of
his abusing and misusing the position was entirely unlikely and, in any event,
this notion falls flat when one looks at the ground reality after her death. Hence,
Clause 4 of her purported Will dated 18th April, 1999 virtually bequeath every
conceivable and inconceivable right over the Estate (which in any event is under
challenge), she neither in her long association with him nor in course of her
ultimate journey to Belle Vue Clinic when she made over 4 keys to him, had
taken him into confidence to say that there was a hidden strong room in the
house and which locks would be opened by which of the 4 keys. Eventually, only
one of the 4 keys could be used to open door inside children bedroom in the first
floor of the house. It will also appear from the relevant minutes/inventories that
whatever keys of safe, almirah etc. were found were mostly duplicate, and were
so described in the tags attached to them. This abysmal ignorance of such vital
matters clearly proves that despite all his ingratiating attempts to win confidence
It is also submitted that the Court is not to adopt a crude and quantifiable
test in this regard but should try to foresee, on the basis of known facts, whether
extent that RSL can inflict irreparable loss and injury. Administrator Pendente
Lite is in the nature of a quatrinet action and negative precaution and he relied
upon a decision reported in 2005 (2) WBLR (Cal) 311 (supra) in support of his
to locate the focal points. For that purpose, the Court must consider the
vastness of the Estate, and the nature of the Estate. It is not like usual cases
e.g., immovable properties like land and building; movables of usual type like
motor cars, furnitures, cash, jewellery etc. but of a special type comprising
antiques and coins of mourya age which are invaluable. Further, the shares of
represent the most valuable constituent of the Estate. He also drew our attention
to Clause 4 of the Will in question and submitted that the Will itself expressly
refers to control.
According to Mr. Pal, the Indian Succession Act, 1925 (hereinafter referred
to as the said Act of 1925) to be considered for the judicial exercise of discretion
the Will, vastness of the Estate, nature of the Estate, Executor’s conduct and
performance as Executor and when the Executor is the sole beneficiary, a general
Pendente Lite.
He further tried to contend that the cases which identify necessity as an
important factor do not, however, lay down (and it cannot be so) that the
must emerge from the above factors. Sometimes these factors may overlap and it
is also not necessary that all these factors must be present cumulatively i.e. all
must exist on their own strength. In the exercise of discretion in a given case one
or more factors may suffice and in this context he relied upon a decision reported
He further submitted that the said Act of 1925 has specially provided for
Administrator Pendente Lite inspite of the fact that there are provisions relating
adequately, properly and more securely so that the ultimate wishes of the
testator (who is no longer there) are fulfilled and the ultimate beneficiaries of his
more accentuated because under Section 211 of the said Act the Estate of the
deceased vests in the Executor and he has power to intermediately deal with
them i.e. before probate is granted. For an example, he can create Third party
rights over the Estate; he may adopt policies which according to his subjective
assessment are good for the company, which may, however, turn out to be bad;
he may arrange control to pass even without disposing of shares. Mr. Pal
submitted that it is true that he has not done so as of today. Section 247 of the
said Act cannot wait in the wings for the mismanagement and mishandling of the
RSL as an Executor has made no attempt to collect the assets is gross dereliction
of his duties (Section 319 of the said Act) in, inter alia, not accounting for or
taking charge of the invaluable items of artifacts, ancient coins, jewellery etc. at
handed over to him keys before leaving her home for the last time on her way to
He further pointed out that the perception of threat is also a guiding factor
when the destination of the Estate is, ex hypothesis unknown as of today since
only the final decree in this probate suit (including all appellate stages) will
determine. According to him, he may not act in his own interest when the sword
of the Court in the form of application for Administrator Pendente Lite is hanging
over the Executor. But it is reasonable to form the view when the sword is not
there his acts and deeds may be guided by his self interest and not the interest of
the Estate. This is so because the human mind can and is often too frail to
words of Justice Holmes, the life of the law is experience not logic. A factor
which is relevant in this case in particular is the animosity between the parties at
a personal level. Negative mental attitude which has descended to a sole
beneficiary cum Executor is most likely to have negative results for the Estate
course, i.e. vastness of the Estate and its complexity and when the Executor is
sole beneficiary and with regard thereto he drew our attention to the decision
Mr. Pal further contended that Section 247 of the said Act applies when a
suit is filed “touching the validity of the Will” and the final decision of course will
be arrived at while pronouncing the final judgment in the probate suit after final
hearing. The prima facie aspect will also be related to the aspect of necessity
since in such a case the court will be prima facie satisfied that there is no will at
all and the Executor is, therefore, prima facie in wrongful possession of the
Estate.
