ORDER
Kalyan Jyoti Sengupta, J.
1. First mentioned application being G.A. No. 4375 of 2004 has been taken out by one Radha Debi Mohatta being the defendant No. 2 while application being G.A. No. 4376 of 2004 was originally taken out by one Laxmi Debi Newar since deceased being the original defendant No. 1. On her death intestacy, one Ajoy Kumar Newar, one Arabinda Kumar Newar, one Nanda Gopal Khaitan and one Debendra Kumar Mahatri Defendant No. 1(a), Defendant No. 1(b), Defendant No. 1(c) and Defendant No. 1(d) respectively were substituted in her place and stead. These two applications have been taken out by the aforesaid defendants for identical reliefs for appointment of an Administrator and/or a Committee headed by an independent and impartial Administrator to take over all movable and immovable assets and properties of the deceased, Smt. Priyambada Debi Birla including the voting rights and the right of control of the deceased in respect of the companies specified in schedule being Annexure 'J' to the petition; Administrator and/or Committee to be appointed herein to take over the management affairs and control of the M. P. Birla Group of Companies set out in schedule being Annexure 'J' and the shareholding of the companies specified in schedule being Annexure 'AA' including voting right; the said Administrator be directed to act as an Administrator, pendente lite, until disposal of the testamentary proceedings; the said person or persons be directed to take all decisions with regard to exercise of all rights in regard to shareholding of Smt. Priyambada Debi Birla in any company including the rights of control of other companies vested in Smt. Priyambada Debi Birla; injunction restraining the said R. S. Lodha and his men agents and/or assigns from dealing with, disposing of or encumbering any of the assets and properties of the deceased and/or exercising any right to control any company specified in schedule Annexure 'J' hereto. In the same testamentary suit and in connection with aforesaid two applications the propounder/executor has taken out two separate applications. One application has been taken out being G.A. No. 4474 of 2004 for dismissal of the application taken out by one of the defendants being G.A. No. 4375 of 2004. Similarly, another application has been taken out by the propounder being G.A. No. 4475 of 2004 for identical reliefs viz. for dismissal of the application taken out by another defendant being G.A. No. 4376 of 2004. It seems to me that the applications taken out by the propounder are counter blast to the aforesaid two applications filed by the caveatrix (defendants) for appointment of the Administrator. Going by the prayer portions of the applications made by the caveatrix I think prayer for appointment of the Administrator in 'terms of Prayer 'B' cannot be considered for if granted, that amount to taking over of management & control of separate juristic bodies by the Probate Court as it has no jurisdiction to do. However, the prayer for Administrator pendente lite, in terms of prayer (a) (hereinafter in short APL) can be considered.
2. In the body of both the petitions and affidavit in reply of the caveatrix/defendants the statements and averments purporting to constitute the grounds for appointment of APL are almost identically same. The said grounds shorn of mutual rival personal allegations of the parties, are summarized hereunder.
3. The purported Will propounded by the Executor R.S. Lodha is a manufactured and procured document. Similarly, the codicil relied on and propounded by the executor is also manufactured and procured. The genuineness of the aforesaid two testamentary documents has been seriously challenged as it appears that disposition made therein is wholly unnatural and there is no reason to exclude any relation amongst the members of the Birla family and to give away all her properties to the paid employee and/ or accountant viz. the executor. The lady, for the last five years before execution of the purported documents, was not at all in a good health or condition. She had been suffering from various ailments, which include acute renal problems, tuberculosis and other diseases. She had underwent kidney transplantation, she used to move on by wheelchair and almost periodically used to go to London for treatment. The said lady was completely in the clutch and influence of the executor. Besides, the lady on 13th July, 1982 executed a natural Will along with her husband whereby and whereunder some other persons who have already lodged caveat in order to context grant of probate of Will and testament dated 18th April, 1999 and codicil dated 15th April, 2003 have been appointed executors and trustees. In terms of the mutual Will the lady did not have any right or capacity to execute or publish any document subsequently after death of her husband. It appears from the mutual Will of the said lady and her husband executed in 1982 that all the properties have been given to the trust for the benefit of the public at large. It is surprising that the benevolent disposition of the lady completely disappeared from the purported last will unlike previous one, and the entire vast properties, both movable and immovable, have been given away to the said Lodha appointing him sole executor of the said last Will. In view of the execution of two mutual Wills dated 13th July, 1982 a separate suit for specific performance has been filed and the same is pending. The executors appointed by the said lady and her husband by the Will in 1982 had already applied for grant of Probate of the said Will and the same is pending. In this proceeding the executor Lodha has deliberately suppressed the real value of the assets and properties left by the said deceased in the affidavit. He has deliberately showed the value of the estate left behind by the said lady valuing her estate to Rs. 3 crore and odd. In the rough estimation the value of the estate and properties left behind by the said childless couple would be nearly Rs. 2500 crore.
4. The act and conduct of Lodha both before and after death of the said lady is such that the documents were manufactured and he was busy to grab the entire estate left behind by the said deceased, Lodha, within a few days after her death viz. on the date of Shradh ceremony hastily declared that he is the executor and beneficiary of the said Will of 1999 read with the codicil and in the capacity of the executor he had already rectified the respective share registers of the respective companies mutating his name in place and stead of the said lady in order to gain entire shareholding left behind by the said lady. The lady had more than majority of shareholding in all the key companies of the M.P. Birla Group and with this majority shareholding in the key companies all other companies can be controlled and managed by one person. The said executor has resorted to act of waste and destruction of the properties and estate as one of the premier jute mills has been closed down and other steps have also been taken for achieving same purpose. Immediately after her death, taking control of the majority shareholding, Lodha has brought his own chosen henchman and son to the Board of Directors of all the important companies, both holding and subsidiary companies. Serious challenge has been thrown to the said purported Will, as such, at this stage, it would not be safe if the said Lodha remains in control and possession of the majority shareholding and the affairs of the companies. Besides, the enormity of the estate left behind by the said deceased is such that it would not be safe at all to keep all the properties in his hands. Even before granted of Probate of the said Will Lodha has started acting not only as executor but also started taking benefit therefrom as a sole beneficiary of the said Will. Having regard to the valuation of the estate and also act and conduct of the said Lodha appointment of APL, has become absolute necessity.
