Death Cases /will

In case of the death of a joint holder, the survivor(s) shall be the only person(s) recognized by the company as having title to his interest in the shares, a Will in favour of third person would be of no consequence – Pratik Chandrakant Khandhadiya Vs. Hindustan Unilever Ltd. – NCLT Mumbai Bench

Hon’ble NCLT Mumbai Bench held that a perusal of the Article 23 of Schedule I (Table F) of the Companies Act, 2013 reveals that it is divided into two parts. The first part deals with the death of a member where the member was a joint holder and the second part deals with the eventuality of death of the sole member. It further provides that in case of the death of a joint holder, the survivor or survivors shall be the only person (s) recognized by the company as having title to his interest in the shares. In case of the death of a sole member, his nominee, if any, or his legal representatives shall be recognized by the company as having title in his shares. Therefore, from the Article 23 of Schedule I (Table F) of the Companies Act, 2013, it is evident that since the Petitioner’s Mother held share jointly with him, the Petitioner would be the only person recognized by the Respondents for having a title to her interest in the shares being a survivor. Since the Petitioner’s Mother was not the sole holder of the shares, the will in favour of the sister of the Petitioner would be of no consequence.

In case of the death of a joint holder, the survivor(s) shall be the only person(s) recognized by the company as having title to his interest in the shares, a Will in favour of third person would be of no consequence – Pratik Chandrakant Khandhadiya Vs. Hindustan Unilever Ltd. – NCLT Mumbai Bench Read Post »

Transmission of Shares without obtaining a Succession Certificate cannot be sustained – Avanti Metals Pvt. Ltd. Vs. Alkesh Gupta – NCLAT Chennai

Hon’ble NCLAT held that:
(i) Transmission of shares on the basis of Will can raise complicated issues which require an evidence, to be read by the parties and need to be determined by a Court of Law.
(ii) If the probate proceedings are pending in a Civil Court, then the petition under the Companies Act for rectification of register would not be maintainable. Where there is a dispute as to the heirship of a deceased shareholder, the Company could refuse transfer of shares, until such dispute is resolved by a Competent Court of Law.
(iii) The Succession Certificate, specifies the debts and securities entitles a legal heirs not only to receive the Interest or Dividends but also to negotiate or transfer them.
(iv) From the Section 44 of the Companies Act, 2013, it is cleared that shares are construed as movable property governed by the Articles of Association of the Company and Article 8.15 mandates that a Succession Certificate is required for the transmission of the shares.
(v) The prayer of the first Respondent herein seeking transmission of Shares without even obtaining a Succession Certificate, cannot be sustained. This Tribunal is of the considered view that submission of a Succession Certificate, as provided for under the Articles of Association of the Appellant Company, is required for the transmission of shares of the deceased Member.

Transmission of Shares without obtaining a Succession Certificate cannot be sustained – Avanti Metals Pvt. Ltd. Vs. Alkesh Gupta – NCLAT Chennai Read Post »

Can a Company refuse to transmit share to legal heirs of the shareholder on the basis that ‘Will’ contains a condition to sell these shares to the Company? and Does NCLT have the jurisdiction or power to go into the matter of settlement, when considering a letter of intimation under Section 56 of the Companies Act, 2013 – Shanivi Construction Pvt. Ltd. Vs. Kaashvi Prasher & Ors. – NCLAT New Delhi

In this case, a ‘Will’ included a condition that legal heirs shall sell these shares to the Company and if the Company is not willing to purchase the said shares within five years, she would be free to sell the shares in the open market. On such basis, the Company refused to transmit the said shares in the name of legal heirs.
NCLAT held that:
(i) There was no need for the Company to have interpreted or acted upon the provisions included in the Will of Shareholder, since the intimation under section 56 of the Companies Act was merely about transmission of said shares and not about execution of Shareholder’s Will.
(ii) The settlement is not relevant when a letter of intimation under section 56 of the Companies Act, 2013 is under consideration. Moreover, the NCLT does not have the jurisdiction or power to go into the matter of settlement, when considering a letter of intimation under section 56 of the Companies Act, 2013.
(iii) The point in the Last Will of Shri Gagan Parasher that interest of a third party has been created vis-à-vis legal heirs, would be a matter to be decided by a court of appropriate jurisdiction and therefore, not an issue to be decided by NCLT when considering a case for transmission of shares.

Can a Company refuse to transmit share to legal heirs of the shareholder on the basis that ‘Will’ contains a condition to sell these shares to the Company? and Does NCLT have the jurisdiction or power to go into the matter of settlement, when considering a letter of intimation under Section 56 of the Companies Act, 2013 – Shanivi Construction Pvt. Ltd. Vs. Kaashvi Prasher & Ors. – NCLAT New Delhi Read Post »

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