THE GOLDEN SPARROW ON SATURDAY OCTOBER 24, 2015
PUNE
David Vs Golia plays out in the Kalyani family T
BY YOGESH SADHWANI @yogeshsadhwani
here’s trouble brewing in one of the wealthiest families in Pune. Sheetal Kalyani, 27, granddaughter of the pioneer of forging industry, Dr Neelkanth Kalyani, has filed a case seeking partition of the family assets. The suit filed in Pune Civil Court, Senior Division is against nine members of Kalyani family and 174 business entities run by the family. The 27-year-old has alleged that her uncle Baba Kalyani has usurped several family assets. The suit filed in November 2014 is up for hearing on November 5, 2015. Those against whom Sheetal has filed the suit include her father Gaurishankar, mother Rohini, brother Viraj, uncle Baba Kalyani, cousin Amit and his wife Deeksha, aunt Sunita, grandmother Sulochana and aunt Sugandha Hiremath. While seeking 1/9th share in the family properties, she has sought partition of wealth acquired and invested in various companies including Bharat Forge, a USD 2.5 billion conglomerate. FAMILY WEALTH The suit begins with explaining how her great grandfather Rao Saheb Anappa N Kalyani carried on business as a trader and agriculturist and amassed huge wealth. He and his family formed a Hindu Undivided Family (HUF) known as ANK HUF. “The entire property amassed by Late Rao Saheb Anappa N Kalyani was the property of ANK HUF,” states the petition. After his death in 1954, his son Dr Neelkanth Kalyani took over as head or Karta of ANK HUF. “Dr Neelkanth Kalyani further set up and started businesses by using and utilising funds of the joint family which formed the nucleus for further expansion of businesses started by him and flourished by him,” states the petition, adding that Dr Neelkanth Kalyani started NAK HUF, a smaller entity within ANK HUF over a period of time. Sheetal, in her suit, states that after Dr Neelkanth’s death in August 2013, Baba Kalyani “is purporting to hold himself out as the Karta of the NAK HUF”. SHARE IN THE PIE Sheetal states that family funds held by the HUFs were used to set up businesses, acquire properties, buy jewellery, among others. “There is nucleus and nexus between joint family funds and properties. The plaintiff (Sheetal) as a member of the NAK HUF, joint family, has pre-existing right, title and share in all these joint family properties,” she states. BUSINESSES The petition details how over the years using funds from the two HUFs several businesses were started including Bharat Forge, and have now prospered. She has sought her share in the businesses. “Over the course of time, using funds of NAK HUF or income derived from businesses formed and commenced out of the funds, companies and other entities were acquired and formed in the names of members of the said HUFs or companies under their control,” the suit states. Sheetal has listed 174 such businesses entities in the petition. TRUSTS Sheetal’s petition also lists several trusts that were set up from family wealth and now own several properties. “The late Dr Neelkanth settled various private trusts out of the joint family funds. The said trusts purchased various properties,” states the petition which has listed out names of multiple trusts set up from family funds. Sheetal wants a share of this pie too. JEWELLERY “Various ornaments and jewellery were purchased out of the joint family funds… The plaintiff (Sheetal) does not have details presently,” states the petition, adding that once she has the details of the jewellery acquired from family funds, she will list them for partition.
