Back
2024 Supreme(Online)(NCLT) 2879
NATIONAL COMPANY LAW TRIBUNAL
Anil Raj Chellan, Member (Technical), Kuldip Kumar Kareer, Member (Judicial)
Pratik Chandrakant Khandhadiya – Appellant
Versus
Hindustan Unilever Limited – Respondent
C.P. 35/MB/2022
For the Petitioner (In Person): Pratik C. Khandhadiya
For the Respondent: Jash Shah
Joint shareholders' rights after death supersede claims from unrelated wills; rectification must follow conflict resolution through civil courts.
Headnote:(A) Companies Act, 2013 - Sections 58 and 59 - Appeal against refusal to register transfer of shares - The joint holder of shares becomes the sole owner upon the death of a co-holder, rendering the will in favor of another party irrelevant. (Paras 24-27)
(B) Rectification jurisdiction - When there are conflicting claims over shares, appeal must first be resolved in civil proceedings before any rectification can be ordered under the Companies Act. (Paras 12-14)
Facts of the case:
The Petitioner seeks transfer of shares following the death of his mother, a joint holder. The Respondent denies the transfer due to conflicting claims made by the Petitioner’s sister.
Findings of Court:
The Petitioner is recognized as the sole titleholder of the shares post his mother’s death based on joint holding.
Issues: Clearly defined jurisdictional boundaries of the Tribunal regarding share transfers amidst conflicting claims.
Ratio Decidendi: Jointly held shares devolve on the survivor without regard to conflicting wills held by co-holders.
Result: Petition allowed; Respondent must transfer shares to Petitioner.
| Table of Content |
|---|
| 1. details of shareholding and transfer request. (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. disputes on share ownership must be resolved in court. (Para 12 , 14 , 17) |
| 3. title to shares in joint ownership goes to the survivor. (Para 24 , 26) |
| 4. order for transfer of shares to petitioner. (Para 28) |
ORDER
Per: -Mr. Kuldip Kumar Kareer, Member (Judicial)
1. This Company Petition is an appeal filed by the Petitioner u/s 58(3) of the Companies Act , 2013 against refusal by the Respondent Company to register the transfer of shares in the name of the Petitioner.
Facts of the Case:
2. The Petitioner along with his Late Mother Mrs. Niranjana Chandrakant Khandhadiya are shareholders of physical shares of Hindustan Unilever Limited (the Respondent No.1) for approximately the past 35 years and hold 4480 Shares Folio No. 2770404 Certificate No. 5076291 Distinctive Nos. From 0067965691 To 0067970170 and 180 Shares Folio No.2918207 Certificate No.5252076 Distinctive Nos. From 1141468801 To 1141468980.
3. After the passing away of Petitioner’s mother, Mrs. Niranjana Chandrakant Khandhadiya on 10.01.2021, the petitioner on 17.03.2021 sent to the Shares Department of Respondent Company, the following documents for deletion of his late Mother’s name from the shares certificates and also change of his name on the share certificates by speed post:
i. The Original Physical Certificates of shares of Hindustan Unilever Ltd, with Folio, Certificate and Distinctive Nos.
ii. Notarized copy of the death certificate of Petitioner’s deceased mother. iii. Notarized copy of Maharashtra Government Gazette notification of his change of name, from Petitioner’s earlier name Prayas Chandrakant Khandhadiya to Pratik Chandrakant Khandhadiya. iv) Original cancelled cheque of his Bank Account. v) Self attested copy of Pan Card & Address Proof.
4. The Petitioner claims that the above-mentioned shares were originally bought out of the Petitioner’s earnings approximately 35 years ago and due to the allotment of bonus shares many times by the Company over the years and sub-division of shares, they grew in value multi-fold. The above- mentioned shares of Hindustan Unilever Limited were bought in Petitioner’s mothers first name, as a family arrangement to create dividend income for her to make her financially independent in old age, which she received till the time of her passing away.
5. The Respondent’s Shares Department forwarded the above-mentioned documents to their Registrar & Transfer Agent (hereafter referred to as ‘RTA’ for brevity) M/s KFin Technologies Pvt. Ltd. {earlier known as Karvy FintechPvt. Ltd}. The Respondent’s RTA confirmed to the Petitioner, by their letter, Dt 30th March 2021 receipt of Petitioner’s letter along with the documents.
6. After a long delay and sending many email reminders to the Respondent and its RTA for non-receipt of Petitioner’s shares from Respondent’s RTA, the Petitioner, under instructions of his Attorneys, was compelled to send a Notice Dt. 04th June, 2021 to the Respondent and their RTA, u/s 56(4) and Regulation 23 of Table F in Schedule I of the Companies Act , 2013 by email. The said Notice clearly referred to the above-mentioned provisions under the Companies Act 2013, whereby the Respondent was required to carry out the deletion of the name of Petitioner’s late mother within one month as the Petitioner was the only joint holder and to send the Petitioner the shares after rectification of the register of the company, and also carry out his change of name as per the certified copy of Maharashtra Govt. Gazette submitted.
7. On 21st June 2021, Respondent’s RTA respondent vide letter dated 14th June 2021 stating that since they had received communication from Mrs. Pratiksha T. Lakhani, Petitioner’s sister, (hereafter referred to the ’Claimant’, for brevity) stating that no shares be transferred without her consent and further that the Respondent’s RTA had given Notice to the said claimant on 14.06.2021 to submit Court Orders from Com