5. The executor Rajendra Singh Lodha has filed one affidavit-in-opposition in terms of the Court's order to oppose the applications for appointment of APL as the allegations made in the applications are identical and same in verbatim. That apart he has made two separate applications as quoted above. Subsequently he has also filed a supplementary affidavit after filing of the affidavit-in-reply of the applicants caveatrix/ defendants. Upon reading of all the aforesaid pleadings the grounds to oppose prayer for appointment of APL as prayed for in the application are summarized hereunder.
6. No relief can be granted by appointing Administrator and/or otherwise to takeover management, affairs and control of the M.P. Birla Group of Companies as set out in Annexure or Annexure 'J'. These companies are separate and legal entities and the assets and properties thereof do not belong to the estate of the said deceased Lady. Moreover the aforesaid companies are not parties to the probate proceedings. In any view of the matter Probate Court has no jurisdiction to pass any order touching properties of the companies.
7. The present application is filed by the two ladies. The applications for appointment of APL have been made with oblique motive and mala fide. Actually these two ladies have been set-up to take out the applications at the belated stage. The probate application was filed some times in the month of July, 2004 and the instant application has been made on 20th December, 2004. Both the applications have been verified by one Kashi Nath Tapuria who is a man of questionable character, propriety and integrity. In one case the Division Bench of the Bombay High Court convicted him for his criminal offence. His verification should not be believed by this Court. Actually the Birla Group from the day one, when the Will of 1999 was published and made over, are trying in all possible ways to harass and malign the executor applicant in an illegal and surreptitious way. This Birla Group set-up some insignificant share-holders and also the employees of one of their companies to initiate proceedings before the Learned Court alleging oppression of minority share-holders and mismanagement of all the companies of M.P. Birla Group for the same relief viz. for appointment of Administrator. The allegations, statements and averments in those company proceedings are identically same as those made in the instant two applications. The said proceedings before the Company Court were contested by Lodha successfully and these proceedings have been dismissed. An appeal was preferred against the order of dismissal of the Company Court in this Hon'ble Court and such appeal has been dismissed also. Having not been successful to dislodge the Propounder Lodha and to disturb the smooth running of all the companies and the functioning of the respective boards of the companies this Birla Group have now set-up third person and/or their stooge and henchmen to initiate false and vaxatious criminal proceedings amongst other against Lodha and one of the attesting witnesses. Curiously all these statements and averments in this application as well as their defence in this affidavit-in-opposition have been made in the complaint of the criminal proceedings. Even the annexures to the complaint in the criminal prosecution are also the copies of the pleadings filed in the instant testamentary suit. So these applications are made as another mode of harassment and such vexatious litigations, according to Lodha, are nothing but an act of contempt and this Court should take note of this fact and should dismiss the application in limine.
8. While explaining and/or answering the charges of the applicants-on-merit it is stated basically that there is no necessity for appointment of APL. The estate is not huge or vast as it is sought to be projected. The challenge in the probate proceedings is not a challenge at all. The probate applicant Lodha is not a stranger in any sense whatsoever. Lodha, while having been appointed and worked as an Auditor of the M.P. Birla Group of Companies for a long time, started enjoying confidence of the husband of the deceased Lady and the deceased Lady herself. During the lifetime of this couple he was allowed to participate in the management and affairs of all the companies. After death of the husband of the said deceased Lady he used to advise and help her in all matters. During her life time even long before execution of the said Will of 1999 and Codicil he was appointed as Director, co-Chairman and even Chairman of various companies of M.P. Birla Group. The business of the M.P. Birla Group of Companies started flourishing and recovered from continuing loss in the business. All charitable activities were allowed to be looked after by Lodha during her lifetime. Because of his ability and trustworthiness he became very close and confidant of the said Lady. As a Chartered Accountant and Advisor he never charged any fees and acted voluntarily. The deceased Lady was of such a strong character and mind that she was not susceptible to be influenced under any circumstances. During life time of M.P. Birla there was strained relationship and after his death strained relationship became very acute. The Members of the Birla Group made all attempts to marginalize the Lady within larger Birla clans in all possible manners and ways. She, at that time, was helpless but she could come out of all these onslaught attempted against her as well as M.P. Birla Group of Companies. During this adverse period Lodha helped her in all manners and advised her as a most trusted friend. The Will has been executed followed by Codicil lawfully and with her full knowledge and understanding. She used to Chair the Board Meetings and she made him co-chairman and of her own brought his son in the Board of Directors of the Company and she had a lot of affection for his son, Harsha Vardhan Lodha.
9. So-called allegations of undue influence, forgery in relation to the Will of 1999 and Codicil are wholly baseless and unfounded and this will be proved without any doubt at the time of hearing of this probate proceedings. She was so disgusted and her mind was so distracted that she had no wish and as such she became very firm not to give anything to anyone of the Birla family even not to her brother. All the Birla Group and her brother wanted to destroy systematically the M.P. Birla Group of Companies and also other organizations of public charitable in nature.
10. He says that the Lady has left behind shareholding of five investment companies and she had very nominal shareholding so far as the manufacturing companies are concerned which are the real source of wealth and earnings of the M.P. Birla Group of Companies. She inherited from her husband roughly over one thousand shareholding in the investment companies and those shares have been recorded in her own name in the Share Register of the respective companies by way of rectification. On her death in terms of the Articles of Association of the respective companies and on the strength of the Will he has got his name recorded and rectified in the Share Register and the Membership Book lawfully. He has been appointed as Chairman of the Board of Directors of the respective companies lawfully in the Annual General Meeting of the shareholders in the manufacturing companies. All the manufacturing companies and other companies are running profitably and smoothly and there has been no waste or mismanagement. The allegations of selling of assets and properties made in the applications are unfounded. One of the companies viz. Birla Carbide and Gases was closed as the same was losing concern for over the years during the lifetime of the said Lady. Accordingly, assets and properties thereof were sold out. As far as closure of Soora jute mill is concerned the same was done in accordance with the decisions of the Board of Directors as it was found that manufacturing capacity of such jute mill was not economically sustainable. The said jute mill located at thickly populated area and there has been no scope for expansion of the same. Moreover, because of the topography of the land where the factory is situated during rainy season it remains submerged and it is very difficult for to maintain purposeful transportation of the goods to and for the factory premises. Road space is also narrow. Therefore, in order to expand the business and to modernize the same the said Soora jute mill is decided to be shifted at some place at the outskirt of the city where all steps are to be taken for relocating and resumption of the business very soon.
