A Division Bench of the Calcutta High Court has quashed restrictions imposed by a Single Bench in August 2019 on publication of results of various resolutions put to vote at the Annual General Meetings (AGMs) of three Birla Group companies. The resolutions of three companies — Birla Cable, Vindhya Telelinks and Birla Corporation Limited — included reappointment of director, payment of dividend to shareholders and resolution for payment of profit-based remuneration to the non-executive chairman, a release from the group said.
The August 2019 Single Bench order imposed a stay on publication of the results on voting of the AGM resolution of the companies. In the case of Birla Corporation Limited, the resolutions included reappointment of director, payment of dividend to shareholders, and resolution for payment of profit-based remuneration to the non-executive chairman.
‘Violated natural justice’
The Birla Group companies appealed before the Division Bench in November last year, arguing that the orders were in violation of natural justice and fair play, violating provisions of the Companies Act.
In Monday’s judgment, Justice Sambuddha Chakrabarti and Justice Arindam Mukherjee of the Division Bench set aside the orders passed by the Single Bench.
The Division Bench observed that the August 2019 order was not sustainable in view of the fact that the orders or directions were passed interfering with the holding of AGM by the companies, which are separate juristic entities, without first deciding the issue of jurisdiction. The results of voting at the AGMs of Vindhya Telelinks and Birla Cable, which could be published earlier, show that Harsh Vardhan Lodha, chairman, was reappointed as director of the two companies with more than 99% of votes cast in his favour. Mr. Lodha has also been a Director of Birla Corporation Limited since 1996, the release noted.
Debanjan Mandal, partner of Fox & Mandal, the solicitor firm representing Mr. Lodha said, the judgment is “a vindication of our client’s stand that third party companies are not party to the probate suit. It’s a victory for corporate democracy as the results of the polls taken at the AGMs clearly show what 99% of shareholders want.”
