The Supreme Court on Monday appointed its former judge RV Raveendran to meditate between businessman Lalit Modi and his mother Bina Modi to resolve the pending family dispute over a trust property named after Lalit’s father, KK Modi.
This is the second time the apex court has asked them to reconcile their differences over the Trust’s assets, which have been the point of contention since KK Modi passed away in 2019. The court had last year in December asked the family to resolve their differences through mediation and had then appointed its former judges — justices Vikramajit Sen and Kurian Joseph — as mediators, but that round of mediation failed.
Lalit and his brother Samir are on one side fighting with Bina and their sister Charu on the other side. While the brothers are in favour of dissolving the Trust and splitting the proceeds after an auction of immovable assets and shares of the companies, Bina wants to carry out the valuation of the assets and pay both her sons an amount equivalent to 25% of the total value of the Trust.
A Bench led by Chief Justice NV Ramana, while sending the matter for mediation, also recorded the undertaking given by senior counsel Kapil Sibal and Mukul Rohatgi, appearing for Bina, that she would not dispose of any property of the Trust and would participate in the mediation with an “open mind”.
Senior counsel Harish Salve and AM Singhvi, appearing for Lalit, accused Bina of “unilaterally” running the Trust and of selling off its properties. The former IPL chairman also asked the apex court to appoint a pro tem trustee for the trust while the legal battle is going on and also restrain Bina, who is the managing trustee, from alienating trust properties.
Salve said that as per the Trust deed, the trustees are to meet once in six months for continuing the business, but there has been no meeting since November 2019. While Lalit had in February last year initiated arbitration proceedings before the International Court of Arbitration of the ICC, which had determined Singapore as the place of arbitration, the mother and the two siblings, Charu and Samir, are opposing it on the grounds that Trust matters cannot be settled through arbitration in a foreign country as per Indian laws.
Last year, the SC had refused to vacate the stay on the arbitration proceedings initiated by Lalit. Modi, who has been staying in London for 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 that said it had the jurisdiction to decide his mother’s plea against the arbitration proceedings initiated by him in Singapore.
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 contended that after the demise of his father on November 2, 2019, in view of 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 as per the Restated Trust Deed of April 9, 2014, which was executed in London.