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TMI Blog2024 (12) TMI 887X X X X Extracts X X X X X X X X Extracts X X X X ..... all the property of the deceased person in the Executor or Administrator, as the case may be. Since the APL Committee has been appointed by order of the Testamentary Court in respect of the estate of late PDB, Section 211 vests the property of the estate in the said APL. Also, as per Section 211(1) of the 1925 Act, it is the APL which is the legal representative of the estate for all purposes. Thus, the plaintiffs, in the capacity of universal legatees of the estate, cannot jump the queue bypassing the APL and directly assert their rights in respect of the estate. Section 332 of the 1925 Act provides that the assent of the executor or administrator is necessary to complete a legatee‟s title to his legacy. Thus, although the rights of legatees relate back to the date of death of the testator, such right/title is conferred only upon probate/Letters of Administration being granted and assent to the legacybeing completed by distribution of the property by the Executor or Administrator as the case may be - Hence, it is premature for the universal legatees to assert their rights by bypassing the total control of the APL over the estate through the testamentary court. Jurisdiction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... banjan Mandal, Adv., Mr. Jishnu Chowdhury, Adv., Mr. Sanjiv Kr. Trivedi, Adv., Mr. Soumya Ray Chowdhury, Adv., Mr. Subhankar Nag, Adv., Mr. Sarvapriya Mukherjee, Adv., Mr. Satadeep Bhattacharyya, Adv., Ms. Iram Hassan, Adv., Mr. Sanket Sarawgi, Adv., Mr. Rachit Lakhmani, Adv For the Respondent no.7 : Mr. Abhratosh Majumdar, Sr. Adv., Mr. Rajesh Upadhyay, Adv. For the respondent no.9 : Mr. Krishna Raj Thaker, Adv. Ms. Akansha Chopra, Adv. Mr. Saptarshi Kar, Adv. For the Respondent nos.8 and 10 : Mr. Ratnanko Banerji, Sr. Adv. Mr. D.N. Sharma, Adv. Ms. Pritha Basu, Adv. Mr. Rajarshi Dutta, Adv. For the Respondent no.11 and 12 : Mr. Anirban Ray, Adv. Mr. Sankarsan Sarkar, Adv. Mr. D. Chakraborty, Adv For the Respondent no. 14 : Mr. Ranjan Bachawat, Sr. Adv. Mr. Sayan Roy Chowdhury, Adv. Mr. Satyaki Mukherjee, Adv. Mr. B. Garodia, Adv. Mr. Paritosh Sinha, Adv. Mr. Sanbhik Chaudhury, Adv. ORDER Sabyasachi Bhattacharyya, J.:- 1. The present appeal arises out of an order refusing the prayer of the plaintiffs/appellants for interim injunction. The impugned order was passed in connection with a suit instituted by the plaintiffs/appellants seeking declaration that the decision taken by the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mited (BCL), the owner of the fourth floor and the present landlord of the Companies, have offered to grant tenancy in respect of an extended portion on the fourth floor itself, which would cover the need for additional space, if any, at almost half the rate at which the Companies are going to take rent on the seventh floor. Hence, the decision is not commercially viable as well. 7. Learned senior counsel contends that the APL Committee formed by the Testamentary Court is comprised of three members, one of whom is a judicial member. The majority members prevailed over the BoD of the companies, being themselves Nominee-Directors in the said Boards. Upon a written communication of the minority member, who oppose such decision of the Board, which is also annexed to the pleadings of the plaintiffs, the plaintiffs became aware of the situation and filed the present suit. 8. Learned senior counsel seeks to take the court through the respective shareholdings of the estate of late PDB in the five companies to impress upon the Court that the estate has direct and legal control over the companies. Hence, the present decision would be detrimental to the interest of the estate, which confers l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... state. 15. It is contended that the Division Bench clearly mentioned in its judgment that the majority decision of the APL would prevail, the third (judicial) member of the APL being the arbiter having veto power in case of differences of opinion between the APL members. Thus, the plaintiffs cannot challenge the decision of the majority APL members and bypass the APL to seek relief in respect of the estate. 16. It is further pointed out that Section 104 of the Indian Succession Act, 1925 (for short, the 1925 Act ) does not confer any right in praesenti on the universal legatees. Rather, Section 211 of the 1925 Act, vests the property of the estate on the Executor or Administrator, as the case may be. 17. It is argued that no civil right of the plaintiffs has been infringed and the Civil Court cannot interdict any internal affair of the defendant- Companies, who are independent juristic entities in their own right. It is argued that in the event there is any grievance over perceived oppression, mismanagement or control of the Company, it is for the members of the Company to move the appropriate forum under Sections 241 and 242 of the 2013 Act. The plaintiffs are strangers and not