To make sure the talks aren’t harmed, the Supreme Court has told both sides in the Kapur family trust disagreement not to do anything that might ruin the mediation process. They’ve specifically told Raghuvanshi Investment Pvt Ltd not to add new independent directors or change who is allowed to sign for the company’s bank accounts at their board meeting on May 18th.
Court shields mediation, pauses boardroom moves
Justices J B Pardiwala and Ujjal Bhuyan are pushing for Rani Kapur and Priya Kapur to reach a friendly agreement regarding control of the RK Family Trust. The justices cautioned that if they can’t come to an agreement, there will be a lengthy, difficult legal battle, and the family’s money will be at risk.
After hearing a request from 80-year-old Rani Kapur, the court suggested that controversial changes to how things are run should be postponed. They said they will see how the mediation is going before deciding on what to do next, and have set a date of August 6th to review the case.
RBI compliance claim meets judicial caution
Rani Kapur complained about a notice for a May 18th meeting at Raghuvanshi Investment Pvt Ltd, a company with a large ownership share in the main Kapur group. The plan for the meeting, as it’s been reported, was to appoint two independent directors and to change the authorized people for the company’s bank accounts.
Priya Kapur’s lawyer and the company’s lawyer said the meeting plan follows the rules for Non-Banking Financial Companies as set by the Reserve Bank of India and shouldn’t be a problem. However, the court asked everyone to keep things as they are, protecting the mediation, instead of pushing through changes to how the company is governed right now.
The court made a significant temporary decision, saying that the Reserve Bank of India’s rules and other legal requirements don’t need to be strictly followed by the authorities for now. The point was simple: don’t let technicalities interrupt the negotiations.
What the mediator will navigate
On May and to show how important it is, the court appointed former Chief Justice of India D Y Chandrachud as the mediator to lead the discussions. They urged both parties to really try to find common ground in the mediation, and not go into it with a negative attitude.
Rani Kapur claims the RK Family Trust was created in October 2017 using fake, altered, and fraudulent paperwork, and that family properties were moved into the trust. She’s asking the Supreme Court to declare the trust invalid.
Timeline of recent orders
On April 27th, the Supreme Court asked Priya Kapur and others to respond to Rani Kapur’s complaint about the trust. At the same time, a similar case relating to the estate and the trust’s assets is with the Delhi High Court, and someone there has asked for the current situation with the trust’s properties to remain unchanged.
The court repeated on Thursday that the mediation should continue without being interrupted. They also said the topics of independent directors and bank account signers should not be discussed at the May 18th meeting, and scheduled the case to be looked at again on August 6th.
Why the stakes are rising
Raghuvanshi Investment Pvt Ltd has a large ownership share connected to the estate of the late businessman. Changes to who is on the board or who controls the banking could give one side an advantage during the mediation. The court is trying to stop that from happening.
The court also thought about the people involved. They mentioned Rani Kapur’s age and how much the long-lasting argument is upsetting her, and again said a practical solution is better than arguing over procedure.
For now, both sides in the argument are stopped from making any of the disputed changes to how the company is run, until the mediator is making progress. By saying that talking to each other is more important than making quick changes to the boardroom, the court has shown what they expect the parties to do.
For clarity, here are the court’s near-term expectations as reflected in Thursday’s hearing:
– No steps that directly affect mediation
– No new independent directors on May 18
– No change to authorised signatories
– Regulators to ease compliance insistence for now
More generally, things are sad. Sunjay Kapur died on June t2th after falling ill during a polo match in England; he had a heart attack. Now, on top of that loss, there’s a serious fight over how the company is run, and the court wants to solve it without causing even more problems for the family business.
What happens next will depend on how well the mediation with D Y Chandrachud goes. If there’s clear progress, the court might continue to protect the discussions. If not, the court’s warning about a ‘long drawn battle’ might be what happens when the case is reviewed again on August 6th.
