Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (10) TMI 265 - SUPREME COURT

2015 (10) TMI 265 - SUPREME COURT - TMI - Scope of power under Section 111 of the Companies Act, 1956 Rectification of share register - Transmission and transfer of shares on the basis of succession certificate, transfer deed and revalidation letter issued by the ROC High Court held that the succession certificate issued by the competent court had to be taken as conclusive evidence under Section 381 of the Indian Succession Act - Court had refused to grant any interim injunction in favour of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ad to be acted upon - DR Group followed the due procedure. 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. 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 in the context of correctness of the view taken in the impugned order passed by the High Court directing rectification at the instance of Respondent No.1-Rajkumar Devraj and Respondent No.2-Rajkumari Lalitya Kumari (the DR Group ), who are the son and daughter respectively o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

th April, 2009 in favour of DR Group. She also executed Will dated 10th May, 2009 in favour of DR Group. She died on 29th September, 2009. Vide letter dated 15th July, 2009, DR Group claimed transmission and transfer of shares in their favour on the basis of succession certificate dated 19th February, 2009 issued by the District and Sessions Judge, Jaipur (Civil), transfer deed dated 27th April, 2009 executed by their grand mother Gayitri Devi ( GD ) along with revalidation of the letter issued .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d no right of succession in view of Will dated 23rd June, 1996 and they were also not heirs of GD as LMJS was adopted in another family. Further stand was that since at the instance of GD, proceedings were stayed, succession certificate could not be granted even at her instance. Stay granted by the High Court was in a petition seeking consolidation of a probate case and succession certificate. Section 370 of Succession Act was also invoked. It was also submitted that the settlement which was the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d 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 hel .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion Case No.134/98 is a nullity? (ii) Whether a Will exists? (iii) Whether the alleged Will dated 23.06.1996 is required to be proved or disprove? (iv) Whether the probate proceedings in Case No.32/2006 could be dismissed/disposed of on the basis of a settlement between the private parties? (v) Whether probate proceedings exist as on date? (vi) Whether construction of the Will is required? (vii) Whether bar of Section 370 of the Indian Succession Act operates in the facts and circumstances of th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

te Maharaj Jagat Singh? (ii) If these petitions involve complicated questions of law and facts, whether these are maintainable before the CLB? To be precise, whether the CLB has jurisdiction in this matter or it is ousted on account of the competent court i.e. Civil Court having jurisdiction in this matter. (iii) In case, the CLB exercising its discretion proceeds to decide the entitlement to shareholding attracting the provisions of sub-section (7) of Section 111, is the CLB competent to decide .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s not necessary for anybody who objects to that order, to apply to set it aside, he can only rely on its invalidity when it 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 unenfor .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

(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 Devraj & Lalitya, the estate of Late Maharaj Jagat Singh devolve upon Rajkumari Urvashi, Maharaj Prithviraj Singh, Maharaj Jai Singh and Maharaja Bhawani Singh whose case is based on adoption of Late Mahara .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d the nature of the allegations made by the parties as mentioned above and applying the ratio of the decisions mentioned above, I am of the view that such disputed and complicated questions of law and facts cannot be decided by the CLB in the summary jurisdiction under Section 111 of the Act. Such questions which are involved in the present case can be decided before the Civil Court on the basis of the oral and documentary evidence adduced by the parties in support of their respective cases. The .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

by the UD Group. The operative part of the order passed by the High Court is as follows : 38. Having considered carefully, the facts of the present case and the nature of the allegations made by the respondents, it is clear that the alleged disputes raised by the respondent group in so far as the rectification issue is concerned are all illusory. Admittedly these shares were in the name of Jagat Singh who had bequeathed them to his mother Maharani Gayatri Devi and she in terms of a settlement a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

1 of the Indian Succession Act. The plea that the succession certificate dated 19th February, 2009 was in violation of stay order dated 20th August, 2008 was rejected. It was observed that stay order was passed at the instance of GD herself whose statement itself was the basis of the order dated 19th February, 2009. Writ Petition No.7524 of 2008 wherein order dated 20th August, 2008 was passed itself was got disposed of as infructuous on 18th January, 2011 in view of order dated 19th February, 2 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

DR Group but only against the estranged wife of the testator. The GD who was the legatee herself bequeathed her rights in favour of the DR Group by duly signing the transfer deeds and communicating the same to the Board of Directors. She also executed Will dated 10th May, 2009. Mere fact that the same had been challenged was no bar to the claim of the DR Group. 10. We have heard S/Shri H.P. Rawal, Sanjiv Sen, learned senior counsel for the Companies, Shri Vikas Singh, learned senior counsel for .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Services Ltd. 2006 (6) SCC 94, Luxmi Tea Company Limited vs. Pradip Kumar Sarkar 1989 Supp. (2) SCC 656 and Bajaj Auto Ltd. vs. N.K. Firodia 1970 (2) SCC 550, 557. Further submission is that succession certificate was void on account of interim order passed by the 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. Ja .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ificate 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 jurisdiction to decide a question of title. Apar .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

iction as well as the scope of controversy between the parties. The High Court rightly allowed their appeal. Apart from relying upon the judgment in Ammonia (supra), reliance was also placed on judgment of Calcutta High Court by Ruma Pal, J. (as she then was) in Nupur Mitra vs. Basubani Pvt. Ltd. 1999 (2) Calcutta Law Times 264. 14. We have given due consideration to the rival submissions. The main question for consideration is whether there is any real dispute between the parties about the enti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eld that the UD Group had no prima facie case. The said order was required to be acted upon subject to any further order that may be passed in any pending proceedings between the parties. There is no conflicting order of any court or authority. There is thus, no complicated question of title. Moreover, there is no bar to adjudication for purposes of transfer of shares unless the court finds otherwise. The stay order obtained by GD herself could not debar her from making a statement to settle the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ly 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 ad .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

thin line in appreciating the scope of jurisdiction of the Company Court/Company Law Board. The jurisdiction is exclusive if the matter truly relates to rectification but if the issue is alien to rectification, such matter may not be within the exclusive jurisdiction of the Company Court/Company Law Board. 18. In Standard Chartered Bank (supra), scope of Section 111(7) was considered. It was observed that jurisdiction being summary in nature, a seriously disputed question of title could be left .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion with such an application. It has been held in Ammonia Supplies Corpn. (P) Ltd. v. Modern Plastic Containers (P) Ltd. that the jurisdiction exercised by the Company Court under Section 155 of the Companies Act, 1956 (corresponding to Section 111 of the present Act, before its amendment by Act 31 of 1988) was somewhat summary in nature and that if a seriously disputed question of title arose, the Company Court should relegate the parties to a suit, which was the more appropriate remedy for inv .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version