11. The investment of the dividend of the shareholding of the Lady is being made in accordance with law in recognized mutual investment companies and other Government investments and is legally permissible in the trade and industry to get high yield and returns. The immovable property at Kumaon Garden House of the Lady is being well looked after.
12. If any APL is appointed there will be serious repercussion in the share market and these prosperous profit making manufacturing companies will be rendered in no time a losing concern as the people will start losing faith. That apart, there are good number of collaboration agreements with the foreign investment companies and the Directors have been appointed from and amongst the financial institutions.
13. As far as the ability, image and standing of the applicants are concerned Lodha is in very enviable position to any individual person. He says he was a past President of FICCI. He has served this country in trade and industrial field in various manners. He served Prime Minister's council on Trade and Industry, Central Direct Taxes Advisory Committee, Board of Trade, National Institute of Public Finance and Policy, Committee for Defence Production, Advisory Committee of Capital issue etc. The applicant Lodha is also Director of the Boards of a large number of companies viz. National Security Depository Limited, Mumbai; PNB Equities Limited, New Delhi; SBI Life Insurance Company Limited, Mumbai; Henkel Spiek India Limited, Chennai. He has also served important policy making and regulatory committee constituted by the Government of India/Regulatory Bodies viz. SEBI Review Committee, SEBI Corporate Government Performance Review Committee; SEBI Committee on Disclosure of Offers Document; National Committee of Accounting Standard; Company Law Advisory Committee constituted under the Companies Act, Working Group of recast of the Companies Act; Bhagawati Committee for recast and take over the Rules and Regulations. He was also trustee of the various trust bodies and institutions.
14. Therefore, it is clear that his leadership skill, strategic thinking, stature and image are recognized and appreciated by all high profile institutions and personalities. Therefore, he is not a man of straw and stranger as it is pictured in the aforesaid two applications.
15. So-called allegations of siphoning of funds and diversion of the stock of cement are very minor things and the same have been taken care of with appropriate disciplinary measure by the efficient management. Now M.P. Birla Group of Companies are managed by very efficient professional management group and there is no need to appoint the persons who are not accustomed to and concerned with the business at all.
16. Mr. S. B. Mookherjee, learned Senior Advocate appearing with Mr. P. K. Das Senior advocate and Mr. S.P. Sarkar Senior Advocate appearing on behalf of their respective clients on behalf of the Birla Group advanced joint and identical argument in support of the application as follows:
He while leading the argument on behalf of all the applicants contends on plain reading of Section 247 of the Act it is clear that appointment of APL is in the sole discretion of' the Court, exercise of discretion is, subject to the condition to be satisfied that there should be a pending suit touching the validity of the will of a deceased person for obtaining or revoking probate, or grant of letters of administration. But he says the discretion has to be exercised by the Court taking into consideration of the principles or the factors as laid down by several judicial pronouncements. According to him the vastness of the estate seems to be prime consideration, the personal factors in terms of integrity credibility may be ground for taking the estate out of the hands of the executors. This position has been illustrated in the English decision reported in 1948 (1) All ER 271 and one of the oldest decision of this Court reported in 13 Cri LJ 34 the prospect of protracted litigation in addition to vastness and estate being in medio is also one of the considerations as held in Calcutta case reported in : AIR1952Cal418 and also Bombay case reported in AIR 1932 Bom 342. The necessity to preserve and protect the estate is not the sole guiding consideration. It is only upon consideration of various factors in a given case the Court would come to the conclusion where such appointment is necessary and to be made. In principle he agreed that appointment of APL is guided by the principle in case of appointment of Receiver, that is to say when the property of a deceased person is in medio, the property or an estate is said to be in medio when nobody is in beneficial ownership of the property or the estate. In relation to an application for probate of a Will the expression 'in medio' are to be understood in an extended sense. In support of his application he seeks reliance on the following cases:
(i) : AIR1955Mad430
(ii) : AIR2004SC2060
(iii) : AIR1952Cal418
17. In a probate proceeding such a situation can arise in either of the two situations:
(i) When no Executor is appointed by the testator in his Will
(ii) When, though an executor is named in the Will his appointment is under challenge.
18. From the judgment cited by the learned Counsels for the Lodha it will appear that in APL can be appointed whenever there is a serious challenge to the appointment of the Executor. He contends further that ground of personal disqualification and/or 'in medio' are different and separate. Undoubtedly when the estate is in medio the Court would invariably appoint an APL regardless of the fact that the present integrity and credentiality of the Executor are in question rather no charge of waste or management has been made out or even levelled against alleged Executor. But conversely even if an estate is not in medio but there was a question about the integrity, credibility of the executor, a Court can appoint APL on that ground alone. He does not think that the charge of malfeasance or mismanagement is sine quo non for appointment of APL. Appointment can be made immediately after a caveat has been lodged with supporting affidavit or at least when the probate application has been converted into testamentary suit, before any testing time for the executor to bring his credibility or capability has elapsed. It is really mind-set of the Court when it will appoint APL, for example if the Court feels on the given facts and circumstances the Executor is not desirable or trustworthy person the Court may relieve him of discharging his duty of the Executor during pendency of the proceeding. In this case challenge to the Will has been made on two fold grounds namely (i) direct allegations of the genuineness of the Will namely on the ground of forgery, undue influence and importunity of the Will. These grounds are made out in the application (Paragraphs 7, 5 and 9). (ii) Existence of the mutual Will of 1982. Implication of the mutual Will have been taken note of legally by the judicial pronouncement (De Dale 1993 (4) All ER 129). Therefore the challenge to the appointment of executor is really covered by the challenge of the genuineness of the Will and also by existence of the mutual Will. As such the named executor in the allegedly last Will is not entitled to take possession of the estate or dispose of the same the estate must be dealt with by the executors 1982 Wills in accordance with the trust which had come into existence on death of M.P. Birla. In view of the aforesaid situation there cannot be any doubt that estate left by the said Lady must now be viewed as an estate 'in medio.
