The two business families of Bharat Forge’s managing director Baba Kalyani and his sister Sugandha Hiremath are likely to resolve their bitter ongoing dispute over multi-billion dollar assets controlled by the Kalyani family trust through a court-monitored mediation.
A Pune civil court on Monday asked the two families to settle their disputes via a mediation process after Sugandha’s children asked for it, soon after filing a rejoinder, alleging Baba Kalyani of “perjury” and claiming that most of the current businesses under the Kalyani Group have been built with the help of assets that were originally created by Baba Kalyani and Sugandha’s grandfather AN Kalyani over five decades ago.
On Monday, Sameer Hiremath and his sister Pallavi Swadi requested the court to allow mediation with their uncle.
Baba Kalyani’s counsel Amit Agashe opposed to hold truce talks with Hiremaths, but later the court accepted the Hiremath siblings’ request for mediation.
As per the mediation rules, the two families may be given 60 days to settle their disputes through a mediation that will be monitored by a special court-appointed committee, said a person aware of the dispute.
Mint has reviewed a copy of the documents filed by the Hiremath family against the Kalyanis.
In response to an affidavit filed on 6 May by Baba Kalyani’s family, Sugandha’s children Sameer Hiremath and Pallavi Swadi, on Monday, produced a document that revealed the existence of a trust by the name “ANK HUF”.
Earlier, Baba Kalyani, who ranked as the 55th richest Indian, above Ajay Piramal and Pawan Munjal of Hero MotoCorp, as per Forbes in 2023, had denied the existence of any such trust and had argued that the Hiremath sibling can neither claim rights in the wealth of any Kalyani Family HUF or demand any partition of such trust since the Hiremaths and Kalyanis do not have any common “male” ancestor.
The Kalyani family had said this after Sameer and Pallavi had approached the Pune civil court seeking partition of Kalyani family HUF. Baba Kalyani, in May, had filed a reply to the court denying the very existence of any family HUF.
During the court hearing, the Hiremaths said that the Kalyani Group and family have several listed and unlisted companies under their flagship, with the Kalyani Group alone having a market capitalization of about ₹91,000 crore, of which ₹43,000 crore is the value of the shares held by the promoters, which are predominantly associated with the Kalyanis.
The two families, which were earlier fighting over ownership of shares in Hiremath-promoted pharmaceuticals firm Hikal Ltd., have expanded their dispute to include assets of Kalyani Group companies including Bharat Forge, Kalyani Steel, BF Investments, BF Utilities, Kalyani Investments, and Automotive Axles.
The siblings denied Baba Kalyani’s earlier claims that he has built industries and companies with his own personal investments.
“Every single investment made in a company or in an industry is evidently out of the nucleus of funds generated by the Kalyani Family HUF (which originates from the joint family of which ANK was the karta),” said the latest court filing by the siblings.
“All the assets, businesses, funds and investments of the joint family of which ANK was the Karta, constituted the nucleus of the said joint family. It is from this nucleus and funds of the joint family that other investments were made and businesses were started, either by ANK or later on by NA Kalyani,” said the Hiremath siblings.
A Kalyani Group spokesperson said, “Having filed a frivolous suit before the Pune local court seeking partition of alleged properties of Kalyani family HUF, both Sameer Hiremath and Pallavi Swadi have now sought permission of the hon’ble court to permit mediation of the dispute. The proposal to mediate in the pending dispute itself demonstrates that both have no cause of action in filing the partition suit. Both petitioners have been indulging in making malicious attempts to defame certain named family members.”
On Monday, Sameer and Pallavi also argued that their great grandfather A Narayan Kalyani (ANK) was not a “pauper” as was claimed by their uncle Baba Kalyani in the 6 May affidavit.
The Hiremath siblings stated in their rejoinder that Kalyanis “lied under oath” by making several ‘false statements’.
Baba Kalyani had earlier claimed that his grandfather AN Kalyani was not a wealthy man and earned a mere ₹2 salary per month, adding that he gave only ₹2 lakh at the time of his death in 1954, to his son Neelkanth A. Kalyani (Baba and Sugandha’s father).
To this, the Hiremath siblings argued with quoted excerpts from the book of their grandfather Neelkanth Kalyani, stating that AN Kalyani left behind a fortune for his family, a running business worth ₹20 lakh besides land and house property.
“My father had left me a legacy of ₹20 lakhs in cash besides the landed property. I had invested major portion of the money in trust and my range for investment in industry was to the tune of ₹5-10 lakhs. A lakh was quite a big amount in those days and in ₹20 lakh our four generations could have lived happily without doing anything. But I was possessed by an urge to do something different…” says the excerpts from the book, cited by Pallavi and Sameer.
Sameer and Pallavi also held Baba Kalyani’s claims about transfer of wealth among the ancestors to be false, while citing several partial partitions deeds that were executed over the years to establish the existence of a family HUF (which was refuted by Baba Kalyani earlier).
“…The partial partition deeds dated 1 March 1974 and dated 26 January 1979 also show that assets forming part of the ANK HUF ranging from the equity shares of companies like Kirloskar Tractor Ltd. to immovable properties and various financial investments,” said the rejoinder.
The Hiremath family has demanded that the Kalyani family be prohibited from dealing in any properties, assets and shares owned by the family till the time the “suit is decided” by the court.
In their latest rejoinder, the Hiremath siblings have again argued that they have the legal right to claim their portion of wealth from the assets of the Kalyani Family HUF by virtue of an amendment made in the Hindu Succession Act in 2005, which granted coparcenary rights to daughters.
“The applicants (Hiremath siblings) became coparceners in their own right in the Kalyani Family HUF upon the introduction of the amended Section 6 of the Hindu Succession Act 1956, in the year 2005,” says the rejoinder.
The rejoinder argues that Baba Kalyani’s claims that the Hiremath siblings do not belong to the Kalyani family are a “classic example of the fact that even when the law has been amended to confer rights on women, it is the mindset of the society which cannot accept such rights of the daughters and their children and still deprives them of their rightful share in the property.”
The Hiremath siblings blamed Baba Kalyani’s dealings with family assets as authoritarian and opaque.
The two families began fighting last year after Baba Kalyani refused to transfer Hikal shares, worth over ₹1,300 crore in her name. The dispute worsened after Sameer and Pallavi, in March, filed a petition against Kalyani, his son Amit Kalyani, brother Gaurishankar Kalyani, Gaurishankar’s children Sheetal Kalyani and Viraj Kalyani, and their mother Sugandha Hiremath in the Pune court.
The petition demanded a partitioning of the assets and businesses under the Kalyani Family HUF, which allegedly owned significant stakes in large companies and substantial real estate assets, especially in Pune, Karad and Satara districts in Maharashtra.