Undoubtedly, discretion is conferred upon the court. However, Mr. Pal placed
his reliance upon a decision reported in AIR 1976 SC 232 (Swarn Singh &
Anr. vs. State of Punjab & Ors.) and submitted that the impugned judgment
has referred to any one factor viz. vastness of the Estate or the Executor being
Therefore, if the impugned judgment has referred to any one factor, then the
He further pointed out that if the discretion exercised by the Hon'ble First
Court is perverse i.e. non-existent and irrelevant factors, then only the Appellate
Court will interfere with the exercise of such discretion and he relied upon the
decisions reported in 1990 (Supp) SCC 727 (supra); 1997 (2) CLJ 409 (supra)
He further placed his reliance upon the decision reported in (2006) 2 SCC
757 (supra) and contended that the Hon'ble Supreme Court has described RSL
that the Court would permit a person accused of criminal breach of trust, when
the allegations so made against RSL in the criminal complaint are found by the
akin to a trustee, to control and manage huge and vast Estate, comprising inter
He further drew our attention to the order passed by the Company Law
Board (hereinafter referred to as “the CLB”) dated 28th June, 2006 and
(supra); 10 CLJ 263 (supra) and AIR 1952 Cal 418 (supra) and submitted
that on the basis of the principles laid down in the said decisions, the Hon'ble
First Court found that the Estate is in medio and huge amounts invested in
the appellant has failed to prove that the judgment delivered by the Hon'ble First
companies which have no public holding and the codicil gives power to
found. This is quite apart from many others for which the Receiver
application was made, based on returns etc. filed before the concerned
statutory authorities.
Mr. Pal further pointed out that it would be evident from the Administrator
Pendente Lite petition of RDM which adopts the affidavit in support of the Caveat
filed by RDM to be treated as part of the petition. The following are the brief
facts from the Administrator Pendente Lite petition of RDM and the affidavit in
c) Criminal proceedings.
757 (supra) and submitted that a prima facie case has been made out against
RSL and others by the judgment of Hon'ble Supreme Court dated 3rd February,
shares held by PDB in the name of RSL, the Executor. Such transmission has
been held to be malafide and the conduct found to be fraudulent by the order
follows:
representatives stated that RSL was not aware of the same, was
discovered.
• Three iron safes were found out of which the largest one in the
• From another iron safe jewellery and gold ornaments were recovered.
firearms were recovered from the steel almirah in the strong room.
RSL in the affidavit of assets nor had RSL taken any step to collect the same for
safe custody. He submitted that the grounds of necessity would depend on the
factors.
He further pointed out the reliability and credibility of Executor qua-
Executor in the facts and circumstances of the given case and contended that
RSL made false statement on oath regarding the date on which the shradh
ceremony was held. The Joint Special Officers discovered the files at Gurusaday
Road during their inventory while RSL denied that the files were with him.
companies controlled by him. A fiduciary must not act in a manner that there is
a conflict of interest and duty. Such persons loose their capacity to be impartial
and fair.
According to Mr. Pal, RSL should not be allowed to be the Executor and he
is a human being with all the frailties of human character. He submitted that it
a profit; he is not allowed to put himself in a position where his interest and duty
conflict. Mr. Pal submitted that this rule is, as has been said, founded upon
consideration that human nature being what it is, there is danger, in such
interest rather than by duty and thus prejudicing those whom he was bound to
those companies and the concept of necessity has been spelt out and is relevant
application and in this context he relied upon the decisions of (1948) 1 All E R
271 (supra); AIR 1933 Bombay 342 (supra) and AIR 1951 Madras 393
(supra). According to him, the vastness may require more than one person to
administer the Estate. It can only fit into necessity and not waste or
specie.
the test would be what a prudent Executor would do. The breaking open of the
locks of the safes, almirahs and the invaluable things found therein have already
been stated which would show that RSL as the Executor has failed to perform
his duty to collect the assets of the Estate of considerable value. The vastness of
has been cited and Mr. Pal further drew our attention to the decisions reported
in (1948) 1 ALL ER 271 (supra); 126 ITR 748 (supra) AIR 1933 Bombay 342
(supra) and AIR 1951 Madras 393 (supra) in support of his contention.
He further submitted that during the inventory the antiques and ancient
coins were found out by the Special Officers. The items of ivory are of immense
value and the gross undervaluation of the Estate in the affidavit of assets
and integrity of RSL qua Executor and no confidence can be placed upon RSL to
continue to be in sole and exclusive charge of the Estate under the impugned
Will. Admittedly, the Estate comprises PDB’s control through the shareholders
and with such control one decides regarding the policies, accounts etc. If the
According to his further submission, the status of the companies has been
preserved and the concerned companies are doing well under RSL as Executor.
doing well it is not because of RSL, but general buoyancy in the economy, and
infrastructural demand, cement, cables etc. and RSL cannot claim any credit
thereof. All have been done at the instance of professional executives since the
further submitted that the criminal case which is pending, is a negative factor
against RSL’s continuance. His integrity is under criminal trial and relates to
Gaurishanker pointing out that Dr. Gaurishanker was the draftsman of the Will.
In fact, in the said biography he himself stated that both MPB and PDB decided
to dedicate their property to the Charity and took the decision at the temple of
is irrelevant.
Mr. Pal further submitted that the Birlas have no personal interest and it is
also clear that PDB had charities only in the mind till the death of MPB until RSL
descended on the scene. According to him, the submission of the appellant that
RSL should not be displaced because he has not betrayed any trust also cannot
further pointed out that the findings of the Special Officer’s are not against RSL
otherwise.
