Pratikhsha Lakhani vs Pratik Khandaniya & Ors.

Per: Justice Rakesh Kumar Jain:

This appeal is filed under Section 421 of the Companies Act, 2013 (in short ‘the Act’) against the order dated 23.06.2023 passed by the National Company Law Tribunal, Mumbai Bench, Court No. II) (in short ‘Tribunal’) by which I.A. No. 158 of 2022 filed by the Appellant seeking permission to intervene in CP No. 35/MB/2022 as an intervenor and to file reply to the petition has been dismissed.

In short, the Appellant is the real sister of Respondent No. 1. They are natural heir of their mother Mrs. Niranjana Khandhadiya (since deceased). Their mother and Respondent No. 1 jointly held shares of Respondent No. 2 (Hindustan Unilever Limited). Their mother expired on 10.01.2021 but left behind a registered will dated 25.12.2019 and bequeathed all her movable and immovable properties to the Appellant (daughter) as alleged. It is alleged that her brother (Respondent No. 1), without informing her, transferred to his name 4880 shares of Respondent No. 2 in the demat account of the deceased mother with the HDFC Bank. The Appellant informed Respondent No. 2 about the registered will and also filed a probate petition in the Hon’ble Bombay High court in respect of the will. The Respondent No. 2 apprised SEBI about the dispute between brother and sister regarding the shares and withheld the transfer. The Respondent No. 1 filed petition No. 35 of 2022 against Respondent No. 2 for a direction to transfer the shares in his name. It is alleged that Respondent No. 1 did not implead the Appellant as a party, therefore, the Appellant filed the application bearing I.A. No. 158 of 2022 in the petition i.e. CP No. 35 of 2022.

The case set up by the Appellant is that she became the owner of the shares belonging to her mother by virtue of her last registered will dated 25.12.2019, however, the application has been dismissed by the Tribunal on the ground that the Appellant will not become the owner of the shares of her mother on the basis of the will in view of Regulation 23, Table F – Schedule I of the Act which deals with the transmission of shares and has also referred to a decision of the Hon’ble Allahabad High Court in the case of Ram Govind Misra Vs. Allahabad Theaters (P) Ltd. & Ors., 985 SCC OnLine All 1084. The application was dismissed on the ground that the Appellant is not a necessary party. Aggrieved against the said order, the present appeal has been filed.

Counsel for the Appellant has reiterated his stand taken before the Tribunal in regard to the shares being owned by her on the basis of registered will in her favour and to challenge the findings of the Tribunal recorded on the basis of Regulation 23 of Table F in Schedule I of the Act pertaining to transmission of shares, relied upon a decision of the Hon’ble Supreme Court in the case of Aruna Oswal Vs. Pankaj Oswal & Ors., (2020) 8 SCC 79 to contend that the jurisdiction of the NCLT does not extend to determination of dispute as to succession or ownership of shares rather proper forum is civil court and also relied upon a decision in the case of Shakti Yezdani & Anr. Vs. Jayanand Jayant Salgaonkar and Ors., (2016) SCC Online Bom 9834.

On the other hand, the Respondent has relied upon a decision of the Hon’ble High Court of Allahabad in the case of Ram Govind Mishra (Supra).

We have heard Counsel for the parties and perused the record.

There is no dispute that the shares in dispute were jointly owned by Respondent No. 1 with his deceased mother. It is also not in dispute that will propounded by the Appellant is in dispute. There is a specific provision in the Act in regard to the transmission of shares which is reproduced as under:-

The aforesaid provision is divided it into two parts. The first part provides that in case of death of a member, the survivor or survivors where the member was a joint holder and in case of death of a sole member, his nominee or nominees or legal representatives, shall be the only person recognised by the company as having any title to his interest in the shares.

In the present case, mother was a member (shareholder of Respondent No. 2) the only person recognised by the company for having a title to her interest in the shares is a survivor or survivors where the member was the joint member. Meaning thereby, surviving joint holder shall have a right whatsoever to claim the interest in the shares of the deceased joint holder. However, had it been a case of sole holder of the shares then perhaps the arguments of the Appellant can be accepted because rules provides that in such case the nominee or nominees or legal representatives shall be the person recognised by the company as having any title to the interest in the shares. Unfortunately for the Appellant, her mother was not the sole holder of the shares and the registered will in her favour executed by her even of the shares which she was holding jointly with son is of no use or consequence. The judgment relied upon by the Appellant both in the case of Aruna Oswal (Supra) and Shakti Yezdani & Anr. (Supra) are not on the issue involved in the present case rather the judgment relied upon by the Respondent No. 1 in the case of Ram Govind Misra (Supra) applies because it deals with it.

Thus, looking from any angle, we could not persuade ourselves to agree with the contention of the Appellant which is found to be devoid of merit, therefore, the appeal is hereby dismissed though without any order as to costs.