Lodha: Happy

Calcutta, Oct. 11: Rajendra Singh Lodha today scored a resounding victory in the protracted legal battle for the control of the MP Birla empire.

A division bench of Calcutta High Court set aside the order of the trial court directing the appointment of four administrators. The court, however, introduced several checks and balances.

Lodha counsel Debanjan Mandal termed the judgment a “dramatic victory”, while the Birlas withdrew into a shell, cancelling a press conference — scheduled to discuss the verdict — called only two hours before the judgment was to be read out in the afternoon.

“No one will talk. It was a bad day for us,” a Birla confidant said in the evening.

The Birlas, who are certain to move the Supreme Court challenging the high court order, found some comfort in the fact that Lodha would now have to share with them dealings of the companies and estates of MP Birla Group and Priyamvada Birla, respectively.

“The accounts will be under our scrutiny and can be audited,” he added.

While setting aside the order of trial court judge K.J. Sengupta, a division bench comprising Justice P. C. Ghose and Justice T. K. Dutt directed Lodha not to sell any part of the estate or spend any amount from its income except for its maintenance.

Disposing of the appeal filed by Lodha against Justice Sengupta’s order of May 19, 2006, the division bench directed that Lodha would have to maintain separate accounts for the business earnings and dealings of the estate.

The estate has been the focus of a bitter legal battle between the Birlas and Lodha since June 2004 following the death of Priyamvada, MP Birla’s widow.

“My client had given a written undertaking to the court that he would not deal with the assets belonging to the estate of Late Priyamvada Birla,” Mandal said.

The Birlas were keen to instal an administrator for the MP Birla empire who would be able to clamp restrictions on Lodha, who is the chairman of a number of group companies, including flagship Birla Corporation.

They hoped that an administrator could also limit Lodha’s ability to fight a long and expensive legal battle.

In a parallel development, the Supreme Court today reserved judgment in the cross appeals filed by the Birlas and Lodha challenging each other’s right to object to Priyamvada’s purported will of 1999 and late M P Birla's will of 1982 respectively.