Sheetal Kalyani, 27, has sought her share of the family assets and has filed a case against the entire Kalyani clan, including her own parents as well as her uncle Baba Kalyani, one among the country’s wealthiest businessman said to be worth USD 2.3 Billion
FUNDS GIVEN TO AUNT The petition states that family funds were given to Sugandha Hiremath (Dr Neelkanth’s daughter) to start Hikal Limited. “The late Dr Neelkanth and Sulochana (his wife) also gave cash and jewellery belonging to the joint family and various immoveable properties to Sugandha Hiremath out of the joint family funds. Therefore, the said company and all its assets and properties are joint family property in which also the plaintiff (Sheetal) has a share,” states the petition. STARTED DIGGING AFTER RETURNING TO INDIA Sheetal has stated that from August 2006 to May 2010 she was abroad pursing her studies. She would come to India only for short durations during holidays. After returning to India, sometime in 2011 she came across several litigations involving family members and started digging further. She claims she found out that several assets and investments owned by joint family had been transferred to her uncle Baba Kalyani and his family members. Around the time that the assets and investments were transferred, the petition states, Sheetal and her brother Viraj were minors. “The plaintiff (Sheetal), who was a minor at the time, was not represented at all and the plaintiff’s share in the assets and properties of the HUF has been ignored completely and now the plaintiff has realised that there has been an attempt to exclude the plaintiff from these assets and properties... The plaintiff was and is entitled to a proper, just and equitable distribution of assets and properties of NAK HUF and to be allotted the said assets and/or an amount equivalent to the value thereof according to her share therein,” she states in the petition.
UNCLE WALKED AWAY WITH MAJOR CHUNK Sheetal, who holds a bachelor’s degree in Business Management and majored in Economics from Pennsylvania State University, states that she went through several documents and records after returning home. She claims that shares of several companies including Bharat Forge and Kalyani Steels Limited, held by NAK HUF were transferred to her uncle Baba Kalyani. “It appears that various assets belonging to the NAK HUF were transferred to Baba Kalyani and his family members without any legal and valid partition of the NAK HUF. Upon perusal of the records in respect of the two major companies controlled by the family, namely Bharat Forge and Kalyani Steels Limited, it appears that the promoters’ shareholdings were held by the NAK HUF through various holding companies. This promoters’ shareholding of Kalyani Steels Limited appears to have been transferred to Defendant No 2 (Baba Kalyani) and his family members. This transfer does not give any right to any of the transferee as against the joint family. No consideration has been received by the NAK HUF for such alleged transfer. Such alleged transfers are sham and bogus and not binding upon the NAK HUF or the members thereof,” states the petition. “The plaintiff is also informed and verily believes that a record has been created to reflect that the late Dr Neelkanth Kalyani sold some shares of Bharat Forge Limited, which were owned by the NAK HUF through some holding companies, to some financial institutions whose shareholding was acquired by Defendant No 2 (Baba Kalyani) through Kalyani Steels Limited, using funds of the joint family or entities controlled by the joint family, to show as if now these shares belong to him. This was part of a scheme by Defendant No 2 (Baba Kalyani) to attempt to create records that the shares belonging to the NAK HUF in fact belonged to him. After gaining control of Kalyani Steels Limited, Defendant No 2 (Baba Kalyani) used the funds from Kalyani Steels Limited to increase his shareholding in and get control of Bharat Forge Limited as well. As these are flagship companies of the Kalyani family, Defendant No 2 (Baba Kalyani) took control of a vast majority of the family assets to the detriment of the rights of the plaintiff (Sheetal) attempting to illegally take away the asserts and properties from the NAK HUF. Once again this appears to be a part of the scheme devised by Defendant No 2 (Baba Kalyani) to strip of the NAK HUF assets to the detriment of the plaintiff,” the petition states. She further states that when shares of two flagship companies Bharat Forge Limited and Kalyani Steels Limited were transferred to Baba Kalyani, his wife Sunita and son Amit, she and her brother Viraj were minors.
in direct conflict with the interests of NAK HUF,” she states in the petition. PARTITION SOUGHT EARLIER The petition states that in February 2014 Sheetal and her brother Viraj sought partition of the family wealth. They sent letters to all the family members through their advocates seeking partition. A few days later, their grandmother Sulochana Kalyani and aunt Sugandha Hiremath responded. “The letters are vague and evasive,” states the petition. Sulochana Kalyani responded to Sheetal and Viraj’s notice on February 26, 2014. She stated that all the documents and accounts pertaining to companies, assets, trusts, among others started by her husband Neelkanth Kalyani, are in possession of their mother Rohini Kalyani. “Send all those documents and accounts to me immediately. Only after examining them, will I be able to respond to your notice,” the letter written by Sulochana Kalyani in Marathi stated, adding that most of the points raised by the siblings in the notice are wrong. Sugandha Hiremath’s lawyers Malvi Ranchoddas & Co. too responded to the notice. “We are taking instructions in the matter and revert further thereafter. In the meanwhile, none of the allegations or contentions of your clients are admitted by our client.” In July 2014, the siblings sent another letter to the family members. Only their parents Gaurishankar Kalyani and Rohini responded, asking them to go ahead and file a partition suit and that their letter was to be treated as consent.