19. Real question is, Mr. S. B. Mookherjee then urges, whether it is desirable or proper to keep the estate of the deceased in the hands of the named executor. It is submitted that on the basis of settled principles of law there is no doubt that the estate is in medio. The other aspect is to see whether there is anything against Lodha's personal standing or credibility, which would necessitate the Court taking the estate out of Lodha's hands at this stage. In the light of information and facts which have now been revealed following the defendants' application for appointment of a Receiver for the purpose of making an inventory and eventually for breaking open the locks show Lodha in a very dim light. Virtually a treasure trove has been discovered through the efforts of Joint Special Officers. He urges that two possible views can be taken on this discovery; either Lodha was not aware of their existence or he deliberately concealed the same. According to him under Section 319 of the Indian Succession Act, 1925 the foremost duty of an executor is to acquaint himself with the assets and properties of the deceased and getting the same with reasonable diligence. Lodha made no effort whatsoever to discharge the primary obligation and in every likelihood in absence of the caveators making the instant application such treasure trove would have remained undiscovered. The indication, however, is very strong for the view that he deliberately concealed the fact. Lodha claims to have enjoyed Priyambada's confidence since about 1996; he had the access to intimate papers and documents and correspondences dating back about seventy, it is inconceivable, incredible and naive for Lodha to contend that he was unaware of the strong room and treasure trove which has now been discovered amongst other things. If the petitioner did not make the application for inventory and appointment of Receiver the strong room and the treasure trove would have disappeared or remained concealed. Therefore, it is plain and simple that there cannot be slightest doubt that the estate is not safe in the hands of Lodha. The significant portion of the estate of the deceased consists of shares in various companies and some 30 odd companies were used to be controlled by the deceased Lady through her shareholding in four investment companies. This power and control, he urges, is as much part of the estate as any tangible assets, which were owned by her till her death. The estate means all that vests under Section 211 of the Indian Succession Act. He relies on a decision of Patna High Court reported in AIR 1924 Pat 721 and : [1981]127ITR855(Ker) . The estate also includes of right of action as decided in an English Case reported in 1955 (2) All ER 147. Actually these group of companies has now become a single corporate entity has been gaining ground. 'Piercing Corporate Veil' theory as a rule is invoked when a network of interlocking companies and trust used as a device or engine for avoidance of tax. This concept can also be resorted to for the ends of justice pure and simple. He has referred to an English decision reported in 1985 (Butterworths Company Law Cases 333 at page 337) and he submits with full assistance of his learned Junior Mr. Das and Learned Supporting Counsel Mr. Sarkar that Administrator should be appointed all over the estate and over the controlling block of shares of six investment companies by directing that shares now standing in the name of Lodha as an Executor should be transferred to the Administrator and his name will be recorded in place and stead of that Smt. Priyamvada Devi Birla. This would mean that the Administrator then would exercise all powers in all the controlled companies for the benefit of the persons who should be the ultimate beneficiary in such a manner as the Executor would do. It is feasible under the law as it has been pronounced by a decision of an English Court reported in 1952 (1) All ER 267.
20. Mr. S. Pal, Senior Advocate, appearing for one of the Birla Groups while pressing his client's application in addition to what has been laid by Mr. S. B. Mookherjee, contends that in this case two main issues have arisen for appointment of APL. One is prima facie case of contest to grant and another is serious challenge of the Will and the appointment of the executors. He contends further that in order to understand the case of necessity the following facts and circumstances are required to be considered by the Court. The magnitude of the estate, which comprises shares, according to his client's estimation, is Rs. 2500 crore. This value has been elaborated in the application for APL in paragraph 14 and also amended affidavit of assets of this application, which shows it as Rs. 4,21,82,878/-. During pendency of these proceedings the case of necessity is also established. It is observed by this Court in the interim judgment and order dated 11th March, 2005. The apprehension of the Court recorded in the judgment and order was proved to be correct when inventory was conducted by the Joint Special Officers. The keys of almirahs, cupboards, safes, strong room were not made available to the Special Officers. The executor was completely unaware of the vast and invaluable treasure trove viz. jewellery, gold ornaments and immensely valuable, ancient and medieval gold coins. These assets were not mentioned in the affidavit of assets. Therefore, the estate is at risk since the executor has failed to discharge his duties imposed on him by not disclosing and further not collecting all assets. Necessities are also apparent from the fact and in this case there is conflict of interest by reason of the fact that the executor himself is the beneficiary under 1999 Will. According to him, the settled position of law is that the executor acts in a fiduciary capacity. He should not put himself in a position where his personal interest is likely to be in conflict with the idea of protection of the estate (the English decision reported in (1896) AC 44 is referred to). It is also observed by this Court in the judgment and order in this matter at the ad interim stage that it is wholly unsafe to rely on the mind of the executor who is also beneficiary. He contends further that human nature and mind is ordinarily swayed by his own interest rather than duty. As such, in order to avoid the conflict of interest, appointment of APL is necessary. His next contention is that it is completely uncertain at this stage to whom the estate will go, because in terms of the provision of the prior mutual Will of 1982 for which a suit has been filed the executor shall be bound by the obligation of the mutual Will and ultimately the estate is bound to go to the trustees for charity purpose. The concept of the mutual Will has been accepted by the Supreme Court in its judgment reported in : AIR1959SC71 and also by this Court. The genuineness of 1982 Will has been questioned by the executor simply because the genuineness of 1999 Will have been questioned by the petitioner. It has also been observed by this Court that the estate is in the custody of the Court pending probate proceedings. Therefore, independent machinery to look after the estate which is in the hands of the Court is essential.
21. The named executor is not reliable person. He is susceptible to professional misconduct as a chartered accountant holds the position of the trust as has been settled by the judicial pronouncement reported in : AIR2000Ker212 . Under provisions of Chartered Accountants Act, 1942 and Chartered Accountants Regulation, 1988, which imposes several duties on chartered accountants and when conduct of a chartered accountant is in breach of such duties, contrary to honesty, opposed to good morals or unethical, then he is guilty of professional misconduct. This proposition of law has been settled by this Court also in its judgment reported in AIR 1946 Cal 414. Lodha has committed various acts of professional misconduct as it has been stated in the affidavit-in-reply in paragraph 42, as such, when it has been filed before the appropriate forum against him.
