In the High Court at Calcutta

Civil Appellate Jurisdiction

ORIGINAL SIDE

The Hon’ble Justice Sabyasachi Bhattacharyya

And

The Hon’ble Justice Uday Kumar

IA GA No. 1 of 2024

APOT No. 371 of 2024

Arising out of

IA GA No. 1 of 2024

CS No.214 of 2024

Meenakshi Periwal and Ors.

Vs.

Gautam Gan and Ors.

For the appellants : Mr. Abhrajit Mitra, Sr. Adv.,

Mr. Debanjan 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.

2024:CHC-OS:260-DB

2

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.

Hearing concluded on : 13.11.2024

Judgment on : 20.11.2024

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 b y the

defendants/respondent-Company nos.8 to 12 to obtain leasehold rights

in their favour in respect of the seventh floor of the Birla Building at

9/1, R.N. Mukherjee Road, Kolkata - 700001 is illegal, null and void

and for injunction restraining the defendants from giving further effect

to the said decision as well as from removing or transferring any record

or document of the defendants nos. 8 to 12 from their existing tenanted

premise at the fourth floor of the same building as well as

consequential reliefs.

2. In the said suit, an application was filed for appointment of

Receiver/Special Officer to make an inventory of all such records found

to be in symbolic possession of the respondent nos. 8 to 12 at their 2024:CHC-OS:260-DB

3

existing tenanted premises as well as for injunction in line with the

reliefs sought in the plaint. Interim order sought therein was refused by

the impugned order, giving rise to this appeal.

3. Learned senior counsel appearing for the appellant argues that the

plaintiffs/appellants are universal legatees of the estate of Late Smt.

Priyamvada Debi Birla (PDB) and since late PDB was either a majority

shareholder or had controlling interest through her shareholding in

defendants/respondent nos. 8 to 12-Companies, the plaintiffs have a

stake in the said companies.

4. A Letter of Administration proceeding is at present pending before the

Testamentary Court and in a recent order of the Division Bench of this

Court, it was held that the estate and, through it, be Administrator

Pendente lite (APL) exerts influence over the estate, including the

Companies. It is argued that by virtue of the impugned decision taken

by the Board of Directors (BoD) of the said Companies, the funds of the

Companies would be considerably depleted.

5. Learned senior counsel argues that the defendant nos.8 to 12

companies are primarily investment companies and deal with financial

affairs and as such, do not have requirement of greater office space

than they already have at their existing tenancy at the fourth floor of

the Birla Building. By virtue of the impugned decision, the companies

are about to obtain a lease in respect of the seventh floor for about one

hundred times the rent of their existing tenanted premises which would

regularly siphon off a massive chunk of the funds of the companies

unnecessarily. 2024:CHC-OS:260-DB

4

6. It is argued that during pendency of the present suit, Birla Corporation

Limited (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 locus standi on the plaintiffs, as

universal legatees of the estate, to initiate the present legal action.

9. As per the observation of the Division Bench referred to above, the

Testamentary Court cannot grant injunctions in respect of thirdparties,

including the defendant nos. 8 to 12 companies. As such, the plaintiffs

have approached the regular civil court for the present reliefs. 2024:CHC-OS:260-DB

5

10. It is contended by the plaintiffs/appellants that the reliefs of

declaration and other consequential reliefs sought in the suit cannot be

granted by the National Company Law Tribunal (NCLT) as those do not

come within the purview of the Companies Act, 2013 (hereinaf ter

referred to as “the 2013 Act”). As such, neither the Testamentary Court

nor the NCLT can grant the reliefs sought here, thus justifying the

filling of the suit.

11. It is argued that the BCL is fully controlled by the estate of Late PDB

through her shareholding and, as such, the tenancy under BCL would

enureto the benefit of the estate‟s interest, as there can be mutual

reciprocity between the tenant companies and the landlord/BCL even

in respect of the rent payable. Hence, it is argued that going to a third-

party company, which owns the seventh floor, seeking a fresh tenancy

would cause attrition on the funds of the Companies, thereby depleting

the estate. Also, the removal of records to the prospective new tenanted

premises on the seventh floor of the Bi rla Building would be

detrimental to the estate‟s interest, since the owner of the seventh floor

is a company not under the direct control of the estate of late PDB.

12. Apart from the intended transaction not being commercially viable, it is

hinted by the appellants that the control asserted by the estate of late

PDB over BCL, the landlord, which in turn confers bargaining power on

the tenant companies, also controlled by the estate, would be lost.

13. Learned senior counsel appearing for the respondent nos. 8 and 10,

two of the defendant-Companies, argues that if the plaintiffs have a

grievance with the functioning of the APL, the appropriate remedy

would be to approach the Testamentary Court and not filing a civil suit. 2024:CHC-OS:260-DB

6

14. It is argued that in view of the APL being in charge of the estate of Late

PDB in terms of the orders of the testamentary court, the universal

legatees do not have any locus standi to initiate a legal action in respect

of the estate.

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 o ver perceived

oppression, mismanagement or control of the Company, it is for the

members of the Company to move the appr opriate forum under

Sections 241 and 242 of the 2013 Act. The plaintiffs are strangers and

not members of the companies.

