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1996 (1) TMI 483 - Board - Companies Law
Issues:
- Refusal of transmission of shares - Validity of succession certificate - Justification for questioning succession certificate on the basis of insufficient court fees stamps Analysis: 1. The appellant filed an appeal under Section 111 of the Companies Act, 1956, seeking rectification of the register of members maintained by the respondent company for the transmission of shares held by the deceased to the appellant's name. The respondent company requested a succession certificate, which the appellant obtained in his favor. The company, however, raised concerns about the market value of the shares and the need for an amended succession certificate. The appellant argued that the company had no right to question the validity of the succession certificate once issued by a competent court. The company contended that the appellant failed to account for bonus shares and the correct market value in the succession certificate. 2. During the hearing, the appellant's advocate referenced Section 381 of the Indian Succession Act, emphasizing that once a succession certificate is issued, the claimant's right is recognized. The appellant relied on legal precedents to support the argument that the company should not question the succession certificate's validity based on insufficient court fees or market value discrepancies. The appellant highlighted cases where courts ruled in favor of claimants based on valid succession certificates without additional requirements like probate or letters of administration. 3. The Board considered the arguments presented and addressed three main questions: (i) whether the case involved refusal of transmission of shares, (ii) the validity of the succession certificate obtained by the appellant, and (iii) the justification for the company's concerns regarding insufficient court fees stamps on the succession certificate. The Board found that the company's request for a fresh succession certificate due to market value discrepancies amounted to a refusal of transmission, making the appeal valid. The Board also determined that the appellant's succession certificate covered all shares in question, including bonus shares, and that the company had no grounds to withhold transmission based on court fees issues. 4. Consequently, the Board, in accordance with the Companies Act, 1956, directed the respondent company to effect the transmission of shares from the deceased to the appellant within a specified timeframe. The Board's decision was based on the appellant's valid succession certificate and the lack of legal grounds for the company to delay or refuse the transmission process.
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