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APPOINT A RECEIVER ascendants or any a The petition seeks appointment of a receiver to take charge of senior most male m the family wealth till the partition is decided. Sheetal states that her family members are not rendering accounts of the possessions. terms he can also “They are earning huge amounts by using and utilising the joint family properties and businesses. It is therefore just and convenient this account a co to appoint a receiver to collect and receive all rents, profits out of lands member can and businesses, so that at the end the suit property will remain under the control of the Court,” the petition states. will be h MATTER YET TO BE DECIDED The case is being heard by Pune Civil Court, Senior Division. It has come up for hearing after being filed in November 2014. Other members of the Kalyani family and business enterprises involved have filed their replies to before the court. The case will come up for hearing next on November 5. yogesh.sadhwani@goldensparrow.com
GRANDMOTHER ALSO INVOLVED Sheetal alleges that her grandmother too had a role in depriving her of her share. “Defendant No 2 (Baba Kalyani) in collusion and conspiracy with Defendant No 1 (Sulochana Kalyani, grandmother) and Defendants No 3 to 5 (aunt Sunita, cousin Amit and his wife Deeksha) purported to take wrongful control of the family assets and business,” states the petition. DECISIONS FOR FAMILY PROPERTIES TAKEN IN ISOLATION Sheetal, in the petition, has claimed that most decisions pertaining to family wealth are taken in isolation by her uncle. She states that on July 22, 2011, her father Gaurishankar Kalyani received a letter signed by Baba Kalyani and Sugandha Hiremath, informing him about a meeting to be held a day later. The agenda was to “discuss and finalise various issues of the HUF properties and its management and administration”. However, Sheetal claims that she and her brother were never informed though they are members of the family. Moreover, she alleges that the meeting was called by her uncle, grandmother and aunt, knowing well that her father would not be able to make it. BABA KALYANI HAS NO RIGHT TO BE KARTA Sheetal has claimed that her uncle has no right to take place of her grandfather as head of the HUF. “He has usurped HUF properties and his interests are
MARRIED 1975
PRAYERS Sheetal has sought a partition of family wealth and asked for her 1/9th share. “A partition may kindly be effected by metes and bounds and/or in specie and actual possession of the share of the plaintiff may be kindly given,” the petition states. She adds that if there are agricultural properties, they should be divided by a Collector. Moreover, as for the properties being enjoyed by other family members, Sheetal has sought either her share A Hindu Undiv or the value of the same to be paid to her. Hindu Law as a She has also expressed fears about other members alienating properties owned by the family. “The conduct of the Defendants lineally descended in transferring the NAK HUF assets and properties between themselves without any partition is malafide and with an wives and unmarrie intention to deprive the plaintiff (Sheetal) of her legal rights. a HUF does not com The Defendants are likely to further transfer or deal with the NAK HUF properties in their possession or control in person in such familie a manner prejudicial to the interest of the plaintiff and the of people who do not NAK HUF,” states the petition. She has sought that her family is restrained from transferring any of the properties with a c till the case is decided.
DISCLOSE PROPERTIES There are many properties belonging to NAK HUF which Sheetal claims to be unaware of. She has stated that other members of the Kalyani family area aware of all such assets. “It is necessary that Defendants are ordered to disclose on oath all the assets of the NAK HUF and give account for the same and bring them to the NAK HUF partition,” Sheetal states in the petition.
Dr Baba N Kalyani
Amit B Kalya BNK’s
Sheetal G Kalyani