22. Lodha is in habit of making false statement on oath in the instant proceedings while stating that there has been no sradh ceremony and further stating that there was no trace of medical papers and files to ascertain physical and mental capacity of the deceased lady. He has made false statement to malign Kashinath Taporia regarding his honesty and integrity by only referring to judgment of Bombay High Court but not referring to the judgment of the Supreme Court, which had overruled Bombay High Court judgment. While taking control of entire estate Lodha has been making pecuniary gains by investing funds of M.P. Birla Groups through the companies controlled by him i.e. PLC Securities Limited, 100% subsidiary of Lodha Capital Agreement Limited. It is strange that within 15 days from the date of her death Lodha got his name mutated in the respective companies as executor in place and stead of the deceased lady to gain control of the majority shareholding which, in its turn, control the entire M.P. Birla Group of companies. His whole scheme and design is to obtain control of the entire estate as early as possible without wasting single day and to treat the entire estate as his own.
23. As such, he says that immediately after death and during pendency of this proceeding his act and conduct is wholly untrustworthy and renders him misfit to act as an executor.
24. He submits, while forwarding his point of argument that there is serious challenge about the validity of 1999 Will which has been executed under suspicious circumstances. The Court cannot accept a document to be a genuine last Will prima facie unless the executor removes suspicious circumstances. In this connection he has referred to a good number of Supreme Court decisions viz. : AIR1959SC443 : [1977]1SCR925 and : [1998]2SCR486 . The purported Will is also unnatural and this fact itself is suspicious circumstances surrounding the execution of the Will. He has referred to, in this connection, the aforesaid judgment of the Supreme Court and also another judgment of Supreme Court reported in : [1964]6SCR814 . The deceased couple was childless and had a charitable disposition throughout their lifetime and this will be evident from the fact that they set up, during their lifetime, quite a good number of trusts, societies and those were sponsored in all respects and run by them, Mutual Wills were executed by them in the years 1981 and 1982 of which the ultimate beneficiaries are pubic charities, vesting all personal assets of both the couple in charities through the medium of the trust created in 1988. The total deflection from the charitable disposition of the deceased and the executor becoming the sole beneficiary reveals the unnatural character of the Will and raise high degree of suspicion. His client has challenged the Will & codicil and appointment of executor on the ground of unnaturalness. Lodha has not made attempt to dispel the suspicious circumstances satisfactorily. The explanations given by him are far from acceptable. The concealment and delay in production of the Will is considered to be suspicious circumstances. The change of lawyer at the time of preparation of the Will and anticipatory/pre-emptive recital in the Will are also suspicious circumstances. The physical and mental capacity of the testatrix was such which renders that she was incapacitated to execute any document because her physical and mental capacity were considerably impaired because of various and serious ailments including kidney transplant. Moreover, the alleged Will is also product of undue influence and it is also one of the grounds of invalidation of the Will and this has been accepted by the Court of this country reported in AIR 1955 Cal 15 and : [1955]1ITR1035(SC) respectively. The principle of undue influence applies not only to the Will but also various other transactions, which are inter vivos (in this connection reference is drawn of a Supreme Court decision reported in : AIR2005SC52 .
25. Undue influence of Lodha over the deceased lady can conclusively be inferred because of her age and the association with her alter demise of her husband to carry on huge business estate in the capacity of chartered accountant. In fact, his intimate closeness with the testatrix has been admitted in the pleading viz. in the affidavit-in-opposition to the application for APL (para 5(c), para 28). He contends that in order to decide the question of undue influence the Court is to judge two things viz. (i) relation-ship between the person influenced and one influencing; and (ii) the ingredients which will make such influence undue. In this connection he has referred to an English decision reported in 2001 (4) All ER 449. The burden to establish undue influence does not lie on the person who asserts but on the person who is in a position to dominate the Will or influence the mind of another. Section 111 of the Evidence Act, he urges, is to be applied regarding the burden of proof. This proposition of law is supported by a Supreme Court decision reported in : AIR2003SC4351 . The magnitude of the disposition is also a factor while considering the question of burden of proof. Therefore, it is not imperative to establish actual domination particularly when the person is charged with undue influence with a fiduciary position vis-a-vis the person influenced. He relies on, for this proposition of law, the following decisions viz. 2001 (4) All ER 449, 1896 AC 44 and 2005 (2) WBLR 311. So, these are the aforesaid serious questions touching the legality, validity and genuineness of the Will. It is an admitted position that the control of the M.P. Birla Group companies constructs the most valuable assets of the estate of the deceased. It is judicially settled, according to him, control includes de facto control. In this connection he has referred to a decision of this Court reported in : AIR1973Cal450 . If the executor -cum-beneficiary is allowed to continue to control these properties then he will exclusively control and manage the entire estate as the deceased lady was controlling during her lifetime. If the balance of convenience and inconvenience is weighed appointment of APL does not prejudice Lodha, in any manner, as his personal assets or shareholding in his personal capacity, as distinguished from his capacity as executor, is not affected. Lodha's controlling capacity as executor will only be suspended till the determination of the suit. According to him, if Priyambada could exercise control and Lodha-qua-executor can exercise control, there is no reason why a thoughtfully chosen person/persons/body of persons will be unable to manage and control. In the context of the purport Will the deceased testatrix has thought of appointment of APL in case of inability of Lodha for any reason. According to him, the apprehension of adverse effect on the shares in the share market is baseless as the share price in the stock market depends on the performance of the companies. If there is no adverse effect of the propounder in taking over control after death of the testatrix, there is no reason to assume that the appointment of an Administrator would depress the share price. At present, according to his study, thirty six companies out of thirty eight companies are managed by M. P. Birla Group after death of Priyambada. Out of these thirty six companies there are only four manufacturing companies viz. Birla Corporation Limited, Birla Ericsson Optical Limited, Universal Cables Limited and Birla Tele Links Limited whose shares are listed in the Stock Exchange. No share is held by public in thirty companies, therefore, there is public shareholding only in two companies viz. Birla Financial Corporation Limited to the extent of 12% of shares and Talavadi Cements Limited to the extent of 30% of shares. The shares of these two companies are, however, not listed in the Stock Exchange. 63.75% of shares of Birla Corporation Limited are held by M. P. Birla Group and about 10% of shares are held by Indian public and private corporate bodies and the rest are held by mostly financial institutions.