The argument has also been put forwarded by Mr. Pal to the argument of
the appellant that the interim injunction would be a sufficient protection and,
therefore, Administrator Pendente Lite should not have been appointed. If the
interim injunction were sufficient, then the concept of Administrator Pendente
Lite would be redundant. Court grants interim injunction till a better appraisal
discern whether the injunction is violated because he will find many ways of
of injunction would only bind him and not his stooges through whom he can
the filing of the Administrator Pendente Lite application, Mr. Pal submitted that
the Special Officers’ discoveries were subsequent events and the impugned
judgment proceeded not on the basis of wrong assumptions, but on the findings,
a) Company proceedings before CLB were against companies and not RSL;
like Receiver and the Court does not appoint the Receiver over the companies,
Mr. Pal answered that the impugned judgment does not appoint any
Administrator Pendente Lite over the companies as such and the management of
the companies are not replaced or suspended. The Joint Administrators have
First Court being prima facie satisfied gave certain directions including inter alia
that:
that all rights attaching to such controlling shares and all matters
b) RSL will not act as a Chairman or director in the board of any of the
instant case with some other cases where bequests are made of
professional managers/executives.
of such persons whom the court could think proper to appoint and
refused.
companies.
Mr. Sarkar, Learned Senior Advocate appearing for KKB adopted the
In reply, Mr. Mitra pointed out that the allegation of sale of mutual land
(Soorah Jute Mills) are incorrect and unfounded and the same were discussed at
the meeting of the Board of Directors on 25th July, 2001 (during PDB’s lifetime).
In respect of the Birlas, the decision was taken to sell idle plant and machineries
during the lifetime of PDB due to poor financial performance. The decision was
taken to sell the same in the meeting of the Board of Directors in the presence of
PDB and finally approved the sell on 15th June, 2004 to M/s. Kalantry Textiles
The allegation was made that the cement worth Rs. 1 crore was stolen from
Birla Corporation Ltd. and such loss of cement was worth Rs. 15 lakhs – that too
during the lifetime of PDB. Total group turnover of Rs. 2000 crores – pilferage of
persons, officers dismissed, FIR lodged and accused persons arrested. It is also
submitted that the surplus fund of Birla Corporation Ltd. is invested in mutual
funds while at the same time, the company was borrowing money from Banks
Mr. Mitra further pointed out that the investment of mutual funds made
for last many years and at least for last 5 years during the life time of PDB. This
is not a new practice introduced by RSL, he submitted and there is no case that
Birla Corporation Ltd. has suffered any loss out of investment in mutual funds.
Thereafter, he pointed out that apart from Soorah Jute Mills and Birla
Synthetics, other units of M. P. Birla Group of Companies have been closed down
during the lifetime of PDB. Committee of the Directors was constituted when
PDB was present. The appointees were highly qualified and experienced, some of
whom have left other Birla Groups to join M. P. Birla Group and no case has
been made out or that they are in any way related to RSL.
According to him, pre-payment of loans is in interest of Companies, any
other suggestion is absolutely absurd and no case has been made out so that the
companies were prejudiced. Mr. Mitra submitted that the case of AIR 1933 Bom
342 (supra) in fact supports the case of the appellant and in the said decision,
Administrator/Receiver is in the usual course. The said facts of the said case is
totally different from the instant case and the Court cannot appoint an
flexible.
He further drew our attention to the decision of AIR 1951 Madras 393
(supra) and pointed out that the factual matrix is totally different from the
instant case. In the present case, PDB as a shareholder could not be treated as a
co-owner of the assets even the companies in which she held substantial shares
i.e. the five investment companies. The Hon'ble First Court in the ad-interim
judgment also held the same point of view. There is also no allegation that
dividends are not being realized nor any proof any kind of impropriety the
dividends are being deposited in Bank Account opened in the name of the
Executor.
271 (supra) has no application to the facts and circumstances of the present
case. The factors that a) the defendants were not in a position to collect the
income arising out of the Estate nor in a position to enforce the claim of the
Estate, b) the Estate was in jeopardy, were considered by the Court of Appeal
the case of the Birlas that RSL is unwilling or not in a position to take control of
the Estate and the income arising out of the Estate or that the income arising out
On the other hand, the Birlas complained of haste in which RSL took possession
418 (supra), a case of necessity was made out on existing facts which would be
allegation that amounts due to the Estate which are not being collected. There is
him, it is not a case of appointment of Administrator and thus, the said case has
no application in the facts and circumstances of this case. In the decision of AIR
1973 Cal 450 (supra), he pointed out that the said judgment has been cited by
the Birlas in support of the proposition that the control is an asset. This is a
judgment delivered in respect of the MRTP Act. The Act contains a definition of
‘inter connected undertaking’ vide Section 2(g). Paragraph 23 of the judgment
makes it clear that reference to ‘control’ in this judgment is in view of the object
and scheme of the aforesaid statute as also in view of the wide and
comprehensive connotation given to the term ‘control’ under the said Act. Thus,
relevance to our case. Hence, this case has no application to the instant case.