me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffice space at all. 26. It is argued that the said decision is a mere ploy to ensure that the funds of the Companies, which belong to the estate, are resourced out for the benefit of the owner of the seventh floor, which is primarily controlled by the Birla family and not the estate of late PDB. 27. Learned counsel for the respondent nos. 11 and 12, apart from adopting the arguments of respondent nos. 8, 9, and 10, contends that the estate of late PDB, represented by the APL, does not have any majority shareholding in the respondent nos. 11 and 12-Companies. As such, the said companies are not under complete control of the APL. The Board of Directors of the companies are comprised also of other members than the APL nominees and as such, acted independently to take the impugned decision. 28. If aggrieved by the action of the APL Committee, it is always open to the plaintiffs to approach the Testamentary Court. However, the Board decisions were taken fully in accordance with law. Learned counsel places reliance on Section 179 of the 2013 Act, which lays down the powers of the Board of Directors of a company. The decision impugned in the suit having been taken by the respective BoDs o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ked into for the limited and tentative purpose of ascertaining whether the party seeking injunction has a prima facie case, even at the stage of grant of interim injunction. 36. Seen in such context, we are to ascertain whether the learned Single Judge adopted the correct approach in passing the impugned order. 37. The first issue which crops up is the locus standi of the plaintiffs/appellants to initiate the suit. The issue of locus standi has two components from the perspective of the Indian Succession Act, 1925 and from the Company Law perspective. 38. Taking first things first, Section 104 of the 1925 Act provides that the legatee has a vested interest in the estate of the deceased testator from the date of death of the testator. However, the said Section is circumscribed by Section 211 of the said Act which operates to vest all the property of the deceased person in the Executor or Administrator, as the case may be. Since the APL Committee has been appointed by order of the Testamentary Court in respect of the estate of late PDB, Section 211 vests the property of the estate in the said APL. Also, as per Section 211(1) of the 1925 Act, it is the APL which is the legal represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... snominees of the APL in the Boards of the concerned five defendant-companies, took the decision impugned in the suit. Thus, the dissenting/minority APL member could not seek to achieve indirectly through the plaintiffs/universal legatees what he could not obtain directly by contravening the majority decision of the APL. Admittedly, one of the major components of the cause of action pleaded in the plaint by the plaintiffs/appellants is the instigation caused by the letter of the dissenting member of the APL with regard to difference of opinion with the decision of the majority members. The Civil Court cannot grant its blessings to such attempt on the part of the dissenting member to frustrate the majority decision of the APL. At best, if aggrieved and otherwise entitled in law, the legatees could approach the testamentary court in that regard. 43. In fact, the Division Bench judgment also stipulates that the Testamentary Court could be approached by the APLonly in case of major differences of opinion and not regular day-to-day decisions;however, whether a decision is major or not would be at the discretion of the third (judicial) member of the APL to decide. Hence, the attempt of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Companies are at the helm of their affairs. Although, incidentally, the BoDs include nominees of the APL as Directors, they have taken the impugned decision to take a tenancy on the seventh floor of the Birla Building not as an APL but as Directors of the respective Companies, in such capacity. 51. Notably, the estate of late PDB does not have direct majority shareholding in defendant nos.11 and 12-Companies which are also two of the five companies in respect of whom relief has been sought in the suit. In any event, the BoDs of the companies include other Directors than the APL nominees and, being legitimately appointed Boards, have full control over the functioning of the companies within the contemplation of Section 179 of the 2013 Act. 52. The plaintiffs, being utter strangers to the companies, cannot intermeddle, or seek directions from the court to so intermeddle at their instance, or even look into the commercial prudence of the decisions of the companies. If aggrieved in that regard, only members of the companies can sue. 53. The bogey of derivative action‟ raised by the appellants is not germane or applicable in the instant case. Such concept evolved in Company juris ..... X X X X Extracts X X X X X X X X Extracts X X X X
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