9911796707
TMI Blog2000 (2) TMI 853X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner being the only daughter of the deceased, claiming herself to be his sole legal heir, requested the company in January, 1995, to transmit all the shares held by her father to her. The company informed her that her father held 511 shares in the company and accordingly transferred those shares in the name of the petitioner and sent her the relevant share certificates. The balance of 660 shares were not transferred in her favour. In the meanwhile, on May 18, 1994, the company allotted further 1,800 shares out of which none was allotted to the petitioner. In 1996, the petitioner filed a petition for grant of succession certificate. The father of the petitioner had divorced his wife--the mother of the petitioner some time in the middle of 1970s. After the divorce, he was reportedly living with the third respondent who is one of the directors of the company. According to the respondents, due to his love and affection towards the third respondent, the deceased had, through a will, bequeathed all his immovable and movable properties including his holding in the company to her. The alleged will came to surface in 1997, after which the third respondent filed a petition for a pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her shareholding. If it is so, then, the company has not been able to produce any transfer instrument by which the transfer of these 660 shares was effected. He submitted that after discussions with the respondents, they had, in a board meeting held on September 3, 1996 (exhibit N), resolved to transfer these 660 shares in the name of the petitioner. Yet, the transfer was not effected in her name. In regard to the pending proceedings relating to probate and succession certificate, learned counsel pointed out that the instant petition before the Company Law Board was filed in December, 1996, while the probate petition was filed only in May, 1997. Therefore, the company cannot take the stand that in view of the probate proceedings, the transfer could not be effected. Further, even the alleged will surfaced only in 1997, while the father of the petitioner expired as early as in 1993. Even otherwise, he submitted that the probate proceedings cannot stand in the way of the company transferring the impugned shares to the petitioner. Relying on Ganshamdoss Narayandoss v. Gulab Bi Bhai 50 ILR 927, he submitted that till a probate is obtained, no reliance in defence can be taken on the wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned. He also pointed out that even though the petitioner had initiated proceedings for succession certificate prior in time to the filing of the petition, the fact of the same has not been disclosed in the petition. Therefore, he contended that there was no default on the part of the company in this regard. He further submitted that the Company Law Board has been taking a consistent stand that it would not encourage parallel proceedings and, therefore, this petition should be stayed till the outcome of the other proceedings is known. In regard to the decision in Ganshamdoss Narayandoss v. Gulab Bi Bhai [1927] 50 ILR 927 ; AIR 1927 Mad 1054, by the Madras High Court, he submitted that this decision only lays down the position of law that in the case of a will, there should be probate/letter of administration and does not lay down the law that the legal heir would be entitled to the property of the deceased. He further submitted that even the action of the company to have transmitted 511 shares cannot be considered to be in order in view of the contesting claims. Therefore, he submitted that the Company Law Board should not pass any order in regard to the 660 shares and it should sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n June 10, 1994, it would indicate that the share certificates were with the company. If it is so, then, the share certificates in respect of the remaining 660 shares also should have been with the company. The company/respondents have not been able to satisfy us as to why they informed the petitioner that the deceased had only 511 shares and sent the share certificates only in respect of these shares. When the company/the respondents admit the holding of the deceased as 1,171 shares, we do not find any reason as to why all these shares had not been transmitted in favour of the petitioner when the company admitted that she was the sole legal heir. In the case of transfer/transmission of shares, a company is to follow the provisions of the articles. This company has adopted the provisions of Table A. As per regulation 26(1) of Table A, the Board is empowered to call for production of such evidence as may be required by the Board before registration of transmission. In this case, the Board had, without any reservation transmitted 511 shares in favour of the petitioner since they were aware that the petitioner was the sole heir of the deceased. On this day, there were no proceedings p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings relating to succession certificate are concerned, the company has recognised the petitioner as the sole heir by transferring 511 shares. Further we note that there is no order of injunction against the transmission in favour of the petitioner. Thus on no ground, the company is justified in denying the transmission of all the shares held by the deceased to the petitioner. Therefore, we direct the company to transmit the 660 shares in favour of the petitioner. Since the company has taken a stand that the share certificates have been lost, on the authority of this order, the company will issue duplicate certificate in respect of 660 shares after recording her name in the register of members, within 30 days from the date of this order. We also stipulate that the right to hold the shares by the petitioner will be subject to the outcome of the two pending proceedings. 8. As far as the additional allotment of shares is concerned, without going into the bona fides or otherwise of this issue, in view of the statement made by counsel for the respondents that the company would be willing to allot 600 shares to the petitioner at par, we direct the company to allot 600 shares to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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