He further drew our attention to the decision reported in AIR 1976 SC 232
(supra) and contended that this case is based on limits of judicial review under
Article 226 of the Constitution of India where the order of domestic Tribunal is
(supra) was cited for the proposition that subsequent events can be taken into
consideration by the Appeal Court and the Hon'ble Supreme Court had taken the
note of subsequent event which went to the root of the matter. The subsequent
event discovered that the appellant was claiming to be adopted son of the original
land holder and, accordingly, entitled to the possession of the disputed land, was
in fact not so and that he had made such a claim on the basis of forged and
fabricated documents. The Hon'ble Supreme Court did not hold that all
that this case was cited for the proposition that the Appeal Court will not
interfere with the exercise of discretion of the Court at the first instance unless
such discretion has been shown to have been exercised arbitrarily or capriciously
or perversely or where the Court has ignored the settled principles of law
according to him, the Hon'ble First Court exercised its discretion arbitrarily,
perversely and ignoring settled principles of law which is evident inter alia from
the fact that the Learned Judge after coming to the conclusion on facts that RSL
as Executor was not found to have mismanaged the Estate, thereafter proceeded
respect of the public limited companies on the sole logic that human mind is
nothing but surmise and conjecture which has vitiated the judgment under
RSL. It may also be noted that this was a case of passing-off where the interim
injunction was refused by the Hon'ble First Court and granted by the Appeal
Court. The Hon'ble Supreme Court did not restore the Trial Courts’ order on the
principle that the appeal court ought not to have interfered with the exercise of
discretion by the Hon'ble First Court but after full re-assessment of the materials
on record.
He further pointed out that the decisions reported in 1997 (2) CLJ 409
(supra); 1999 (1) CHN 10 (supra) and 1983 AC 191 (supra), these cases have
also been cited for the same propositions as in the case of (1990) Suppl. SCC
727 (supra).
In the case of AIR 1966 Cal 512 (supra) the Court should not restrict the
scope of enquiry to the petition alone but subsequent affidavits in the petition
should also be taken note of. For this proposition, the Birlas have relied upon
this case which is a decision on the practice and procedure of hearing petitions
under Section 397/398 of the Companies Act has no application in the facts and
He further pointed out that the case reported in 1896 AC 44 (supra) has
no application to the present case. This was relied upon for the proposition that
interest rather than duty, thus, “prejudicing those whom he was bound to
protect”.
Supreme Court proceeded in the matter after coming to the conclusion that a
specific finding on facts that there was no defect in the affidavit in support of the
writ petition. The most important distinction between this judgment of the
Hon'ble Supreme Court and our case is that the Learned Judge without calling
upon the petitioner to file a proper affidavit proceeded on the basis of the
In this case, KNT has affirmed the whole of the Administrator petition as true to
his knowledge.
In the decision reported in 2006 (2) SCC 757 (supra), Mr. Mitra submitted
that the Birlas have referred to para 3 of the said judgment and particularly to
the words ‘undisputed facts’ as if to imply that it was not disputed by RSL before
the Hon'ble Supreme Court that MPB and PDB had executed Mutual Wills in
1982. Hence, this submission is factually wrong. Firstly, RSL is not the
appellant in the Hon'ble Supreme Court and Notice was not ordered to be issued
by the Court to him and neither did he appear through Counsel. Secondly, the
‘undisputed facts’ which have been referred to in the aforesaid paragraph of the
quashing whereof was sought for, firstly in the High Court and thereafter in the
the nature of a demurer application, facts alleged are taken to be true and the
basis of a quashing petition is that the facts alleged even if taken to be true do
not disclose any offence as against the petitioner. Any other interpretation
would lead to an absurdity. If the contention of the Birlas is that it has not been
disputed before the Hon'ble Supreme Court by the petitioner therein that in
1982, the couple had executed Mutual Wills and that the same is an admitted
position, then the Birlas also have conceded that it is an equally admitted
position that PDB had indeed executed her last Will in 1999 and bequeathed all
her properties to RSL – it has been recorded in the same para of the judgment
that PDB executed her last Will of 1999. On the other hand, the Birlas are
disputing this very execution which is the subject matter of these probate
proceeding.
the petitioner before the Hon'ble Supreme Court is recorded that “the
complainant’s case” is that “two alleged Wills allegedly made by the couple on
13th July, 1982 claiming the same to be mutual Wills”. Counsel for the Birlas
next placed the part of the judgment where the Hon'ble Supreme Court lays down
The case reported in 1993 (4) ALL E R 129 (Re: Dale) is only referred to in the
said para without any approval. In the same para, the Hon'ble Supreme Court
holds that mutuality of Wills depends on circumstances, inter alia that the last
Will has been made by one of the testators without reference to revocation of
previous Wills. In the present case by the Will of 1999, PDB expressly cancelled
all previous Wills. Thus, satisfying the test laid down by the Hon'ble Supreme
Court it can be argued by RSL that alleged Wills of 1982 are not mutual Wills
and the later Will of 1999 of PDB revokes the earlier and contains a statement to
clear in para 48 where the Hon'ble Court states that “at this stage” the Hon'ble
Court is required to “read the complaint as it is” and that it suffices to state “at
this stage of the matter” that the couple had executed mutual Wills in 1981 and
1982. If it was the Court’s intention to declare that the couple had indeed made
mutual Wills, the Hon'ble Court would not have use the words “at this stage”.
The statements in para 29 have also to be read in the same light as para 48.
Para 50 of the judgment also makes it clear that no opinion has been expressed
that all the aforesaid facts are observations of the Hon'ble Supreme Court and
1981 SC 379 (supra) is for the purpose of protection under Article 20(3) of the
complaint is made against the person and, in this context, the Hon'ble Supreme
He further drew our attention to the case of AIR 1983 ALL 90 (supra) and
pointed out that the carbon copy of the alleged Wills of 1982 on the basis whereof
the Birlas’ probate petitions have been filed should be treated as originals as
these were allegedly duly executed and attested for the above proposition, this
case was cited. In the said judgment the testator had signed the carbon copy in
the presence of the attesting witnesses and the phrase “true copy” had been
Therefore, according to him, no such case has been made out by the Birlas.
