Case Details

  • Case name: Hindustan Medical Institution & Ors. vs. Birla Corporation Limited & Ors.
  • Court/Authority: Supreme Court of India, Civil Appellate Jurisdiction.
  • Case/Order No.: Civil Appeal No. … of 2026 (arising out of SLP (C) Nos. 1182 of 2023, 1183 of 2023, 23145 of 2022, 1185 of 2023, 1187 of 2023, 22799 of 2022).
  • Date of judgment: 26 May 2026.
  • Period of dispute: Voting rights for Birla Corp’s AGM held on 27‑09‑2022; resolutions dated 04‑03‑2021; earlier High Court orders dated 16‑09‑2022, 26‑09‑2022, 27‑09‑2022.

Parties Involved

  • Appellants/Petitioners: Hindustan Medical Institution, Eastern India Educational Institution, Belle Vue Clinic (all societies registered under the West Bengal Societies Registration Act, 1961) and Ms. Anamika Lodha (individual).
  • Respondent: Birla Corporation Limited (BCL).
  • Other parties: Administrators Pendente Lite Committee (APL Committee) appointed in the estate of the late Priyamvada Devi Birla; Judges Vikram Nath and Sandeep Mehta.

Issues / Allegations / Violations

1. Whether trustees of the societies must act in consonance (unanimously) under Section 48 of the Indian Trusts Act, 1882 and the precedent L. Janakirama Iyer.

2. Whether the governing bylaws permit the matter of voting authority to be approached as adopted by the Division Bench (treating Board of Trustees and Managing Committee as interchangeable).

3. Whether the direction that the vote cast first shall prevail, irrespective of the source of authority, is legally sustainable.

4. Dispute over exercise of voting rights attached to the societies’ shareholdings in BCL (9.30% for Hindustan Medical Institution, 4.36% for Eastern India Educational Institution, 0.23% for Belle Vue Clinic) for the AGM scheduled on 27‑09‑2022.

5. Alleged invalidation of votes by the scrutiniser on the basis of rival claims and counter‑claims.

Findings & Observations

  • Clause 24 of the societies’ bylaws expressly allows delegation of authority by a written resolution signed by the majority of trustees and treats such delegation as equally effective as a resolution passed at a meeting.
  • Section 48 of the Trusts Act requires unanimity only unless the governing instrument provides otherwise; the societies’ bylaws provide such an exception, making the majority‑backed resolution valid.
  • The Division Bench erred in applying a strict unanimity rule and in treating the Board of Trustees and Managing Committee as co‑equal for voting authority.
  • The Board of Trustees is the source of authority over the societies’ assets (including shareholdings); the Managing Committee can act only on powers expressly delegated by the trustees.
  • The direction giving primacy to the first‑cast vote substitutes chronology for authority and conflicts with Section 108 of the Companies Act, 2013, Rule 20 of the Companies (Management and Administration) Rules, 2014, and Birla Corp’s AGM notice, which require that a vote be cast by a duly authorised representative.
  • The statutory framework protects the first valid vote, not the first vote irrespective of authority.

Penalties / Settlements / Directions

  • The Supreme Court set aside the Division Bench’s common judgment and order dated 26‑09‑2022 (corrected 27‑09‑2022) and the Single Judge’s orders dated 16‑09‑2022.
  • The civil appeals of the three societies are allowed in full.
  • Ms. Anamika Lodha’s appeals are allowed in part – her challenge to the “first‑cast vote” direction is upheld; other aspects of her challenge are rejected.
  • No order as to costs was made.
  • An interim order dated 04‑01‑2023 stays the operation of the impugned judgment to the extent it required unanimity; it clarifies that a decision by the majority of trustees is binding.

Corrective Actions & Future Obligations

  • The suits and interlocutory applications arising from the societies’ disputes are restored to the file of the High Court.
  • The Single Judge of the High Court is directed to consider the matters afresh in accordance with the Supreme Court’s observations.
  • Parties must ensure that any vote cast on behalf of a non‑individual shareholder is supported by a board resolution or power of attorney that complies with the societies’ bylaws and the procedural requirements in Birla Corp’s AGM notice.
  • The scrutiniser must continue to verify the authority documents for non‑individual shareholders as per the notice dated 08‑08‑2022.

Final Ruling & Enforcement

  • Appeals of Hindustan Medical Institution, Eastern India Educational Institution, and Belle Vue Clinic are allowed.
  • Appeals of Ms. Anamika Lodha are allowed to the limited extent concerning the “first‑cast vote” direction; other claims are dismissed.
  • The impugned judgment and the orders dated 26‑09‑2022, 27‑09‑2022, and 16‑09‑2022 are set aside.
  • It is held that a majority‑backed written resolution under Clause 24 of the bylaws constitutes a valid decision or authorization for the societies.
  • The direction that the vote cast first shall prevail is declared unsustainable and set aside.
  • The High Court’s pending matters will proceed without the erroneous legal reasoning of the impugned judgment.
  • No costs awarded; any pending applications are disposed of.

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Judgment delivered by Justices Vikram Nath and Sandeep Mehta.