Supreme Court rules in favour of HV Lodha, allegations of contempt of court dismissed twice in seven months

The Supreme Court has, for the second time in less than seven months, dismissed petitions alleging that Mr Harsh Vardhan Lodha had failed to comply with a Calcutta High Court verdict by continuing as the Chairman of the MP Birla Group Companies.

The apex court had, on 12 July 2021, passed an order on a petition filed by the Birlas, upholding an earlier ruling of Calcutta High Court that Mr Lodha could continue as the Chairman and Director of the MP Birla Group Companies even in the wake of a judgment passed by Hon’ble Justice Sahidullah Munshi (now retired) on 18 September 2020.

Despite the charges of contempt of court being demolished in the highest court in July last year, two members of the APL Committee—Hon’ble Justice Mohit S. Shah (retired) and Mr A.C. Chakrabortti—strangely filed another petition in the Supreme Court in November last year with the same allegations, without taking leave of Calcutta High Court. The second attempt to dislodge Mr Lodha was again nipped in the bud.

On Friday, 4 February, Hon’ble Justice D.Y. Chandrachud and Hon’ble Justice Surya Kant said they were not inclined to entertain the special leave petition filed by two of the three members of the APL Committee (court-appointed custodians of the late Priyamvada Birla’s estate) in view of the instructions passed by the Supreme Court in its order of 12 July 2021.

In that order, Hon’ble Justice Chandrachud and Hon’ble Justice Hrishikesh Roy had asked Calcutta High Court to expeditiously dispose of all outstanding appeals and cross-appeals that arose from the verdict of Hon’ble Justice Munshi, who had ordered Mr Lodha to step down as Director from all MP Birla Group Companies even as he maintained that his court didn’t have jurisdiction over these corporate entities.

Quotable: “The dismissal of the second special leave petition filed with the same allegations as the previous one clearly reveals the hollowness of the claims made in these petitions,” said Mr Lodha’s lawyer, Mr Debanjan Mandal, Partner, Fox & Mandal. “Hon’ble Justice Munshi’s judgment has been challenged. After this second verdict in less than seven months, we are confident that attempts to remove our client from various entities of the MP Birla Group will not succeed,” added Mr Mandal.

Background: Mr Lodha challenged the controversial verdict of 18 September 2020 in the Division Bench of Calcutta High Court. On 1 October 2020, Hon’ble Chief Justice T.B. Nair Radhakrishnan (now retired) and Hon’ble Justice Shampa Sarkar clarified, in an interim order, that Mr Lodha could continue as the Chairman and Director of the MP Birla Group Companies except on the strength of the late Priyamvada Birla’s estate.

With this clarification coming through, Mr Lodha continued as the Chairman of the MP Birla Group Companies. However, a raft of contempt petitions was filed by the Birlas in Calcutta High Court, which was dismissed by the Division Bench of Hon’ble Justice Radhakrishnan and Hon’ble Justice Sarkar in April last year.

A proxy for the Birlas moved the Supreme Court challenging the decision of the Division Bench of Calcutta High Court, and even after that petition was dismissed in July, two members of the APL Committee filed another petition in November with the same allegations. On Friday, 4 February, the Supreme Court reiterated that it wasn’t willing to entertain such petitions.

Despite pressure to step down, Mr Lodha has chaired all Board meetings of the MP Birla Group Companies and was reappointed Director of Birla Cable Limited in September last year, with an overwhelming majority of 83% votes cast in his favour. In elections held earlier at annual general meetings of other companies, he has been re-elected as Director with at least 98% votes cast in his favour.