Their case is that KNT had received a sealed envelope with a direction to open the
same on the death of both MPB and PDB. Then, why the alleged envelope given
by PDB to KNT should contain copies and not the originals of these alleged Wills,
the alleged envelope even though this was opened and the alleged Wills taken out
after the disputes had started with RSL. Khitan & Co. also were unable to give
inspection of the alleged envelope a few days after it was opened as it was
allegedly ‘not preserved’, after having been allegedly preserved for 22 long years
since 1982 which is an incredulous statement and destroys the very case of the
We have heard the Learned Advocates for the parties extensively. We have
After analysing the facts of this case and after perusing the materials on
record placed before us and the decisions cited before us on the question of
appointment of Administrator Pendente Lite, the question arose that whether the
Respondents/Birlas in their pleadings have been able to make out a case that
misconduct, just and convenient which are the grounds for appointment of
Administrator Pendente Lite. Section 247 of the Indian Succession Act, 1925
provides as follows:
The words “may appoint” in Section 247 of the said Act indicate that the
Court has discretion in the matter. That discretion is judicious and not
out a further principle that where there is no representative to collect the assets
and there is a “bona fide” litigation in respect of the title to that representation,
then the Court interferes not because of the contest but because there is no
Pendente Lite. It has been specifically stated that the Court of probate would
grant “administrator pendente lite” in all cases where the necessity for the grant
is made out.
Shaha vs. Sureswar Shaha Paramanick (supra); in Bhuban Mohini Debi vs.
Kiranbala Devi (supra) and in Promilabala vs. B. Jyotindra (20 CWN 576).
(supra), His Lordship after referring Bellew vs. Bellew (supra) observed that “
… the Court of probate would grant administrator pendente lite in all cases
where necessity for the grant is made out.” Therefore, the question is, what is
Arunendranath Mitter (supra) , the Court also specifically speaks about the
same principle and further held that the reason of the thing seems to be this:
that though a man makes a Will and appoints an executor, yet if the executor be
as a necessity.
We have also been able to find out that the Court of Chancery appoints the
is the common interest of all parties that the Court should prevent a scramble
and a Receiver is readily appointed (see Kerr on Receiver, 9th Edn., page 6).
During the contest, touching the validity of the Will, there is a necessity
when the deceased’s property is, “in medio”. Therefore, applying the principle of
Court of Chancery for the appointment of a Receiver the Court may appoint an
Administrator Pendente Lite (see AIR 1952 Cal 418 (supra)). In the said
wherefrom we have been able to find out that no grant was made in the facts and
circumstances of that case when the Court did not think fit to appoint an
administrator pendente lite because the widow could legally give receipts for rent
she would realise which she was entitled to do under the provisions of Land
It appears that the Hon'ble First Court has specifically held the following:
Mr. Mitra submitted before us that the said two Prayers are identical.
According to him, if Prayer (b) is refused, then Prayer (a) cannot be granted. We
shall deal with that submission subsequently but before that we have to find out
the grounds on which the Court came to the conclusion and appointed the
allegations in the Judgement and found out that the purported Will propounded
Codicil relied upon and propounded by the Executor is also manufactured and
wholly unnatural. In our opinion, such finding can not be accepted at this stage
The allegation is also that the lady was not at all in the good health and
condition and suffers from various ailments and used to travel abroad for
medical treatment and within the clutch and influence of the executor. But that
allegation has to be treated at this stage only as an allegation against the Will
The other ground that there was a mutual Will was executed on 13th July,
1982 by MPB and PDB. In terms of the said Will, the lady did not have any right
husband, but the suspicion comes in mind when it appears to us that the
original mutual Wills were never produced before the Court. The envelope which
was received by Tapuriah, was also not produced since it is allegedly missing.
Only Copy of the Will was tried to be relied upon on the basis of which the
application for probate of the mutual Wills have been filed. The question arose
with regard to the genuineness of the said mutual Wills and the suit is also
The alleged Executors appointed by PDB and her husband MPB had
already applied for grant of probate of the said Wills of 1982 and the said Wills
have also been challenged before the Court by RSL and it is to be noted that the
same is pending for adjudication for grant of probate and is a contentious cause.
The question also arose with regard to breach of trust and a suit has also
been filed pending for adjudication before the Court. Those facts, in our
It further appears from the allegations which have been narrated by the
Hon'ble Judge that the Will and Codicil is a manufactured and procured
document and the same is wholly unnatural and there is no reason to exclude
any relation amongst the Members of the Birla family. We are unable to
Also the fact that cannot be brushed aside is that during her lifetime, PDB
has acted as the owner of all the properties left by her husband as if she
inherited those properties and at no point of time none of the Executors of MPB
came forward or objected to or applied for probate of the said Will of MPB. It is
also to be noted as pointed out by Mr. Mitra that the lady inherited those
properties and acted accordingly, which would give an impression that there was
no Will which was executed at the time of death of MPB and he did not leave any
last Will and testament and also there is no document to show that ever during
the lifetime of PDB, any of the Birlas or their family members ever whispered
for the parties that in view of the execution of the two said mutual Wills, a
separate suit for specific performance has been filed and the same is pending for
adjudication. We have also informed that the said suit is ready for hearing.
