The Delhi Court on Tuesday directed Bina Modi, the chairperson and managing director of the KK Modi group, to recommend her son Samir Modi to the Nomination and Remuneration Committee (NRC) as a prospective candidate for the directorship of the Godfrey Philips.
However, the court held that Samir Modi could not perpetually continue as a director without following the due course specified in the Companies Act. According to the rules, NRC of the company is required to conduct an independent evaluation of all the potential candidates.
“…the defendant number one (Bina Modi) is directed that she being the managing trustee of the KK Modi Family Trust holding 47% shares in the defendant No. 4 company (Godfrey Philips), shall recommend the name of the Plaintiff (Samir Modi) for appointment as director to the Nomination and Remuneration Committee of the defendant No. 4 company, who may take appropriate decision as per the mandates of companies act and the trust imposed on them by the company,” the order stated.
The order also directed Bina Modi not to take any steps to “defeat the candidature” of Samir Modi in case he is recommended by the NRC and approved by the board of directors and put for voting before the annual general meeting of the company.
On June 27, the court restrained Bina Modi from ousting Samir Modi from the board amid a dispute between the mother and the son. In the same order, the court restrained Bina and Godfrey from closing down the retail division chain '24seven'. The court said removal from the board and the closure of the retail chain could prima facie cause 'irreparable harm' to Samir Modi.
However, this was an ex-parte injunction as per the June 27 order, which has been vacated.
The court also lifted the ex-parte injunction on the closure of 24Seven, a retail business owned by the group. The injunction was imposed based on a plea by Samir Modi. The court added that the company cannot be restricted to continuing the retail business division or if it wishes to exit the same.
“As far as the retail division of the defendant No. 4 (Godfrey Philips) company is concerned, as the defendant No. 4 is not a signatory of the Restated Deed of Trust and the right of continuation of the said business is stated to have arisen from the said Restated Deed of Trust, defendant No. 4 cannot be injuncted to continue the retail business division if its wishes to close the same,” as per the order.
The company announced the exit of retail business 24Seven in April 2024.
As Samir Modi is to retire by rotation in the annual General meeting to be held before September 2024, he is eligible for the appointment and has been continuously being reappointed since 1994 first as a director and then as a whole-time director.
In early June, Samir accused his mother of orchestrating a physical assault on him during a recent board meeting.
According to Samir's complaint lodged with the Delhi Police, he was forcibly prevented from participating in the meeting by his mother's security personnel, resulting in grievous injuries. He has filed a complaint in the Magistrate Court in Delhi.
Against Samir Modi, four directors (part of the audit committee) of Godfrey Philips have filed a defamation case which is also ongoing.
This feud is an ongoing legal battle over the family’s Rs 11,000-crore empire.
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