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Birlas kept MPB in dark: Lodha counsel

December 24, 2004 11:19 IST

The note of discord in the Birla family has resurfaced with the Birla will case. The latest piece of evidence is a handwritten note by Priyamvada Birla, detailing the unfair treatment towards late M P Birla.

The three-page note records that M P Birla was often kept in dark about corporate decisions in the group and was not even consulted in the reconstitution of board of Pilani Investment, the crown jewel, which has a holding in key Birla group companies.

Birla vs Lodha: War over a will

The letter states, M P Birla, of his own accord, handed over the management of Digjam to S K Birla. "Since he thought it proper in view of the fact that S K B has worked with him for about 20 years. But he felt hurt as the gesture was not appreciated by S K B (in fact this was the first unit which was given by any family member to S K B)."

Counsel for Lodha on Thursday mentioned the note in court, which is part of their petition. Subsequently, other companies were amalgamated with Digjam by issue of rights shares, M P Birla was not informed "even by way of mere courtesy".

The note also reveals a strain in the relationship with B K Birla as it mentions, "M P Birla donated 6 per cent shares of J C M (Jiyaji Cotton Mills) to B E T (Birla Education Trust) against which uncle G D B (G D Birla) had instructed him to transfer the 2.13 per cent shares of B J M held by B E T to M P B's Trust."

However, after the demise of G D Birla, M P Birla did not think it proper to raise the subject since he had a feeling that B K Birla did not approve of it.

The note also cited another instance, where M P Birla resigned from the board of J C M. M P Birla was the chairman of J C M with 25 per cent holding but, after the death of G D Birla, he resigned from the board as B K Birla said this was what uncle had desired. "M P B accepted the words of B K B without any question," said the note.

The note also refers to Ashok Birla, father of Yash Birla and one of the caveators in the Birla-Lodha case. "Ashok Birla was given shares of Asian Distributors, Birla Bros, Birla Bombay, Godavari Laxmi Properties etc by M P B of his own will, was the gesture appreciated?" posed Priyamvada Birla in the note.

Criminal case hearing on Jan 11: The Calcutta high court has fixed the hearing of the criminal proceeding relating to Priyamvada Birla will case on January 11, 2005.

Justice P N Sinha, who was assigned to hear the case, observed in his order that, as the High Court is in the midst of hearing the case, the advocate for complainant shall not take step on January 7, 2005 before the Chief Judicial Magistrate, Alipore relating to the case.

The judge further observed that CJM shall not take up the case on that day as the high court will hear the case on a January 11. However, the judge did not pass any order regarding the extension of stay.

Meanwhile, in the court of Justice K J Sengupta, opposing the petition filed by Lakshmi Newar seeking appointment of administrator over the estate of late Priamvada Birla, Shaktinath Mukherjee appeared for R S Lodha and argued that the Birlas never raised any objection about the functioning of Lodha in the Birla company.

He also said no objection was raised by any Birla when R S Lodha's son Harsh Vardhan Lodha was inducted as a director. Before the death of Priamvada Birla, Lodha was a friend of Birla family but after her death, he became an enemy, Mukherjee added.

Another counsel for Lodha, who opposed the petition of Radha Mohta for appointment of administrator argued that the Birlas are asking for injunction against those companies which are not made parties to the proceeding so the prayer of injunction is not sustainable in law.

The hearing will resume on January 6, 2005.
Ishita Ayan Dutt & Subroto Chattoraj in Kolkata