The further allegation that has been made is that RSL deliberately
suppressed the real value of the Estate and as it would be evident from the
submissions made before us by the Learned Counsel appearing for the parties
and the documents placed before us and/or relied upon by the parties including
the applications so filed by the Birlas before the Court, it is submitted by Mr.
Mitra that such valuation is being given only for the purpose of the Court Fees
which has to be paid in respect of the application so filed by RSL for grant of
probate and nothing else. Therefore, the purpose of giving such valuation is
The further allegations have been made on behalf of the respondents that
RSL took steps to rectify the respective share registers of the respective
Companies mutating his name in place and stead of PDB as such Executor.
Further emphasis has been made on the enormity of the Estate left behind by the
said deceased and it would not be safe at all to keep all the properties in his
hands, before grant of probate of the said Will since he is not only acting as
Executor but also started acting as the sole beneficiary under the said Will.
Mr. Mitra for the appellant further pointed out that after lapse of a long
time, the respondents through KNT (Kashi Nath Tapuriah) filed the application
further pointed out that all the allegations which have been made are dealt with
properly in the application filed by RSL for dismissal of the said application for
It has been further pointed out by Mr. Mitra that the Birlas chosen to
abandon the points taken on the pleadings before the Hon'ble First Court which
are also noted by us. Hence, after analysing and scrutinising the facts stated in
the judgment passed by the Hon'ble First Court and the materials on record
placed before us and going through the decisions cited before us, we are of the
considered opinion that the respondents herein have not been able to make out a
In the decision reported in AIR 1933 Bom 342 (supra) at page 346 the
Court held that their appointment itself shows that the testator had confidence in
them, and the Court gives effect to the expression of the confidence reposed in
parties by one who knew them best. It has also been held that the Court refuses
Will as executor whose appointment is not questioned and who can discharge the
We also cannot brush aside the opinion expressed by His Lordship when
His Lordship has specifically came to the conclusion that “it is true at the present
meeting the costs and expenses to contest the good number of litigations. It has
to be taken into account that such question not even pleaded or urged before the
Therefore, with utmost respect to His Lordship, we hold that His Lordship
came to the conclusion without any pleadings and documents. Therefore, in our
and has to be set aside and hence, cannot be created as a ground for
the accused persons and he challenged the said criminal proceeding at the initial
stage fought right upto the Hon'ble Supreme Court. Mr. Mitra has specifically
pointed out that the application which has been filed before the Hon'ble Supreme
It further appears that His Lordship held that RSL is facing trials and
proceedings which were initiated for search and seizure in connection with these
proceedings, therefore, it is difficult for the Court to allow such person to control
and manage huge and vast Estate of the deceased. When he is facing criminal
breach of trust, not qua-executor, whereas it has been pointed out before us by
Mr. Mitra which we have to take note of that the criminal case referred to in the
Petition (paragraph 44 appearing at page 130 vol. I of the Paper Book) have
not been stated as a ground for appointment of Administrator Pendente Lite. His
Lordship came to the conclusion that a tainted person should not be allowed to
Mr. Mitra alongwith Mr. Mukherjee and others further pointed out that the
said criminal case was filed at the instance of the Birlas and the charges have not
yet been framed and the State has not filed any criminal case against the
appellant and the said criminal case has been filed at the instance of Birlas. The
said ground has not been taken by the Respondent as a ground for appointment
at the behest of BKB. So far as the criminal proceedings in Alipore Courts are
Birla Group of Companies. None of these proceedings even started suo motu
either by the Institute or by the State which are all private complaints. Hence,
facts of this case. RSL cannot be treated as a tainted person. Accordingly, after
assessing these facts and circumstances of the case and perusing the materials
on record placed before us, we are of the considered opinion that the Hon'ble
Hence, with respect to His Lordship, we hold that such finding of His
Lordship is contrary to law since the proceedings have not yet been over, nor
decided by any competent Court of law and, therefore, at this stage such opinion
by the Probate Court should not have been expressed on such materials and
accordingly we disagree with the opinion of His Lordship and cannot at this stage
declare RSL as a tainted person. Therefore, it cannot support the claim for
appointment of administrator.
His Lordship further came to the conclusion that the Will of 1999 and the
Codicil are seriously challenged inter alia on the ground of undue influences,
undue influences and the same were executed in the suspicious circumstances
and further lack of testamentary capacity of the testatrix and His Lordship
Mr. Mitra and Mr. Mukherjee alongwith others appearing for the appellant
pointed out before us that the Hon'ble First Court did not pass any order
ornaments, gold coins, shares and mutual funds held by PDB personally and
allowed the Executor to remain in control and management of the same. The
respondents argued that RSL had suppressed jewellery, ornaments, gold coins
and other valuable assets but even then no order was passed against him.
