Calcutta HC Dismisses Contempt Petitions Against Harsh Vardhan Lodha

A Division Bench of the Calcutta High Court on Thursday dismissed contempt petitions filed against Harsh Vardhan Lodha for continuing as director and chairman in Birla Corporation Ltd, Universal Cables Ltd, Vindhya Telelinks Ltd, and Birla Cable Ltd.

According to the Lodhas, the “landmark judgment” clears the decks for Harsh Lodha to continue as chairman of all companies of the MP Birla Group.

Commenting, the Birla side said: “We are awaiting the copy of the order passed today (Thursday) and would decide the course of action after studying it.”

Lodha’s advocate Debanjan Mandal, partner, Fox & Mandal, said in the past two years, relentless attacks had been mounted, not only on Lodha, but also on independent directors and executives of the MP Birla Group companies.

“Thursday’s verdict vindicates the highest level of governance standards maintained in these companies from the times of the late Madhav Prasad Birla,” he added.

The contempt application was filed by the Birla side on grounds of violating a Division Bench order dated October 1, 2020.

The sequence of events is somewhat like this: On September 18, 2020, a single-Bench of the Calcutta High Court ordered that Harsh Vardhan Lodha be restrained from holding office in any of the MP Birla group entities during the pendency of the suit involving the contested will of Priyamvada Birla.

The order was challenged by the Lodhas before the Division Bench, which declined an ad interim stay on the single-bench order and said the restriction on Lodha was “on the strength of shares referable to the estate of Priyamvada Birla”.

However, the order was interpreted by the Birlas and Lodhas differently.

According to the Lodhas, it paved the way for Lodha to continue to hold offices in all the companies because he was reappointed on the strength of shares of third-party promoter group entities, financial institutions, and individual shareholders.

Lodha continued to act as director of these companies and chaired board meetings of Birla Corporation and the listed cable companies —Universal Cables, Vindhya Telelinks, and Birla Cable. That led to the contempt application from the Birla side.

The contempt petitions were heard in March-April 2021 by the Division Bench. The Lodha side said Thursday’s judgment, as read in court, held that the court had found no acts of contempt by Lodha and hence the case against him was dismissed.

The Lodhas said the court found under the circumstances, there was no case against the directors having “aided and abetted him” and the cases against them were also dismissed.

The latest dispute has its origins in decisions (by a majority) made by the court-appointed committee – the Administrators Pendente Lite (APL) to administer the estate of Priyamvada Birla – to not support resolutions pertaining to the reappointment of Harsh Lodha as chairman of M P Birla group companies.

The same was to get the decisions implemented that the Birla side had moved the high court.

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