2012 (12) TMI 1200 - HC - Companies Law

Summary

Issues Involved:
1. Rectification of the share register u/s 111 of the Companies Act.
2. Validity of the succession certificate and Will.
3. Jurisdiction of the Company Law Board (CLB) in handling complex factual disputes.
4. Legal standing of the respondents to challenge the Will and succession certificate.

Summary:

1. Rectification of the Share Register u/s 111 of the Companies Act:

The appeals were directed against the CLB's order dated 16.03.2011, which dismissed the petition for rectification in the share register of several companies. The petitioners argued that the succession certificate issued on 19.02.2009 was conclusive evidence for rectification. The CLB's refusal to enter the petitioners' names despite notice led to the petition u/s 111 of the Companies Act. The CLB's finding that the shareholding could not be transferred due to pending objections to Maharani Gayatri Devi's Will was challenged.

2. Validity of the Succession Certificate and Will:

The petitioners contended that after Jagat Singh's death, his shareholding was to be divided equally among his legal heirs, as agreed and reflected in succession certificates. Gayatri Devi's Will dated 10.05.2009 further bequeathed her share to Dev Raj and Lalitya Kumari. The respondents argued that the succession certificate and the settlement recorded on 19.02.2009 were void due to a stay order from a higher court. They also questioned the validity of the Will, alleging it was forged and fabricated.

3. Jurisdiction of the CLB in Handling Complex Factual Disputes:

The respondents argued that the CLB rightly concluded that complicated questions of fact could not be addressed in a petition u/s 111 of the Companies Act. They cited pending litigations and disputes over shareholding titles. The petitioners countered that the succession certificate was conclusive evidence, and the CLB's refusal to rectify the share register was erroneous.

4. Legal Standing of the Respondents to Challenge the Will and Succession Certificate:

The court noted that the respondents, being cousins of Jagat Singh, lacked the locus standi to challenge the Will and the succession certificate. The legal standing to challenge the proceedings was excluded as they were not legal heirs but only legal representatives. The court emphasized that Gayatri Devi, having inherited a full estate under the Hindu Succession Act, was competent to dispose of it as she chose.

Judgment:

The court found that the CLB had committed an illegality in refusing to rectify the share register. The order dated 16.03.2011 was set aside, and the member register of the companies was ordered to be rectified in favor of Dev Raj and Lalitya Kumari. The appeals filed by the respondent group were dismissed as they lacked supporting documents for their claims. Costs were quantified at Rs. 25,000.

Conclusion:

The court upheld the petitioners' right to rectification of the share register based on the succession certificate and Will, dismissing the respondents' challenges due to lack of legal standing and supporting evidence.