Lalit-Bina Modi case: SC maintains stance; Asks to reconcile differences

Senior counsel Harish Salve and Mukul Rohatgi told a Bench led by Chief Justice NV Ramana that the mediation between mother and son has failed.

Lalit-Bina Modi case: SC maintains stance; Asks to reconcile differences
The apex court had last year in December asked the mother and son to try for mediation and had appointed its former judges — justices Vikramajit Sen and Kurian Joseph — as mediators to settle the family dispute.

The Supreme Court on Thursday reiterated that former IPL chairman Lalit Modi and his mother Bina Modi should reconcile their differences and come out with a solution to resolve the pending family dispute over a trust property named after Lalit’s father KK Modi.

In February 2021, while Lalit had initiated arbitration proceedings before the International Court of Arbitration of the International Cricket Council (ICC), which had determined Singapore as the place of arbitration, the mother and the two siblings — Charu Bharti and Samir — are opposing it because Trust matters cannot be settled through arbitration in a foreign country as per Indian laws. Last year, the SC refused to vacate the stay on the arbitration proceedings initiated by Lalit.

Senior counsel Harish Salve and Mukul Rohatgi told a Bench led by Chief Justice NV Ramana that the mediation between mother and son has failed. “None of the parties is interested in settling the matter… come out with a solution to resolve it. Both sides should be fair and none should take advantage of the other,” the CJI said during the hearing.

The apex court had last year in December asked the mother and son to try for mediation and had appointed its former judges — justices Vikramajit Sen and Kurian Joseph — as mediators to settle the family dispute.

The Bench on Thursday refrained from passing any orders even though Salve, appearing for Lalit, sought direction that his mother, who is the managing trustee of the KK Modi Trust, should not sell its assets without the court’s prior permission. However, senior counsel Kapil Sibal and Rohtagi, appearing for Bina, objected to the passing of any status quo order till Monday, the next date of the hearing.

Both Sibal and Rohtagi objected to Lalit’s execution of a power of attorney (PoA) for filing the appeal, saying no power of a trustee can be delegated to anyone like this. While Rohatgi argued that Lalit is seeking dissolution of the trust, which can not happen without the consent of all the trustees, Salve contended that the trust fund can be sold off even if not everyone is on-board with it.

Modi, who has been staying in London for the past several years after the Enforcement Directorate started a probe against him in India over money laundering allegations, had challenged a Delhi High Court judgment. It had the jurisdiction to decide his mother’s plea against the arbitration proceedings initiated by him in Singapore over a property dispute with her and two siblings. Samir is also fighting the case independently in the SC now.

Stating that “there is admittedly an arbitration clause in the Restated Trust Deed”, Lalit told the SC the disputes that have arisen after the death of the settler were not of the nature which cannot be settled by arbitration, and the Trust also owned immovable properties, and thus in the absence of the registration of the Restated Trust Deed, the provisions of the Indian Trusts Act 1882 do not apply.

He said the Restated Trust Deed of April 9, 2014, which was executed in London, stipulated that the assets, businesses and investments contributed and settled into trust were liable to sale and distribution if no unanimity was reached over control and management of the KK Modi family-controlled businesses within 30 days of the demise of KK Modi.

He contended that after the demise of his father on November 2, 2019, given the lack of unanimity among the trustees, a sale of all assets of the trust has been triggered and distribution to beneficiaries has to occur within one year thereof. He further alleged that his mother had not only excluded him from all entitlements under the Trust Fund but was also refusing to proceed with honouring the family arrangements.

It is the arbitrary tribunal that lacks jurisdiction and not this court, which has the inherent jurisdiction to determine whether the disputes are arbitrable, the HC division bench had held on December 24, remanding the two civil suits to the single judge for further proceedings. The single judge had earlier on March 3 last year dismissed pleas by Bina Modi, wife of late KK Modi, and her two other children against the initiation of arbitration proceedings in Singapore by her estranged son.

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