The Calcutta high court on Wednesday rejected an appeal seeking a probe into the late Priyamvada Birla's shareholding in Birla Corporation Ltd, the flagship company of the MP Birla group.
Justice Indira Banerjee on Wednesday dismissed the appeal, which challenged the order of the Company Law Board in relation to the probe.
The CLB had dismissed a petition filed by three shareholders seeking an investigation to find out who was controlling Birla Corporation.
The appeal was filed by the same shareholders in the high court, under Section 10F of the Companies Act, 1956, on the ground that the April 25 order of the CLB was a misuse of the provision of the Act.
Justice Banerjee, while upholding the order of the CLB, held, "As the CLB has already observed that Rajendra Singh Lodha is controlling the shares of the late Priyamvada Birla in the company, no further investigation is necessary and the High Court has no ground to interfere with the CLB's order."
PC Sen, Anindya Mitra and Jayanta Mittra, counsel for Birla Corporation, opposed the appeal and stated that the CLB, in its order, observed that the result of the annual general meeting of Birla Corporation had proved that Lodha was the person controlling the affairs of the company.
In its order, the CLB clearly held that as the company was being managed by Lodha, there was no need for any investigation into the matter, the Birla Corporation counsel added.
Describing the application as mala fide, the counsel alleged that the petition was filed at the instance of Birlas to harass Lodha with another legal case.
The judge, however, rejected the argument of the Birla Corporation counsel that the shareholders, who had filed the appeal in the High Court and the petition with the CLB, were set up by the Birla group.
The court observed that "this argument is not necessary in adjudicating the issue of investigation".
One GS Kayan and two others had moved the CLB. The Birla Corporation also filed a petition with the CLB for dismissing the shareholders' application. The petition is pending before the CLB.
Describing the application as a mala fide one, the Birla Corp counsel alleged that the petition was filed at the instance of Birlas to harrass Lodha with another legal case.
The Judge, however, rejected the argument of Birla Corporation counsel that the shareholders who filed the appeal in the High Court and petition in the CLB were set up by the Birla group.
The court observed that 'this argument is not necessary in adjudicating the issue of investigation'.
In the CLB, G S Kayan and two others filed the petition and the Birla Corporation also filed a petition for dismissing the shareholders application. The petition was pending before CLB.