26. Therefore, he contends that there will be no impact on the share market or on the change of share position in the event appointment of APL is made.
27. Mr. A.K. Mitra and Mr. S.N. Mukherjee, Senior Advocates while opposing the application for appointment of APL and placing their two applications for dismissal of these two applications contend that both these applications have been made with oblique motive and are mala fide. These applications are liable to be dismissed on the ground that the applications have not been placed before the Court with clean hands. They are not interested in the welfare of the business of M. P. Birla Group. It is evident that they are trying to advance the cause of their respective businesses and weaken and disintegrate M.P. Birla Group. Birlas by exercise of their majority shareholding in two companies of M. P. Birla namely the Rameswara Jute Mills Ltd. and Jute Investment Company Limited the control of these companies have been taken over in September 2004, by taking these companies out of the fold of M. P. Birla Group. The real motive of disintegration of M. P. Birla Group by other Birlas has come out on the surface. Another Company namely Indian Melting and Refining Company Ltd. has been taken out of the fold of M.P. Birla Group within 45 hours of cremation of Priyamvada Devi. This company is shown as part of M. P. Birla Group in the suit filed by Birlas in C.S. No. 5 of 2004. As such no prayer has been made for appointment of Administrator over this Company. Proceeding for destabilizing companies of M. P. Birla Group have been initiated by Birlas. Four such proceedings were started in Company Law Board, two against Birla Corporation Ltd. and two against Vinda Teli Links Ltd. However Birlas have been unsuccessful in getting favourable order from the Company Law Board. Even the appeal filed by them in this Hon'ble Court has been dismissed. Criminal proceedings initiated by Birlas through, their henchman R. P. Pansari against Executor the draftsman of the Will and witness to the codicil obviously with intention to pressurize them to succumb.
28. They contend the challenge howsoever, apparently strong is not a valid ground for obtaining interim order. Validity of objections will be determined at the hearing of the testamentary suit on taking evidence. In support of their submission they have relied on paragraph 19 of the Division Bench judgment of this Court reported in : AIR1952Cal418 , even prima facie it will appear that Will was executed by the said Lady with her free mind and out of her own volition. She was completely mentally and physically fit and alert. This will appear from the statement made in the Will. The alleged ground of suspicious circumstances is without any substance and devoid of any merit and at this stage these are not at all germane.
29. According to them in order to get an appointment of APL the strong case of necessity for appointment has to be made out. Their client is the named executor and chosen person of the testatrix and he cannot be removed from discharging his duties as an Executor. The case of necessity is not made out by a single factor and should be considered on the basis of the fact that whether the estate of the testator is in medio that is there is no one to take control of the estate and the income arising therefrom. In support of their submission they have also referred to following decisions.
13 : AIR1952Cal418 .
30. In order to displace the Executor strong case has to be made out that he is guilty of gross misconduct and committing mismanagement and waste and there is actually danger of the estate being wasted. They referred to the decisions of this Court (13 Cri LJ 47 AIR 1933 Bom 342) in this connection.
31. The Estate of the Testator cannot be said to be in medio. It is an admitted position that Lodha has taken complete control of the estate. This admission will appear from paragraph 15 of the application being G.A. 4375 of 2004 and in the Affidavit in Reply of Kashi Nath Tapuria paragraphs 8(a) and 11 under the law it cannot be said that the estate is in medio as the same has stood vested in the executor, (Lodha) on her demise. They have drawn reference in this connection to Section 211 of Indian Succession Act : AIR2004SC2060 . All the valuable articles which are liable to be easily removable namely ornaments, gold coins etc. have all been found intact and have been kept in bank vault sealed by the Joint Special Officers. There is no allegation that any of the four houses where the movables belonging to Priyamvada Devi are situated, are not protected. In fact all the houses are maintained by the respective owners as they were during the deceased Lady's lifetime with full security arrangement. As such it cannot be said that any of the estate of Sm. Priyamvada Devi is in medio that is custody of no one. On the contrary the estate is well protected and preserved. It is settled law that the Executor being the owner of the estate in the right of the testator and not in the right of the beneficiary. The Lady has been acting as an Executor not as a beneficiary. Executor derives his title not merely in getting the grant of probate. They seek reliance on two decisions (1) AIR 1924 Pat 721 and 1955 (2) All ER 147.
32. Appointment of Administrator is made when the preservation and protection of the property is required. According to them the nature of the property in this estate are such that it can easily be protected and preserved and indeed they have been preserved. The Birlas have given inflated valuation of the estate and there is no support of such valuation. The nature of the estate are shares in various M. P. Birla Group of companies, Shares in other companies held by them, 1/5th undivided shares of orchard in Kumaon, ornaments, jewelleries, gold coins, silver utensils, house hold goods, pearls, books, plate, antiques, investment in mutual funds and Government bends and National savings Scheme. Where as the value of shares in M.P. Birla Group of Companies as far as the balance sheet of Priyamvada Devi Birla as on 31st March, 2004 is Rs. 1.21 crore approximately as stated in the affidavit of assets by Lodha. Since the main asset of the estate is controlling block of shares in M. P. Birla Group of Companies and power and control is the main asset, the control must be preserved or otherwise the value of the main asset will be sharply depreciated. Any possible dissipation in controlling block of shares of M. P. Birla Group of Companies by transferring any share belonging to the estate has already been restrained at the ad interim stage to which Lodha agreed.
