Pune court issues notice to Baba Kalyani Gaurishankar in partition suit by sister Sugandha Hiremath

A civil court in Pune has issued a notice to Babasaheb Kalyani, the billionaire promoter of the Kalyani Group, and his brother Gaurishankar Kalyani, in connection with a partition suit filed by their sister, Sugandha Hiremath. 

The suit seeks a third of the Kalyani family’s assets, including shares in listed companies such as Bharat Forge and Kalyani Steels, as well as private assets such as land, real estate and jewellery.

On Wednesday, Hiremath petitioned for the appointment of a court receiver to manage all promoter shares of Kalyani Group companies until the suit is resolved.

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She argued that her brothers, Baba Kalyani and Gaurishankar Kalyani, control the family wealth and have been selling, transferring, and alienating these assets. If this practice continues, she contends, no wealth will remain for rightful distribution.

In her petition, Hiremath claimed that she recently discovered the existence of a Kalyani Hindu Undivided Family (HUF) that funded the creation of the Kalyani Group businesses, including the flagship Bharat Forge. The Kalyani HUF has reportedly existed since the time of their grandfather, Annappa Narayan Kalyani.

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The suit also points out that the Kalyani family’s wealth is spread across more than 250 companies, including several listed entities such as Bharat Forge, Kalyani Forge and Kalyani Steels. 

Hiremath claims a third of these assets belong to the Kalyani HUF, which she asserts entitles her to a third of the total family wealth, valued at over ₹70,000 crore based on the market capitalization of the listed Kalyani Group companies.

The civil judge S.S. Shinde observed that considering the relations between the parties, the nature of suit and properties involved, it was proper to first issue notice to the other side before passing any order.

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“I do not think it proper to pass any ex-parte interim injunction order against defendants without hearing them. Hence, issue show cause notice to the defendants as to why temporary injunction order should not be passed against them”, the judge recorded in the order.

This legal battle is not the first for Hiremath. In 2012, she filed a suit against her late father, Neelkanth Kalyani, and her brother Babasaheb, seeking to be made a co-parcener of the Neelkanth Annappa Kalyani (NAK) HUF, which she was initially led to believe was the only HUF in the family.

In March 2023, Sugandha and her husband, Jaidev Hiremath, moved the Bombay High Court against Babasaheb Kalyani, seeking specific performance of a 1994 family agreement, which required the transfer of shares in Hikal from the Kalyani Group to Sugandha.

Responding to Mint‘s email, Sugandha Hiremath expressed her faith in the judiciary. “We have full faith in judiciary and we are confident that truth will prevail. The family assets need to be protected till the pendency of the suit, before they are alienated by both my brothers, as has been the case all these years”, she said.

“Papers in the new suit have not been served upon us, as such it is premature to comment on the particulars. However, the new Suit appears to be a second bite at the cherry as Sugandha has been unsuccessful in all her previous claims against us. We shall appropriately defend the new Suit,” a spokesperson for Kalyani Group said in a statement.

Currently, the Hiremath family holds around a 34% stake in Hikal and are co-promoters of the company. Babasaheb Kalyani controls another 34% through two listed firms—Kalyani Investment Company and BF Investment.

Interestingly, Hiremath’s petition marks a significant shift in her stance on the existence of the Kalyani HUF. Previously, in a written statement to a 2014 suit filed by Sheetal Kalyani in the same court, Hiremath had claimed that the NAK HUF was the sole HUF within the Kalyani family.

However, in her petition filed on 28 September, she has asserted that she was misled by her brother Babasaheb into believing the NAK HUF was the only HUF within the family. She was under the impression that the only assets of the NAK HUF were a property in Yerawada, Pune.

Upon further investigation, Hiremath claims to have discovered that the Kalyani family HUF has been in existence since the time of her grandfather, Annappa Narayan Kalyani, and that it holds ancestral properties and funds.

Hiremath further alleges that it was only after Babasaheb’s attempt to “usurp” Hikal from her family that she realized his intentions were not aligned with the interests of the broader family. 

The root of the conflict lies in a family agreement involving Hikal, which was made public in January. 

According to the agreement, Babasaheb Kalyani was supposed to transfer Hikal shares to Sugandha Hiremath. However, when the Kalyani Group’s holding firms attempted to increase their stake in Hikal in 2023, the Hiremath family saw this as an attempt to wrest control of the company from them, leading them to seek legal intervention in the Bombay High Court.

What started as a family disagreement has since escalated into a bitter legal battle, with multiple suits and counter-suits being filed. Gaurishankar Kalyani, the younger sibling of Babasaheb and Sugandha, has also approached the Pune Civil Court, seeking the implementation of a will left by their late mother, Sulochana Kirloskar, who passed away in 2023.