9911796707
TMI Blog1996 (1) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... of his death he was holding 50 equity shares of Rs. 100 each and 20 5% Income-tax free preference shares of Rs. 100 each of the respondent company. It appears that he left a will and in pursuance thereof, Mrs. Silvanti K. Israni, wife of deceased, addressed a letter, dated 24.8.72 to the respondent company for transmission of the shares held by her late husband to her name. The respondent company vide its letter, dated 29.9.72 asked her to obtain a succession certificate from a court of law determining the heirs of the deceased and the shares of each of them in his estate and on receipt of the same, the matter will be considered. It appears that Mrs. Silvanti K. Israni died without obtaining the succession certificate for the shares in que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the shares and the value as indicated by them was Rs. 7,500 and further pointed out that it was therefore necessary to approach appropriate court showing the correct present market value and it was also pointed out that the company has sub-divided the shares into Rs. 10 each and also issued bonus shares in the ratio of five equity shares for every one equity share held and the appellant, therefore, required to obtain succession certificate for the 48,000 equity shares showing the correct market value which was then approximately Rs. 1,000 per share. It is further submitted that the company has no intention to decline any valid transmission application, but it was only questioning the defects in the said application arising from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany desires to challenge the issuance of the succession certificate, the same has to be done by adopting appropriate proceedings in the court issuing the certificate and not by way of withholding the transmission of the said shares pursuant to the said succession certificate. The appellant has also submitted that there is no limitation prescribed for making an application for succession certificate and any person can make application for succession certificate, if he is legally entitled to do so at any time when issue arises for obtaining the succession certificate. 4. During the course of hearing, the advocate appearing for the appellant invited attention to the provision of Section 381 of the Indian Succession Act and submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the shares standing in the name of his father in the company's records and there was no order or decree of any court restraining the company from registering transmission of shares. 5. We have considered the various averments made at the time of hearing. The questions for consideration are (i) whether this is a case of refusal of transmission of shares and appeal lies in the matter ; (ii) whether the appellant is right in obtaining the succession certificate in respect of 40 equity shares and 20 preference shares ; and (iii) whether the company is right in questioning the succession certificate on the basis of insufficient court fees stamps. From the facts available, it is clear that the appellant has forwarded the succession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; however, it is noted that the company has not produced any Board resolution wherein the Board has considered the matter of transmission of shares. The company in its letter, dated 13.9.94 has stated as under : You may approach us after obtaining the said succession certificate alongwith all the share certificates in your possession. In our opinion, this statement amounts to refusal and the appellant has rightly filed the present appeal for remedy available under law. Hence, we hold that the appeal is maintainable. There is no merit in company's contention in this regard. 6. The second question for consideration is whether the appellant has rightly obtained the succession certificate in respect of 50 equity shares and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company is justified in not acting on the succession certificate issued by the competent court on account of insufficient court fees stamp. In this regard, we are of the view that it is for the court to satisfy about the payment of proper court fees, and if court fees paid is insufficient, the recovery of deficit court fees alongwith penalty is to be decided by the authority of the court or revenue authority and it is not open for the respondent company to withhold the transmission of shares in the name of the appellant on this ground, once the succession certificate has been produced from the competent court who has declared the appellant as legal heir for the shares in question, and there is no other claimant for the said shares ; the com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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