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TMI Blog2020 (2) TMI 1375X X X X Extracts X X X X X X X X Extracts X X X X ..... documents as asked by them. It is not the case of the Respondent that any rival is received in respect of impugned transmission of shares. Normally succession certificate is required to be produced when such succession is in dispute and not supported by relevant evidence. In order to avoid any further litigation on the issue, the Petitioner also sought permission from the Tribunal to cause paper notification in English Newspaper The Hindu and in Kannada Newspaper Udayavani . The contentions of the Respondent that the instant Petition is premature as there is no rejection of claim of the Petitioners is without basis. The Petitioners time and again requesting the Company to effect transmission of shares in question by producing all requisite documents as mentioned supra. The other objections raised by the Respondents, for rejecting the case of Petitioners, are baseless and liable to be rejected and thus hereby rejected. Petitioners are entitled for transmission of shares of Mr. Mondal for 5000 equity shares of R-1 Company, basing on the documents already submitted - Application allowed. - C.P.No.196/BB/2019 - - - Dated:- 26-2-2020 - Hon'ble Shri Rajeswara Rao Vit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deal with his assets. (4) It is stated that on 20.01.2017, the Petitioner No. 1 received an email from the Company along with -c.ertain documents to facilitate the transmission of shares held by late Mr. Mondal in the Company to the Petitioners. Similar mails followed on 02.02.2017 and 09.04.2017. This clearly establishes that the Respondents recognized and acknowledged the Petitioner's rights over the shares held by late Mr. Mondal. Subsequently, on 12.07.2017, the Petitioner No. 1 received an email from Respondent No.2 requesting for execution of certain documents to facilitate the transmission of shares to the Petitioners. Upon perusal of the attached documents, the Petitioner No. 1 noted that the document was a Share Transfer Form (Form SH-4) for the transfer of the shares to Respondent No.2. Thereafter, the Petitioners have repeatedly requested the Respondents to transmit the shares to their names. Instead of complying with their request, the Reepondent No. 1 acting under the control and at the behest of. Respondent No.2, has raised certain frivolous and untenable grounds to deny transmission of shares to the Petitioners. (5) The Petitioners have also been denied ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uperficial and the Respondents are not legally obliged to honour the same. (3) It is stated that Paragraph 15 of the Article of Association states that on the death of a Member, the survivor of survivors where the Member is a joint holder and his legal representatives, where he was sole holder, shall be the only person whom the Compa.ny may recognize as having any title to or interest in the shares. No share in the Company shall be transferred unless and until the right pre-emption shall have been exhausted. The Board of Directors of the Company have never expressly or impliedly recognized the Petitioners as the only legal heir or Legal Representative of Late Mr. Mondale The Petitioners cannot construct a presumption by disarrangement of the facts in a way that would serve their own interest in an unjust manner. The intention of the Respondents cannot be gathered in absence of any express communication made to the Petitioners acknowledging them as Members. The Respondent has also been insisting upon the production of probate and appropriate legal heir certificates, the Petitioners have failed to produce the same. Just because the Petitioners have been asked to produce probate do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any Directors of the Respondent No. 1 in favour of the Petitioners and, thus, it has no legal sanction or relevance. Normally, even by virtue of being the only legal heir, such person is not entitled to become a Member of the Company unless substantiated and backed by requisite documents prescribed to the satisfaction of the Board of Directors because the Company has an absolute discretion to refuse to accept any receiver as its Member and unless the receiver is so expressly accepted, he/ she does not become a member of the Company. It will be extremely absurd to suggest that a Company is bound to recognize a person as its Member simply because one of its Directors sent a document for perusal and in absence of any evidence from such person to prove their right of inheritance, There lies no doubt that the Petitioners are not entitled to become Member merely by virtue of an unexecuted instrument of transmission, which has not even been signed by anyone from the Board of Directors. Therefore, no acknowledgment can be inferred as well. (7) It is further stated that through Reply dated 14.03.2018 sent by Respondents, through their Counsel, it was clearly informed to the Petitioners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w and grant the request of Petitioners simply because they represent themselves in a particular manner. (9) On perusal of the language of the provisions as mentioned in Section 58 of the Companies Act, 2013, it becomes clear that if a Company refuses transmission of shares by operation of law, it shall within a period of 30 days from the date on which the intimation of such transmission, as the case may be, was delivered to the Company, send notice of the refusal to the Transferor and the Transferee or to the person giving intimation of such transmission, as the case may be, giving reasons for such refusal. This is, however, not the present case, as the Company has never refused in a strict sense for the said transmission all it has done is to ask about the inheritance certificate that they failed to produce. The above application/ petition is premature and non-maintainable. On this ground alone the above application/ petition is liable to be rejected. (10) The Section, further, confers a right on such Transferee to prefer an Appeal before the NCLT against the refusal within a period of 30 days from the date of receipt of the notice or in case no notice has been sent by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt No 1 Company. By recognising the first Petitioner as legal heir of Mr. Mondal, the first Petitioner and second Respondent executed Memberships in Interest Purchase Agreement dated 20.12.2016 purchasing entire share of deceased. The Petitioner has placed email dated 20.01.2017 wherein the Petitioner was asked to submit Letter of Indemnity, Letter of No-Objection, Application for Transmission of Shares/ Debentures and Surety Bond. Accordingly, the Petitioner No. 1 filed an affidavit dated 01.04.2017 duly notarised by declaring that the first and second Petitioners are wife and daughter of late Mr. Mondal. 8. In continuation of the issue, the Counsel for the Petitioner also addressed a legal notice dated 16.02.2019 again sending Shares Transmission Application Form along with the requisite documents, duly signed and stamped for transmission of the shares of deceased Mr. Mondal. Subsequently, there is a lot of correspondence in respect of the issue in question, but to no avail. 9. It is true, that the shares of the Company is under the control of Board of Directors of the Company. However, the Board of Directors of the Company cannot exercise their powers in an arbitrary manne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es for the same. It is stated that nobody has come to oppose the claim of the Petitioners. 11. The contentions of the Respondent that the instant Petition is premature as there is no rejection of claim of the Petitioners is without basis. The Petitioners time and again requesting the Company to effect transmission of shares in question by producing all requisite documents as mentioned supra. The other objections raised by the Respondents, as briefly stated supra, for rejecting the case of Petitioners, are baseless and liable to be rejected and thus hereby rejected. 12. In order to ensure latest documents to be produced in support of the case, Mr. Manu Kulkurni, learned Counsel for the Petitioner was asked to submit once again latest documents. Accordingly, the learned Counsel filed Memo dated 25.02.2020, (which is taken on record), which reads as under: The Applicants, presently residing in California, United States of America, have, in light of the urgency in the captioned matter, duly appointed Mrs. Reksha Katdare (mother ofApplicant No. 1 and grandmother ofApplicant No.2) wh.o is resident in Pune, India to act as their Attorney and to sign and execute all document ..... 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