Peerless Roys win 3-decade legal battle for control of 94-year conglomerate after Supreme Court ruling

Kolkata: The Roys of Peerless has won a three-decade long legal battle to retain the control over the 94-year conglomerate with business interests spanning financial services, healthcare, real estate and hospitality.

The Supreme Court on Tuesday dismissed a petition filed by Bhagwati Developers, a real estate company originally incorporated as Lodha Services, against the promoters of Peerless, bringing the curtains down to one of India’s longest corporate legal battles.

“After more than three decades, this judgment brings finality to a long chapter in the history of Peerless,” said Jayanta Roy, managing director at PGFI. The family holds about 66% in the company

Bhagwati Developers had pleaded against a verdict of the (NCLAT), which gave a verdict in favour of the Peerless promoters about five months back.

The matter pertains to a dispute in the transaction of shares between the two parties. In March 1987-88, Peerless General Finance & Investment Company (PGFI) took a board decision to strengthen its capital base through a private placement of 30,000 equity shares. The move coincided with transfer of 15,626 shares by Parasmal Lodha to certain entities linked to the Roy family. Lodha was an early investor in PGFI while he resigned from the board barely days ahead of the share sale.

Lodha had alleged that the transactions were designed to shift control of the company to the Roy family and involved misuse of funds.

On Tuesday, A Supreme Court bench of Justice P S Narasimha and Justice Alok Aradhe dismissed the petition filed by the Bhagwati Developers.

“We are grateful that the validity of the company’s decisions, taken in good faith and in the interests of the institution, has ultimately been upheld,” Roy said after the Court decision.

On April 16, this year, the National Company Law Appellate Tribunal (NCLAT), ruled in favour of the Roys saying it did not find any case of oppression or illegality in relation to the share allotment and transfer under challenge, setting aside an earlier order passed by the National Company Law Tribunal. The Kolkata bench of NCLT in July 2022 had ruled that the owners of these shares have to relinquish their holdings and return the dividend and other benefits accrued to them over these years to the company and to Lodha, as applicable. In its ruling, the NCLT had said that the purchase of company shares by the promoters from Lodha null and void. In 2022, Lodha held about 47% in PGFI while the holding subsecquently came down.