Justice BV Nagarathna recuses from hearing plea against Harsh Vardhan Lodha continuing as MP Birla Group Chairman

Justice BV Nagarathna of the Supreme Court on Thursday recused from hearing the case concerning Harsh Vardhan Lodha being allowed to continue being at the helm of the MP Birla Group. (Arvind Kumar Newar v. Harsh Vardhan Lodha and ors).A Bench of Justices BV Nagarathna and Augustine George Masih was scheduled to hear the matter today, when the former recused.A bevy of Senior Advocates including Harish Salve, Darius Khambatta, S Muralidhar, Dr Abhishek Manu Singhvi, Shyam Divan and Puneet Bali politely remarked that the recusal was disappointing..In a breather for Harsh Vardhan Lodha, the Calcutta High Court had on December 14 allowed him to continue as Chairman of the MP Birla group of companies, and restricted the 'administrators pendente lite' (APL) from interfering with the day-to-day operations of the group.This led to the instant appeal before the apex court, filed through Khaitan & Co and Aggarwal Law Associates. Harsh Vardhan Lodha was represented by Fox & Mandal led by Debanjan Mandal and Kunal Vajani. MP Birla Group Companies was represented by Ranjeeta Rohatgi.The High Court's decision came on a clutch of appeals filed by Lodha and four companies of the Birla Group challenging the September 18, 2020 order of a single-judge who had restrained Lodha from holding the post of Chairman.The September 2020 order was passed after a few members of the 'extended' Birla family questioned the validity of the will of Priyamvada Devi Birla, wife of MP Birla..By way of background, Priyamvada Devi Birla was the Chairperson of the group till her death on July 3, 2004. By virtue of a will prepared in April 1994, she had bequeathed her nearly ₹25,000 crore estate to her advisor and former chartered accountant, RS Lodha.Subsequently, RS Lodha held the Chairman's position. However, the 'extended' Birla family members challenged the same, and three administrators were, therefore, appointed to oversee Priyamvada's estate.After RS Lodha's death in 2008, his second son Harsh Vardhan Lodha took over as the Chairman, but he was restrained by the September 2020 Calcutta High Court order. He, however, continued as the Director of some of the companies..In December 2023, the High Court 'modified' the September 2020 judgment. It ruled that the APL cannot jump steps to directly take (decisions) or pre-empt business decisions in respect of the entities not under their direct control.The Division Bench had, however, clarified that as and when any major decision is required to be taken regarding transactions/transfers of the shares themselves, the APL mandatorily has to approach the testamentary court for necessary orders.While referring to the 'influence' of Priyamvada over the entire group of companies, it had said that her powers were restricted to her ownership of the particular shares in different companies. It had added that the APL must not confuse the expression ‘controlling interest’ with ‘personal influence’ of Priyamvada.Therefore, the 'controlling interest' (of the APL) would only mean the 'heritable incidental rights' such as voting rights, rights to participate in shareholders' meetings etc.As regards the contention of the APL passing 'drastic orders' compelling or pressuring the companies of the group to implement the same, the Court emphasised that the APL is not an adjudicating authority.The High Court had made it clear that the origin of the dispute is the will in question, which has been long pending and must be expeditiously decided.