18. The Civil Court cannot look into the commercial viability of a valid

decision taken by the BoDs of Companies which are independent

juristic entities. 2024:CHC-OS:260-DB

7

19. Since the Division Bench has held that the Testamentary Court cannot

interfere with the day-to-day affairs of third-party companies or pass

any directions/injunctions in respect of them, the universal legatees do

not have such right, standing on lesser legal footing than the APL.

20. Learned counsel appearing for the respondent no.9, one of the other

defendant Companies, argues that the impugned order is not patently

perverse and as such, there cannot be any interference in an intra-

court appeal, that too at the interim stage.

21. Apart from reiterating the submissions of the respondent nos. 8 and10

in respect of Section 104 and Section 211 of the 1925 Act, learned

counsel for the respondent no.9 places reliance on Section 247 of the

said Act and argues that it is the APL Committee which has been duly

appointed by the Testamentary Court and thus has all the rights and

powers of a general administrator over the estate of the deceased

testatrix late PDB, of course, other than the right of distributing the

estate. The APL is subject to immediate control of the Testamentary

Court and is to act under its direction. Thus, the universal legatees do

not have any right whatsoever to assert any interest to the estate

directly. The sole charter of representation of the estate lies with the

APL.

22. Since the APL cannot interfere with the management of the defendant

companies, the plaintiffs/universal legatees, claiming a lesser legal

character, cannot have locus standi to initiate the suit.

23. In any event, it is argued that the Testamentary Court can direct the

APL to reverse the decision of the Boards of the defendant-companies if 2024:CHC-OS:260-DB

8

in its opinion the same is unlawful or otherwise detrimental to the

estate.

24. Learned senior counsel appearing for the respondent no.7, the minority

member of the APL, supports the cause of the appellants and points out

that the premise of the Minutes of the BoD dated August 23, 2024, was

that there were disturbances from the BCL employees to the enjoyment

to the tenancy at the existing fourth floor, which has been disbelieved

by the learned Trial Judge.

25. It is submitted that no decision was taken previously to the effect that

the Companies need any extra office 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 2024:CHC-OS:260-DB

9

powers of the Board of Directors of a company. The decision impugned

in the suit having been taken by the respective BoDs of the defendant-

companies in consonance with Section 179, it is argued that third-

parties/strangers to the Companies do not have the right to maintain

any legal action against the same.

29. Learned counsel relies on Section 430 of the 2013 Act, which precludes

the Civil Court‟s jurisdiction to entertain any suit or proceeding in

respect of any matter which the NCLT is empowered to determine by

the said Act or any other law. The Section further provides that no

injunction shall be granted by any court or other authority in respect of

any action taken or to be taken in pursuance of any power conferred by

or under the 2013 Act or other any law for the time being in force by

the Tribunal.

30. Thus, it is contended that Learned Single Judge rightly refused the

plaintiffs‟ prayer for interim injunction.

31. Heard learned counsel for the parties.

32. Before proceeding to decide the present appeal, we take note of the

limited scope of interference in a Letters Patent appeal, which is a

unique power vested in the High Courts, more particularly, Chartered

High Courts.

33. It is to be noted that the Chartered High Courts, while exercising such

charter, may act through Benches of different strength. Thus, a learned

Single Judge and a Division Bench exercise the same power, both as

the „High Court‟. As such, the notional appellate power of a Division

Bench over the decision of a learned Single Judge cannot be assumed

to create a hierarchical superiority of the Division Bench over the 2024:CHC-OS:260-DB

10

concerned learned Single Judge , as opposed to the hierarchi cal

structure as embodied in the Bengal, Agra and Assam Civil Courts Act

and similar other statutes, which embodies a pyramidal concept,

whereby the High Court exercises appellate authority over the District

Courts and the District Courts, in turn, over Civil Judges (Senior

Division) and Civil Judges (Junior Division).

34. A similar exercise is not desirable between Benches of different

strengths of the same High Court. Hence, unless there is perversity,

patent illegality or palpable lack of jurisdiction, there cannot be any

interference in intra-court appeals.

35. Another aspect of the matter has to be kept in mind. Although the

issue of maintainability of the suit has been kept open by the learned

Single Judge for being decided at the final hearing of the suit, the

question of maintainability can be incidentally looked 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 c rops 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 2024:CHC-OS:260-DB

11

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

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.

39. 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.

40. 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.

41. Section 247 of the 1925 Act, under which the APL has been appointed,

stipulates that the APL shall have all the rights and powers of a general

administrator other than distribution of the estate and shall be subject

to the immediate control of the (testamentary) court and act under its

direction. Hence, the appropriate remedy for the universal legatees, if

at all aggrieved by the functioning of the APL, would be to approach the 2024:CHC-OS:260-DB

12

testamentary court. The mere fact that as per the Division Bench order

passed in connection with the testamentary matter no injunction can

be passed or intermeddling can be undertaken by the testamentary

court or the APL in respect of third-party properties is not sufficient

justification for approaching the Civil Court. What the APL or the

testamentary court cannot do cannot indirectly be done by universal

legatees, who have an inferior legal right than the APL, as rightly

argued by the respondent-companies, till assent to legacy happens and

the property is distributed among the beneficiaries of the Will of late

PDB.