Therefore, it was the contention of Mr. Mitra and Mr. Mukherjee that the
Hon'ble First Court had confidence in RSL and after perusing the order so
passed by the Hon'ble First Court we have been able to find out that His
Lordship also came to the conclusion that there was no mismanagement of the
Estate of the deceased in the hands of RSL excepting the fact that His Lordship
appointed the Administrators over the controlling block of shares held by PDB
and further directed that the said shares should be transferred in their own
names and be rectified in respect of the share registers of the Companies for
existing Boards, His Lordship further directed that RSL shall not act as a
Chairman and Director in any of the Companies on the strength of the share
We have also considered the order so passed by His Lordship at the time of
moving the application at the ad-interim stage where His Lordship was pleased
to pass injunction orders to protect and preserve the assets of the deceased in
the hands of RSL. In our considered opinion, the powers as has been given to
the Administrators to record their name in respect of the shares left by deceased
in their own name and after rectifying the share Registers, all the voting rights
have been given to them and further by virtue of the said order it has been
It further appears that an Officer of Court who has been appointed over the
shares whether can have any voting right in the present circumstances and that
and other Companies within the said Group. All these four manufacturing
Companies are listed Companies and the shares are held by the Members of
public and none of the Companies are before the probate Court or parties to the
It is also a fact that no notice of this application was given to the public
Therefore, we cannot have any doubt in our mind that without giving such
notice to the shareholders in the probate proceedings, the Court has no power to
appoint Administrator Pendente Lite over the said block of shares and after
perusing the materials on record, we have not been able to find out any
document which would suggest or can act in favour of such appointment on the
controlling block of shares. Merely for the purpose of taking over the possession
and control over the Companies the Probate Court, cannot appoint Administrator
stage was enough to preserve the Estate. The Court can also direct the
appellant, RSL to furnish the accounts in respect of the dividends received on
such shares to the parties and furthermore, injunction can also be passed by the
Court directing RSL to open an account of dividends and to keep the dividend
intact except for the purpose of maintenance of the assets of the deceased and
We have also considered the materials which were placed before us by the
parties and from the pleadings, we have also been able to find out that the
respondent did not make out such case before the Court with regard to the
dividends so received from the said shares. We have also perused the order so
passed by the Hon'ble First Court and after scrutinizing the said
judgment/order, it appears to us that the implication of taking over all the voting
rights and right of control of the said thirty eight Companies mentioned in
Annexure ‘J’ is nothing but to take over control of the Companies, in other
Hence, with utmost respect to His Lordship, we hold that the effect of the
provisions of the Companies Act and, therefore, in our opinion, the said order is
Mr. Pal appearing on behalf of one of the respondents submitted that the
Appeal Court may ignore the directions given by His Lordship to that effect. We
have also been able to find out that the methods for rectification of share
provisions of the Companies Act, 1956 and further to dissolve the Board of
Companies Act which has been laid down in Sections 397, 398 and 402 of the
After considering and scrutinizing the facts and the materials on record, we
hold that the order so passed by the Hon'ble First Court by appointing such
Directors superceding the Board of Directors are not in accordance with law.
Administrator Pendente Lite over the controlling block of shares of the said
Companies of M. P. Birla Group and also the directions as given by His Lordship.
It is true that under Section 247 of the Indian Succession Act, no specific
guidelines have been mentioned in the said Section and Courts, from time to
time, have laid down the guidelines through Judgments. Such principles of law
as has been stated before us cannot be disputed since we feel that it is settled
Receiver and after perusing and analysing the cases cited before us by the
Learned Counsel for the parties, we must come to the conclusion that the matter
of appointment of administrator pendente lite under Section 247 of the said Act,
the main criteria is nothing but necessity, necessity to preserve the Estate of the
deceased.
It is an admitted fact that if all grounds go, even then if the Court finds that
necessary, then the Court would have power to appoint an Administrator and, in
analysing the decisions cited before us and relevant provisions of the said Act
and the facts and circumstances of the present case we hold that there is no
In the instant case, after examining the materials on record placed before
us, we have not been able to find out that a case of necessity has been made out
by the petitioners. We have considered the decision of AIR 1956 Madras 409
(supra) and AIR 1995 KANT 258 (supra) wherefrom we found that there is no
authority for the proposition that the Estate of the large part of the movable
property, cash, jewellery etc. and the person in possession is a limited owner, a
The question that the conduct of the limited owner has been such that has
the Court must satisfy that the appointment is necessary and proper. The
contested.
such case has been clearly made out in the petition. The Executor will not be
displaced upon slight grounds and a strong case must be made out to warrant
the appointment of a Receiver where the Executor is willing to act, where the
circumstances exist and justify the appointment only, where the abuse of trust is
and then and then only relief can be granted. An Administrator Pendente Lite
pending. The applicant is required to show the same necessity for the grant that
is necessary for the preservation of the Estate for receiving rents, payment of
interest or the dividends of shares as they become due and that no fit and proper
materials to be placed before the Court which can be treated as a tools in the
hands of Court fulfilling the test of the necessity and then and then only the
named Executor and we have also not been able to find out reason in the
impugned judgment which can satisfy our conscience that why His Lordship was
pleased to appoint Administrator Pendente Lite over a part of the Estate that is
the controlling block of shares and allowed the Executor to manage the
remaining part of the Estate e.g. valuable movable assets, jewellery, gold coins
etc.
The Hon'ble First Court observed that the dividend income of the Estate
and mode of utilisation has not been disclosed to the Court. This fact was never
stated in the petition by the respondent, nor was even argued before us in course
which was given to the appellant and, therefore, we cannot treat it as a ground
Lite. The other grounds which have been stated by the Hon'ble Judge, have not
been taken in the pleadings or argument ever put forward on behalf of the
Executor, unless he relinquishes his right to such an Executor, his duty and
obligation remains as Executor to take all necessary steps and we find from the
facts that RSL took the control over the shares and transmissions of the said
necessity nor the Executor can be declared as unfit or that there can be an
We also find from the impugned judgment that His Lordship relied upon
certain facts which according to His Lordship are admitted, but as we have
found out from the records that cannot be treated as admitted facts.
