Sunday, July 17 2005 11:59 Hrs (IST) - World Time -

Kolkata: In a crucial observation in the Birla-Lodha case for the estate of M P Birla, the Calcutta High Court has said that, the allegation of fraud against Rajinder Lodha is 'not absurd and inherently improbable' and hence it should be decided in a trial by a criminal court.

In a detailed 87-page order Justice P N Sinha while dismissing a petition seeking quashing of criminal proceedings against Lodha and others, observed, "In my opinion, the allegations made in the complaint are not absurd and inherently improbable."

The detailed order, the copy of which is available now, has given a boost to the Birla family in their fight against Lodha for the control of the M P Birla group.

Rajinder Pansari, a close associate of Birlas, had filed a criminal complaint in October last year before the Sub Division Judicial Magistrate's (SDJM) court against Lodha, and three others alleging that a fraud was committed on Priyamvada Birla, who by a purported will had bequeathed the entire assets of M P Birla group to Lodha.

The complainant alleged that the entire assets of M P Birla group were meant for charity and had been vested with three trusts, which were irrevocable. But the trusts were revoked on April 15, 1999, after 20 years of their creation, and three days later the entire assets were willed away to Lodha.

While accepting the locus standi of Pansari, who was secretary of one of the trusts, Justice Sinha observed that a number of questions arose on a reading of the complaint including whether Lodha being a trustee could have allowed or consented to transfer properties vested to charity in his favour through the will.

The order also raised another question that, whether Lodha himself being the beneficiary of the impugned will, "could take all steps in the preparation of the will and also for calling the witnesses for execution and attestation as alleged."

These points and several others "can be answered by the trial court on the basis of evidence," Justice Sinha said.

The order also rejected Lodha's allegation that the complaint was filed due to personal vendetta and even rejected the plea for at least stay in the criminal proceedings until the probate application for legal authentication of purported will of Priyamvada Birla was disposed off.

Justice Sinha observed, "probate court cannot decide whether trusts were revocable or not or whether at least three of the five trusts were public charitable trusts and whether by converting the properties of charitable trusts to personal property of Priyamvada Birla and thereafter through impugned will handing over the properties of alleged charitable trusts to Lodha and his son constituted any criminal offence or not."

Lodha side had earlier submitted that all the trusts were revocable while Birlas maintained that they were irrevocable.

Justice Sinha also said in his order that the account books, audit reports, balance sheets and other papers of the three charitable institutions may be produced before the trial court along with the account book, audit reports etc of the M P Birla group to reveal whether any amount or fund was spent on charity.

The court gave this direction as Lodha side had submitted during arguments that the trusts were private and not charitable trusts, whereas the Birlas' argument was just opposite.