33. This fact has also been judicially observed in judgment reported in 2005 (2) WBLR Cal 311 and the movable articles being considerably valuable have also been inventorized and kept in bank vault sealed by the Joint Special Officer. Control of the estate over M. P. Birla Group of Companies is to be preserved as power of M. P. Birla Group of Companies must not be allowed to be disintegrated or valuation in its hands of business of rivals of predators. The controlling power over M. P. Birla Group of Companies held by the testatrix during her life time being the main asset of the estate will be lost if M. P. Birla Group of Companies are allowed to be disintegrated or any disinterested stranger is allowed to take charge. This apprehension is also felt by the Court at the ad interim stage. It is recorded in the judgment as quoted above. Adequate protection has already been given by the Court as the ad-interim stage by directing Lodha to maintain status quo in regard to transfer of shares received or already received or which might be coming into his hands. Status quo order has been extended to immovable property. The nature of the estate though vast but not complex and the source of income are matters of record and transparent. All income coming from the creditor is directly brought to the Bank Account and received in the form of account payee cheques. There is no allegation that the income of the estate is being collected. No case is at all made out there is any possibility of dissipation of the controlling block of shares. The activities of manufacturing companies in M. P. Birla Group of Companies are manufacturing cement and cables. Performance of all the manufacturing Companies has shown vast improvement in all respect namely profit per ton, total turnover, total profits, dividends, ratio of profit to assets, price of shares, trading volume of shares including in comparison with other cement companies including other Birla Companies and cable manufacturing companies. Birlas object is to create difficulties in the running of manufacturing companies in the usual course so that growth and health are deterred. Birla Corporation Ltd. is business rival of other Birla Group of Companies who took control over cement manufacturing companies. Birlas object is to discredit Lodha. Having regard to the nature of the main assets of the estates, which are well protected and preserved by the ad interim order of injunction already passed. No case of necessity for any further order in this respect has been made by the Birlas.
34. I have heard the contentions of the learned Counsels appearing for the respective parties and I have gone through the statements and averments made in the respective applications of both the parties and other records produced before me. In this matter the whole question is whether the APL should be appointed in terms of prayer (a), or not. No one has raised disputes to the following facts and statements and records as mentioned hereunder, as I have found also:
(a) Lodha is the named executor of the testamentary document dated 18th April, 1999 said to be the last one read with codicil dated 15th April, 2003 and he is almost sole beneficiary of the estate and properties which are enormously vast and diverse in nature left by the deceased Priyambada Debi Birla (hereinafter referred to in short as P.D.B.);
(b) The application for grant of probate of the above Will is contested not only by the heirs and legal representatives in case of death intestacy but also by other persons seriously challenging appointment of executor and disposing capacity of the deceased testatrix.
(c) There exists prior two testamentary documents both dated 13th July, 1982 said to have been executed by the PDB and her husband M. P. Birla since deceased and the said documents are described to be mutual ones.
(d) These two testamentary instruments are also sought to be perfected by applying for grant of probate of these two documents.
(e) Several persons have been executors in these two testamentary documents of 1982 and the beneficiaries thereof are not individual persons, rather by these two documents estate and properties of both the persons have been vested in the charitable trust.
(f) The applications for grant of probate of these two documents are also contested by Lodha.
(g) A civil suit has been filed by the executors of the documents of 1982 against Lodha for alleged breach of agreement made by PDB in terms of the mutual Will. By this suit the plaintiffs herein who are also parties to this probate proceedings have essentially challenged disposing capacity of PDB by her testamentary document of 1999, consequently right, title and claim of Lodha. This suit is also contested by Lodha seriously.
(h) A criminal prosecution has been initiated amongst others against Lodha in the learned Court of Chief Judicial Magistrate Alipore 24 Paraganas (South) by making a complaint by one Rajendra Prosad Pansari alleging criminal breach of trust under Section 406/417/420/120B of the Indian Penal Code. The cognizance of the said complaint had been taken by the Chief Judicial Magistrate and this was registered as case No. C-469 of 2004. In this criminal proceeding an application was also made for search and seizure under appropriate provision of the Criminal Procedure Code.
(i) This proceeding was sought to be quashed by filing an application under Section 482 of the Code of Criminal Procedure by one S.N. Prosad being one of the accused. This proceeding was supported by Lodha who was also a party respondent. This application for quashing was dismissed by this Court by the judgment and order dated 1st July, 2005 holding amongst others that the complaint and the statement of witnesses recorded under Section 200 of the Code and the documents accompanying the complaint if read on the whole make it clear that the allegations made in the complaint, if they are taken at their face value and accepted in their entirety without adding anything to it or subtracting anything from it prima facie establish elements of alliance to go for trial. This judgment and order was taken to Supreme Court of India and the challenge against this judgment failed. Therefore, it is clear that Lodha along with other persons are facing trials. From the statements and observations, recorded in the judgment of this Hon'ble Court in criminal revisional jurisdiction, it appears that the allegations and complaints center round the assets and properties left behind by the said PDB and her husband.
(j) In the past, there were proceedings by group of shareholders against Lodha under Section 247(1A) of the Companies Act. This proceeding had to be contested by Lodha. However, this company proceeding was dismissed. In this company proceeding as many as 29 companies were entangled and PDB was held to be the de facto controller of these companies by virtue of her majority shareholding of the key companies, which are mostly investment companies.
(k) During the pendency of the probate proceedings Joint Special Officers were appointed by this Court on the basis of the applications of the defendant and contesting Birla Group and such appointment was not, of course, opposed by Lodha. The Joint Special Officers made inventories of the personal properties and effects of PDB, and they found large number of valuable and antique articles, and other properties, which include ornaments, jewellery, gold coins and artifacts. These were found from the houses and residences used by PDB in four different cities viz. Allahabad, Calcutta, Delhi and Mumbai. These could neither be found nor be described in the affidavit-of-assets of Lodha.
35. According to Lodha, in the affidavit-of-assets, the value of the estate left behind by PDB and her husband combinedly would be around Rs. 4 crores whereas Birla Group have stated, in their affidavit-of-assets, in the region of not less than Rs. 2000 crores. Therefore, no reasonable prudent man can dispute that the amount of estate is huge and vast. The most important estate of the deceased consists of her controlling block of shareholding in respect of the investment companies and through it the manufacturing companies which are the source of the real wealth of M. P. Birla Group are controlled and can be controlled by virtue of majority shareholding in the key investment companies. It is neither known to the Court nor it has been disclosed by any of the persons in clear expression what is the dividend and mode of utilization of this dividend arising out of this controlling shareholding and other shareholding.
36. On the aforesaid factual aspect and other allegations, and on the proposition of the law propounded by the parties question of appointment of APL has been raised in this case. The provision for appointment is to be found at present in Section 247 of the Indian Succession Act, 1925 which is set out hereunder:
Administration, pendent elite - Pending any suit touching the validity of the Will of a deceased person or for obtaining or revoking any probate or any grant of letters of administration the Court may appoint an administrator of the estate of such deceased person, who shall have all the rights and powers of a general administrator, other than the right of distributing such estate, and every such administrator shall be subject to the immediate control of the Court and shall act under its directions.