We further want to point out that His Lordship although questioned that
wherefrom RSL is meeting the costs and expenses contesting the good number of
litigations, Mr. Mitra and Mr. Mukherjee pointed out that not a single penny has
been spent by RSL from the Estate for litigation expenses and, furthermore,
there is no pleadings made out by the respondents before the Learned Trial
Court.
Therefore, we have to come to the conclusion that the grounds which have
We have also considered the nature of the Estate, mostly are the controlling
block of shares held by PDB at the time of her death which has also been
share of PDB by the respondents nor any allegation have been made that RSL
took the possession of the said shares and there is no allegation that he has
We have also been able to find out from the facts and the materials on
record placed before us that the Birlas by virtue of their majority share holding
in two Companies of the M. P. Birla Group namely, Rameshwara Jute Mills Ltd.
and Jute Investment Co. had taken over the control of the said Company in
September, 2005 and further Indian Smelting & Refining Co. Ltd. also has been
Hence, the respondents have failed to make out a case for appointment of
Administrator Pendente Lite when no mismanagement has been found out by the
Hon'ble First Court and the business of the M. P. Birla Group of Companies as
specifically held by His Lordship are not in “serious jeopardy” in the hands of
RSL. We do not find that the respondents have been able to make out a case
thereof.
After scrutinizing the facts and circumstances of the case and analysing
the decisions cited before us and perusing the materials on record, we have to
come to the conclusion that the vastness of the Estate is nothing but the
facts and circumstances of the case, it does not call for an appointment of
the decision reported in AIR 1987 Cal 194 (State Bank of India vs.
“…… It has also been shown that the petition does not disclose
any material to show that the securities are in imminent danger of
being wasted or disposed of or are likely to be attached before
judgment at the instance of any other third party creditor or the
company is likely to be would up. If there is any apprehension of such
threat to the securities, the plaintiff can get the relief by way of
injunction but the appointment of Receiver whose main function will be
to take possession of the securities, is likely to stop the running of the
business of the defendant No. 1 company, which may not be at all just
and convenient in the present facts and circumstances when the
defendant No. 1 is still running the business. It cannot be expected that
the learned Advocate who has already been appointed the Receiver by
the Court’s order dated 4.8.86, will have the expertise to run the
business of the type which is being run by the defendant No. 1 with its
experience and expertise. The appointment of any other person as the
Receiver who has not the requisite expertise will only lead the business
to close down to the detriment of the interest of not only the creditors
like the plaintiff but also of so many employees……”
On the question of unnatural Will, we have scrutinised the materials placed
before us by the Learned Advocates for the parties and we cannot brush aside
the fact that the relationship of PDB with other Members of the Birla family
including her brother KNT cannot be said to be harmonious and we do not want
to make any further observation at this stage in this appeal and we restrain
ourselves from making any comment thereon but we must place it on record
that we have considered the documents and/or the materials being a letter dated
19th September, 1985 by Ashoke Birla (appearing at page 684 of vol. 3 of the
paper book); letter of YB dated 8th April, 1988 (appearing at page 1962 of vol. 6 of
the paper book); handwritten notes of PDB (appearing at page 679 of vol. 3 of the
paper book); letter of KNT dated 18th January, 1996 and 19th December, 1998
(appearing at pages 699 and 717 of vol. 3 of the paper book); the removal of KNT
from the Trust/Societies and the particulars for which has also been adverted to
by Mr. Mitra and Mr. Mukherjee, appearing at page 696 of Vol. 3 of the Paper
Book.
The Hon'ble First Court also has come to conclusion that the Estate is “in
medio”, but we find that no such pleading made out in the petition and, in our
considered opinion, the Court cannot travel beyond the pleadings which has
been specifically stated by the Apex Court and the Court cannot make out a
third case which has not been made out by the parties.
Therefore, on that question also, after considering the facts and
circumstances of the case and the materials on record placed before us, we have
to come to the conclusion, with utmost respect to His Lordship, that His
Lordship has mis-appreciated the fact and held that the Estate is “in medio”.
The further question that whether the Court has jurisdiction to apply
here that the Court will apply its discretion providing that the case is being made
out by the parties calling for such discretion in a case where the case of
necessity for appointment of Administrator Pendente Lite has been made out.
Hence, we are unable to find out such situation in this matter and unable
to uphold the decision of His Lordship and according to us, the Court has not
appreciated the facts of the case properly and has not exercised its discretion
with and not to transfer any of the assets and properties of the Estate of PDB, in
any manner whatsoever, and further, in our opinion, the order so passed by the
Hon'ble First Court at the ad-interim stage is enough to preserve the Estate of
PDB. We direct the Executor, RSL to give a details of the dividends so collected
in respect of the shares of PDB and the accounts, therefor, to be furnished to the
received on the shares of PDB and to retain the same in a separate account and
no amount to be spent out of the said fund by RSL excepting for preservation of
the Estate.
In the cross-appeals, we do not find that a case has been made out by Mr.
S. B. Mookherjee’s client nor we have been able to find out that there is any
For the reasons stated hereinabove, both the appeals and the cross-
I agree.