For the two grandchildren of the late Rajmata Gayatri Devi of Jaipur—Devraj Singh and Lalitya Kumari, the Bangkok-based inheritors of the properties worth several thousand crores—it was virtually a bolt from the blue. They were looking forward to taking control of the Jai Mahal Palace, a majestic hotel whose ownership they got after a prolonged legal battle against their step-uncle, Prithviraj, and his son, when the National Company Law Appellate Tribunal (NCLAT) in mid-March threw a spanner in the works. It set aside the 2018 orders of the National Company Law Tribunal (NCLT) that gave them majority stakes in Jai Mahal Palace Hotels.
Acting on appeals filed by Jai Mahal Hotels Pvt Ltd, Vijit Singh (Director), Rambagh Palace Hotel Pvt Ltd, the NCLAT set aside the NCLT order. The appellate tribunal found that, as per the orders of the High Court and Supreme Court, the Rajmata was the sole legatee according to the will dated June 23, 1996 of her only son, Maharaja Jagat Singh. Rajmata Gayatri Devi consented to a joint settlement for the shares of Maharaja Jagat Singh which were in her name to be distributed to the grandchildren Devraj and Lalitya and as per the settlement succession certificates were issued.
While setting aside the NCLT order, the appellate court said: “Gayatri Devi on the death of her son Jagat Singh on February 5, 1996, became his sole legatee by ‘Will’ on June 23, 1996. Therefore, Devraj Singh and Lalitya Kumari cannot claim inheritance on original 5,050 shares to be legal heirs of late Jagat Singh on his death on February 5, 1997. Also they cannot claim for the additional shares of the company.”
The order further said: “Once the claim of Devraj Singh and Lalitya Kumari on the total original 5,050 shares of Jagat Singh are determined by the High Court and Supreme Court based on ‘Will’ in favour of Gayatri Devi, and legatee herself bequeathed her rights in favour of the grandchildren, they cannot claim their rights on such shares by way of inheritance on the death of their father Jagat Singh.”
The appellate court also observed that the National Company Law Tribunal failed to understand the facts and its various aspects and wrongly held that Devraj Singh and Lalitya Kumari inherited the shares of Jagat Singh on his death.
“The judgment of the NCLAT is perverse and has caused a gross miscarriage of justice. We would be challenging the judgment before the Supreme Court by filing statutory appeals,” said Abhishek Kumar Rao, the lawyer of Devraj Singh and Lalitya Kumari. He asserted that the so-called will of late Jagat Singh was always in dispute. “The will was fabricated by Prithviraj to create a dispute between Gayatri Devi and the grandchildren. Gayatri Devi in her lifetime herself abandoned the will and withdrew the probate proceeding of the disputed will.”
In view of the fact that the disputed will of Jagat Singh was abandoned by the Rajmata in her lifetime and that she joined her grandchildren Devraj and Laitya Kumari for grant of succession certificates in their favour and therefore there was no dispute between them anymore regarding the will of Jagat Singh, the Supreme Court had observed that the will is not “in dispute”.
However, the above observation of the Supreme Court has been completely misread by the NCLAT in coming to the conclusion that the Supreme Court held that the will of Jagat Singh was “undisputed” and further that “Gayatri Devi became absolute legatee and legal heir of Jagat Singh”.
The NCLAT has also ignored the finding of the Supreme Court and the High Court that the two companies—Jai Mahal and Rambagh Palace Hotel—were bound by the succession certificates granted to Devraj and Lalitya Kumari.
Devraj Singh and Lalitya Kumari now plan to approach the Supreme Court against the appellate court’s order.
Order upended
The Delhi bench of NCLT in August 2018 allowed the son and daughter of the late prince of Jaipur Jagat Singh their dues that were constantly denied by their step-uncle Prithviraj and his son Vijit Singh. The Jai Mahal Palace, which was the private property of Maharaja Sawai Man Singh of Jaipur, was bequeathed by way of a gift deed to his fourth son Jagat Singh on May 5, 1956, and it remained an exclusive property of Jagat Singh. In 1981, Jagat Singh decided to give the palace to the Tata’s Indian Hotel Co Ltd to be run as a hotel.
Jagat Singh, the exclusive owner of Jai Mahal, constituted a firm and held 5,050 equity shares or 99 percent of the share capital as his individual shareholding strength.
Out of the remaining 50 equity shares, only 45 equity shares were held by Prithviraj and the remaining by his son Vijit Singh.
Jagat Singh divorced his wife, a Thai princess Priyanandana Rangsit, and their minor children Devraj Singh and Lalitya Kumari stayed with their mother in Thailand, while Jagat Singh lived in London.
The affairs of the company were looked after by Prithviraj as Jagat Singh was living in London. After the demise of Jagat Singh in 1997, Prithviraj took full control of the company that owned the palace.
He had just one percent shareholding but virtually ousted Devraj and Lalitya, denying them their rightful ownership to the shares as well as denying them an opportunity to participate in the affairs of the company by insisting on a succession certificate with a view to delaying the succession to the property of their father.
Both Devraj and Lalitya were denied representation in the management of the company though their father had 99 percent shareholding. Prithviraj, who had just one percent had enjoyed the control of the company that owned Jai Mahal Hotel through manipulation. The NCLT also observed that Prithviraj conspired to convert their shareholding of 99 percent into a minority.
The Tribunal ordered that all the resolutions passed in the meetings of the board of directors be set aside. It also restored the board of directors’ strength to the status quo prevailing upon the death of Jagat Singh.
The Tribunal also ordered that the board should be constituted with Devraj Singh and Lalitya Kumari.