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TMI Blog2015 (10) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... e. It had the succession certificate in its favour apart from the transfer deed from GD, who admittedly inherited rights from LMJS. Will in favour of GD is beyond any dispute. Thus, the DR Group derived rights from the GD by documents executed by her in her lifetime and conveyed to the Company. Even if the Will of GD is not taken into account, for purposes of issue of rectification, the documents executed by GD clearly entitled the DR Group to have the rectification made - CLB had no justification to reject the claim of the DR Group and the High Court rightly reversed the said order – Decided against appellant. - CIVIL APPEAL NO.7914 to 7916 OF 2015 (ARISING OUT OF SLP (CIVIL) NO.4384 OF 2013, 4903 OF 2013, 13752 OF 2013, 13756 OF 2013, 14309 OF 2013, 14322 OF 2013) - - - Dated:- 23-9-2015 - Anil R. Dave and Adarsh Kumar Goel, JJ. For the Petitioner : Mr. Partha Sil For the Respondent : Ms. Meera Mathur JUDGMENT Adarsh Kumar Goel, J. 1. Leave granted. The question raised in these appeals relates to the scope of power under Section 111 of the Companies Act, 1956, to direct rectification in the share register of a company. The question has to be examined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hvi Raj and Jai Singh also sought transfer of shares in their favour claiming as heirs of GD. It was submitted that GD could not enter into any settlement contrary to the Will dated 23rd June, 1996. Further contention was that she died intestate on 29th September, 2009 and that DG has been disinherited by LMJS in his Will dated 23rd June, 1996. 4. Suit No.32 of 2010 was also filed by the UD Group before the District Judge, Jaipur, raising the dispute of succession to the estate of GD. In the said suit, CMA No.20 of 2010 was filed under Order XXXIX Rules 1 and 2 CPC, for temporary injunction. The application was dismissed by detailed order dated 28th July, 2011. In the said application, all the issues raised by the UD Group were examined prima facie, including validity of succession certificate dated 19th February, 2009. The Court on considering the rival submissions held : In such condition seeing the said entire facts and circumstances and the documents submitted no prima facie case is made out by the applicants for stopping the implementation of the order dated 19.02.2009 passed in S.A. No.134 of 1998 by the Learned District Judge, Jaipur till the disposal of the suit. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is set up against him, although he has not taken steps to set it aside, such order cannot give rise to any right whatever not even to a right to appeal, it can give rise to no rights and impose no obligations, the same can be ignored as nullity, that is, non-existent in the eye of law and it is not necessary to set it aside? (v) Whether the order dated 19.02.2009 is unenforceable due to the bar of Section 370 of the Indian Succession Act, 1925 for granting Succession Certificate in the presence of the Will? (vi) Can in view of Section 381 of the Succession Act, the Succession Certificate granted jointly in the name of the Rajmata and two grand children be operative after the demise of the Rajmata? (vii) Can the probate proceedings in case No.327/06 be dismissed on the basis of a settlement between private parties? (viii)Can probate proceedings decide entitlement? (ix) Whether the CLB shall proceed to decide whether in the face of the alleged Will disinheriting Devraj Lalitya, Late Rajmata can directly or indirectly still make them entitle to the estate of Late Maharaj Jagat Singh? (x) Whether in the presence of the alleged Will disinheriting D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the cousins of Jagat Singh are not even claiming as legal heirs of Jagat Singh but only in their capacity of his legal representatives; these allegations do not in any manner affect the title of the shareholding of Jagat Singh. There is no involvement of any fraud or forgery. Petition under Section 111 of the Companies Act was well maintainable. 39. The CLB returning a finding opposite has committed an illegality which is liable to be set aside. It is accordingly set aside. The order dated 16.3.2011 is set aside; the member register of the companies be rectified in the name of the petitioner group and the petitioners i.e. Dev Raj and Lalitya Kumari be substituted in lieu of Jagat Singh. 40. As noted Supra, the appeals filed by the respondent group are infructuous; they have supported the order of the CLB, their prayer in the appeal that the shares register be rectified in their favour as necessarily to be dismissed as even as per their own statement, they do not have any document to support their submission that they are entitled to the rectification of the member register qua these shares of Jagat Singh in their favour. 9. Thus, the High Court held that the suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he High Court dated 20th August, 2008. Reliance has been placed on Mulraj vs. Murti Raghonathji Maharaj (1967) 3 SCR 84, Manohar Lal vs. Ugrasen 2010 (11) SCC 557 , Ajudh Raj vs. Moti 1991 (3) SCC 136 and Chiranjila Shrilal Goenka vs. Jasjit Singh 1993 (2) SCC 507. 12. It was also submitted that DR Group could not inherit the rights of LMJS in view of the language of the Will dated 23rd June, 1996 and also on the ground that the Will executed by GD was under challenge. In absence of the said Will, DR Group could not acquire any rights as UD Group was entitled to inherit the estate of GD. 13. Per contra, Shri Sundaram supported the view taken by the High Court. His submission is that there is no real dispute. The succession certificate in favour of DR Group has to be acted upon especially when in the suit filed by the UD Group, interim order has been declined and it has been found that there was no prima facie case in challenge to the said certificate. Pendency of suit without there being any interim order in favour of the UD Group in respect of succession to the estate of the GD was of no consequence. The scope of power under Section 111(7) of the Companies Act included juris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, it was held that jurisdiction under Section 155 was summary in nature. If for reasons of complexity or otherwise, the matter could be more conveniently decided in a suit, the Court may relegate the parties to such remedy. Subject to the said limitation, jurisdiction to deal with such matter is exclusively with the Company Court. It was observed : 31. ..It cannot be doubted that in spite of exclusiveness to decide all matters pertaining to the rectification it has to act within the said four corners and adjudication of such matters cannot be doubted to be summary in nature. So, whenever a question is raised the court has to adjudicate on the facts and circumstances of each case. If it truly is rectification, all matters raised in that connection should be decided by the court under Section 155 and if it finds adjudication of any matter not falling under it, it may direct a party to get his right adjudicated by a civil court. Unless jurisdiction is expressly or implicitly barred under a statute, for violation or redress of any such right the civil court would have jurisdiction. .. 17. Thus, there is a thin line in appreciating the scope of jurisdiction of the Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra) are of no relevance to a situation where the beneficiary of the interim order itself opts to proceed with the matter in respect of which stay is granted by higher Court. In the present case, GD having settled the matter and having herself sought rectification, the interim order granted at her instance could be no bar against the DR Group. The decisions sought are thus, of no relevance to such a situation. 22. We sum up our conclusions as follows : (i) LMJS executed will in favour of his mother GD which is not in dispute; (ii) GD and DR jointly obtained succession certificate; (iii) GD signed the transfer deeds and communicated the same to the Board of Directors; and (iv) The civil court vide order dated 28th July, 1991 declined to grant temporary injunction finding no prima facie case against the succession certificate. 23. In above circumstances, even in summary jurisdiction, the CLB had no justification to reject the claim of the DR Group. The High Court rightly reversed the said order. 24. In view of the above, we find no merit in these appeals. The same are dismissed with costs quantified at ₹ 5 lakhs in each of the appeals. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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