42. Another aspect of the matter is to be considered. The Division Bench,

in its judgment, specifically sealed the issue as to the APL being

entitled to function by virtue of majority decision of its members. In

terms of the said judgment, the third (judicial) member of the APL

would act as the arbiter in case of any difference of opinion between the

APL members and shall also have veto power in such cases. In the

present case, both the third (judicial) member and another member, in

their capacity asnominees 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 2024:CHC-OS:260-DB

13

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 the dissenting member to thwart the majority decision of

the APL members in an oblique manner through the plaintiffs cannot

be given a premium by the Court.

44. From the Company Law perspective, the plaintiffs are not “members” of

the defendant-companies and, as such, cannot invoke the jurisdiction

of the NCLT under Sections 241 and 242 of the 2013 Act.

45. The Legislature, in its wisdom, conferred powers only on the “members”

of a company to take out such challenge, deliberately precluding third-

parties to the company, obviously to prevent unnecessary and frivolous

intermeddling with the internal affairs of a company at the drop of a

hat, which might have the effect of paralyzing the functioning of the

company.

46. Again, Section 430 of the 2013 Act clearly debars a Civil Court from

having jurisdiction to entertain any suit or proceeding in respect of any

matter which the Tribunal is empowered to determine or to grant any

injunction in that regard. 2024:CHC-OS:260-DB

14

47. Section 9 of the Code of Civil Procedure also provides that the Civil

Courts‟ jurisdiction can only be assumed if there is no express or

implied bar. Section 430, read with Sections 241 and 242 of the 2013

Act, operate as an express bar, precluding the Civil Court from

entertaining the issues regarding internal management and affairs of

the Company.

48. The defendant nos.8 to 12-Companies run their business, whether

investment or otherwise, from their office space and it is essentially the

prerogative of their legitimately appointed BoDs to decide as to what

would be their requirement of office space.

49. We cannot also lose sight of the fact that the plaintiffs/appellants

repeatedly assert that the decision taken by the BoD of the five

defendant Companies was an APL decision, which automatically clothes

the Testamentary Court with jurisdiction.

50. However, as per several decisions of the Testamentary Court in the

present matter, as upheld lastly by the Division Bench, the APL can

exercise its powers over the estate through the direct shareholding of

late PDB, the testatrix, in the Companies where the testatrix held

shares. The said process was adopted in the present case and the

shareholders, including the APL exercising right by virtue of the

testatrix‟s shares, have spoken their mind and formed BoDs of the five

Companies in consonance with the provisions of the Company Law.

The BoDs of the respective 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 2024:CHC-OS:260-DB

15

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

jurisprudence primarily to protect the interest of the Company and its

shareholders – be it majority or minority. The plaintiffs, being complete

third-parties to the defendant-companies, claiming on the basis of their

rights as universal legatees of one of the shareholders, cannot have any

say at this stage over the functioning of the companies. As clarified by

the Division Bench, the control of the estate has to be exercised by

virtue of the direct shareholding of the testatrix and that too, exercised

by the APL duly appointed by the Testamentary Court and not

universal legatees, having an inferior legal status than the APL so to

say. 2024:CHC-OS:260-DB

16

54. Insofar as the validity of the impugned resolution of the five Companies

is concerned, the same is not hit by any contravention of the provisions

of the Company Law.

55. That apart, the impugned decision is justified inasmuch as it is evident

from the documents relied on by the plaintiffs/appellants themselves

before the suit court that the lease with the existing landlordBCL

expired on March 31, 2024 and despite repeated reminders of renewal

on behalf of the tenant-Companies, there has been no response from

end of the BCL. Such inaction on the part of the BCL/landlord justifies

the worst apprehension in the mind of the tenant-Companies and their

consequential action of seeking a tenancy on the seventh floor under a

different landlord. In any event, such justification need not be

furnished before the Civil Court in view of the discussions above.

56. A careful perusal of the impugned order refusing interim relief shows

that all the above aspects were duly considered by the learned Single

Judge. Hence, let alone meet the strict yardsticks and parameters of

interference in an Intra-Court Appeal,the order impugned before us

does not call for interference even by way of a regular first appeal. The

learned Single Judge having taken a plausible and justified view backed

by cogent reasons, there arises no occasion to interfere with the same.

57. Accordingly, APOT No. 371 of 2024 and the connected IA GA No. 1 of

2024 are dismissed on contest without any order as to costs, thereby

affirming the impugned order dated November 7, 2024 passed in IA GA

No. 1 of 2024 in connection with CS No.214 of 2024.

58. A word of caution here: all the above observations are tentative and

have been arrived at for the limited purpose of deciding the present 2024:CHC-OS:260-DB

17

appeal and shall not have any binding effect at any subsequent stage of

the suit.

59. Urgent certified server copies, if applied for, be issued to the parties

upon compliance of due formalities.

(Sabyasachi Bhattacharyya, J.)

I agree.

(Uday Kumar, J.) 2024:CHC-OS:260-DB