37. In the said section there is no ground or guideline laid down by the legislature for such appointment. The word used in the section is 'may' and in my opinion the same suggests, without any doubt, directory rather enabling provision. So under no stretch of imagination it can be termed as 'shall' or to put it differently the Court is not bound to appoint as a matter of rule if any application is made. When discretion has been conferred upon the Court obviously this must be exercised with restraint, I mean judicial restraint and prudence and in the given facts and circumstances that warrants for such appointment. The power of appointment of this Court is not a new feature by this Act and previously power of the Court of this nature was given by the respective previous statutes in an action of this nature. The judicial pronouncement on this subject rendered by the Court of this country as well as English Court are not less in number.
38. However, condition precedent for entertaining such application is that there must be a suit touching validity of the Will of the deceased person or any proceeding for obtaining or revoking any probate or grant of letters of administration must be pending. In the case on hand two probate proceedings are pending in relation to prior two different Wills making different disposition of the estate and proprieties of the deceased. Moreover, civil suit is also pending in this Court touching validity of the 1999 testamentary document. On the strength of the 1999 testamentary document the control of the entire estate has been taken by Lodha. According to Mr. Mitra and Mr. S. N. Mukherjee, and so also the provision of the law the estate and properties vest unto him as named executor under the provision of Section 211 of the said Act. The provision of the said section is quoted here-under:
Character and property of executor or administrator as such.- (1) The executor or administrator, as the case may be, of a deceased person is his legal representative for all purposes, and all the property of the deceased person vests in him as such.
(2)...
39. In spite of the provision of vesting as under Section 211 of the said At the effect of vesting is that possession, control and management of the estate vested with the Executor. However, in my view, such right is not an absolute one and the same is subject to the provision of Sections 213 and 214 of the Act. In spite of the above right of the executor on death of the testator/testatrix the provision of appointment of APL under Section 247 has been provided for. Therefore, it is clear executor cannot have by virtue of Section 211 absolute right to manage and control of the estate left by the testator/testatrix. It appears principle for appointment of APL in a testamentary action was laid down for the first time in case of Bellew v. Bellew 1865 (4) SW & Tr 58 by the Probate Division of the English Court, as there was no defined principle for appointment in the relevant statute viz. Court of Probate Act, 1857, though power was conferred upon the Court. However, in this case as a matter principle it was ruled by Sir. J. P. Wilde, learned Judge, that practice of Chancery Court in the matter of appointment of Receiver should also be followed in case of appointment of APL in Probate Division in order to avoid unseemly racing of litigant to bring about conflict of decision of two different divisions. In the Chancery Court it was practice to appoint Receiver when there was bona fide dispute irrespective of the condition of the estate, or of the person who has the actual possession of it, on the ground that while there is no one legally entitled to receive or to hold the assets, or to give discharges. Thereafter in the case Horrell v. Witts 1869 LR IP & D 103. The practice followed by Chancery Division for appointment of Receiver was not followed on the fact of the case by the same learned Judge, because the estate of the deceased consisted of share in running partnership business and surviving partners were managing the firm well. Subsequently in the case Re.Oakes, Oakes v. Porcheron (1917) 1 Ch 230, the learned Judge sitting in Chancery Division appointed Receiver displacing the named executor, while doing so the learned Judge assimilated the principle followed for appointment of Receiver with that of appointment of APL in Probate action. After a long time in case of Bevan v. Houlds Worth 1948 (1) All ER 271, Lord Green, Master of Rolls while sitting in Court of appeal had applied the practice of Chancery Division in appointing Receivers in the Probate Division for appointment of administrator pendente lite. In this case the principle laid down in the case of Bellew v. Bellew was followed but the principle followed in case Horrell and Witts were distinguished. In this case the Appeal Court had observed that there was a bona fide contest in the probate action and having regard to size of the estate in order to protect the same appointment of Administrator pendente lite was necessary. It is to be noticed in this judgment, that allegations against the named Executor or for that matter theory of necessity for appointment did not impress the learned Judge, to be a factor.
40. However Courts of our country it seems to me did not blindly follow the principles laid down in case of Bellew v. Bellew or of Horrell v. Witts. In the case of Brindaban Chandra Saha v. Sureswar Shaha Paramanick and Ors. 10 CLJ 263 Division Bench of this Court taking note of the English case Bellew v. Bellew, ruled that the Court of Probate would grant APL in all cases where necessity for the grant is made out; and this is so because while the suit is pending there is not one legally entitled to receive or to hold the assets or to give discharges. In the case of Jogendra Lal Chowdhury v. Atindra Lal Chowdhury 13 CLJ 34 the Division Bench of this Court was again of the view while dealing with the corresponding provision of present Section 247 (Section 34 of the Indian Probate and Administration Act, 1881) that not only there must be a contest in the probate proceedings there must be necessity for such appointment.
41. In the case of Bhuban Mohini Debi v. Kiran Bala Debi 13 Cri LJ 47 the Division Bench of this Court noted the practice followed in the Probate Division of English Courts, and having taken note of Bellew v. Bellew and also English Decision in case of Horrel v. Witts, held that unless strong case is made, out that he has dealt with the business improperly the Court will not appoint administrator pendente lite where there is a person named in the Will and whose appointment is not questioned, the dispute therein for instance, related to codicil only, and not affecting the appointment of Executor. In this case factually the appointment of executor was not challenged but the competency of the personnel was under challenge, and it was held on the facts and circumstances that the lady on whose hand all the properties were vested, was not incompetent to manage the same as such the Court found that there was no necessity to replace by appointing a third person.
42. In the case of Pandurang Shamrao Laud and Ors. v. Dwarkadas Kathandas and Ors. AIR 1933 Bom 342 the learned single Judge of the above Court while dealing with the case of appointment of APL under Section 247 of the said Act has held amongst others (at page 55) before appointing APL the Court has to be satisfied in the first place that there is a bona fide suit pending touching validity of the Will of the deceased. Secondly the Court before exercising its jurisdiction has also to be satisfied whether there is necessity for such grant.
43. At page 344 of the same judgment the scope of Section 247