The Supreme Court (SC) on Monday made a fresh attempt to resolve the long-running inheritance dispute within the Kalyani family by appointing former Supreme Court judge justice L Nageswara Rao as mediator to facilitate talks between Bharat Forge Ltd's chairman Baba Kalyani and his sister Sugandha Hiremath over family assets estimated to be worth more than ₹1 lakh crore.
A bench comprising chief justice of India Surya Kant, justice Joymalya Bagchi and justice V Mohana persuaded the estranged siblings to make one final effort to settle their differences amicably instead of continuing with multiple legal battles pending across courts.
"We request justice Nageswara Rao to act as a mediator," the bench ordered.
Senior counsel appearing for both sides assured the Court that they would immediately contact justice Rao so that the mediation process could commence from Tuesday.
The apex court posted the matter for further hearing after two weeks.
In the meantime, the SC directed the Bombay High Court not to proceed with Mr Kalyani's application seeking rejection of the civil suit filed by Ms Hiremath under Order VII Rule 11 of the Code of Civil Procedure, effectively pausing the proceedings while mediation is underway.
The proceedings arose from a Bombay High Court order in May refusing to refer the dispute to mediation after noting that Mr Kalyani had not agreed to the proposal and that mediation under the Mediation Act, 2023, cannot be imposed on an unwilling party.
Before the Supreme Court, senior counsel representing Mr Kalyani opposed another attempt at mediation, pointing out that three earlier efforts, including before the Supreme Court and a Pune district court, had not succeeded.
The bench, however, urged the family to make one more sincere effort.
Addressing Mr Kalyani's counsel, chief justice Surya Kant observed, "You may have said no to mediation earlier, but when court no1 of the Supreme Court requests, will you not heed to it? Mediation can be successful when stalwarts from either side step in and help in the same."
Justice Joymalya Bagchi added that "there cannot be a hostile approach to mediation."
Expressing optimism that a settlement remained possible, the chief justice remarked, "Sometimes ego is more than the assets. I am sure mediation will succeed."
The bench also narrated an instance of mediation involving another business family, where a dispute was resolved after several unsuccessful rounds of negotiations, describing mediation as capable of achieving results even after repeated failures.
Dispute Centres on 1994 Family Arrangement
The litigation traces its origins to a suit filed by Ms Hiremath and her husband Jaidev Hiremath before the Bombay High Court in 2023.
They have sought specific performance of what they describe as a family arrangement reached in June 1994 between Mr Kalyani and his father Neelkanth Annappa Kalyani.
According to the Hiremath family, the arrangement required shares held by Kalyani family-controlled entities in listed specialty chemicals company Hikal Ltd to be transferred to Ms Hiremath.
At present, entities controlled by the Hiremath family hold around 34.84% of Hikal, while Kalyani Investment Company Ltd and BF Investment Ltd together own about 34.01%.
The Hiremath family contends that implementation of the alleged 1994 arrangement would raise their holding to nearly 68.85%, giving them majority voting rights in the company.
Mr Kalyani has disputed the existence of any legally enforceable agreement requiring such transfer of shares. He has also challenged the interpretation placed by the Hiremath family on a handwritten note prepared by Neelkanth Kalyani after a family meeting in 1994.
The dispute over Hikal forms only one part of a much larger family conflict involving Baba Kalyani, Sugandha Hiremath, their brother Gaurishankar Kalyani and members of the next generation of the family.
The broader litigation concerns claims made by the Hiremath family that the Kalyani family's businesses and assets constitute a Hindu undivided family (HUF) estate.
The properties claimed include promoter holdings in listed companies such as Bharat Forge and Kalyani Steels, stakes in private companies, land, real estate, jewellery, bank deposits and other movable and immovable assets.
Ms Hiremath's children, Sameer Hiremath and Pallavi Swadi, have separately filed partition suits claiming coparcenary rights in the alleged Kalyani family HUF.
The Kalyani side has consistently denied the existence of any such HUF, maintaining that the businesses and assets are individually owned and are not available for partition.
Several connected proceedings relating to partition, property and probate disputes are currently pending before courts in Mumbai, Pune, Wai and Karad.
The family dispute has also begun affecting corporate decision-making.
Recently, the Kalyani faction abstained from voting on a shareholder resolution concerning the appointment of an independent director on the board of Hikal. Although the resolution was ultimately approved, the abstention highlighted ongoing differences among the promoter groups.
The Supreme Court's intervention is the latest judicial effort to encourage an out-of-court settlement in one of India's most closely watched business-family disputes. While the mediation process will proceed under the supervision of justice Nageswara Rao, the Court has made it clear that no party can be compelled to settle and that any resolution must be arrived at voluntarily.
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