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2024 Supreme(Online)(NCLT) 4381
NATIONAL COMPANY LAW TRIBUNAL
K. R. Saji Kumar, Sanjiv Dutt, JJ
Vijay Data – Appellant
Versus
Reliance Industries Limited – Respondent
Company Petition No. 268/MB/2023
For the Appellant: Adv. Amol Vyas
For the Respondents:Adv. Kinjal Upadhyay, Advocate Vipul Shukla
A will suffices for the transmission of shares without requiring a probate under current regulations.
Headnote:(A) Companies Act, 2013 - Section 58(3) and 58(4) - National Company Law Tribunal Rules, 2016 - Refusal to transmit shares based on unregistered Will - Appellant's mother bequeathed shares to him by will - SEBI Circular dated 18.05.2022 clarifies that a will suffices for share transmission without needing probate - Respondents insisted on a probate, which contravenes SEBI Guidelines - Appeal allowed to register the transmission of shares. (Paras 5.1, 5.5 & 5.6)
(B) Limitation - Section 58(4) - Appeal is maintainable within 60 days of deemed refusal to register transmission as per the guidelines. (Paras 5.2 & 5.3)
Facts of the case:
The Appellant sought to transmit shares in the name of the deceased mother as per her will. Respondents refused citing the need for probate. The Appellant based his position on SEBI guidelines and prior rulings, asserting that his Will sufficed.
Findings of Court:
The Tribunal found merit in the Appellant's claims, noting that the Respondents failed to adhere to SEBI Circulars and misapplied requirements for share transmission.
Issues: Whether the requirement of probate for share transmission was applicable under current SEBI guidelines?
Ratio Decidendi: The Court ruled that a will alone is sufficient for share transmission in the absence of a specific board requirement for a probate or succession certificate.
Result: Appeal allowed.
ORDER
[PER: SANJIV DUTT, MEMBER (TECHNICAL)]
1. BACKGROUND
1.1 This Company Petition (Appeal) is filed by the Appellant on 25.07.2023 under Section 58 (3) of the Companies Act, 2013 (hereinafter referred to as "the Act") read with Rule 70 of the National Company Law Tribunal Rules, 2016 (hereinafter referred to as “the Rules”), seeking registration of transmission of shares from Respondent No.1, namely, Reliance Industries Limited ('RIL') and Respondent No.2, namely, KFin Technologies Ltd. which is the Registrar and Transfer Agent of RIL. Late Smt. Gulab Devi was a shareholder in Respondent No.1 and owned 1,288 equity shares with a face value of Rs.10/- each under Folio No.030218663. The Appellant is the Class-I legal heir of Smt. Gulab Devi, his mother, who passed away on 08.07.1999.
1.2 As per the Will of Smt. Gulab Devi, the entire shares held in various companies, including those in Respondent No. 1, were bequeathed to the Appellant. However, Respondent No. 2 rejected the Appellant’s request for transmission of shares vide its letter dated 19.05.2023. The refusal was based on the ground that given the value of the shares, the transmission could not be processed on the basis of an unregistered Will. Respondent No.2 thus called upon the Appellant to submit probate or a letter of administration from the competent court.
1.3 Aggrieved by the refusal and inaction on the part of the Respondents in transmitting the shares, the Appellant has filed this Appeal, inter alia, praying that the letter dated 19.05.2023 issued by the Respondent No.2 on behalf of Respondent No.1 may be quashed and set aside and the Respondents may be directed to transmit 1,288 equity shares of Reliance Industries Limited in the name of the Appellant on the basis of the Will in compliance with the SEBI Circular dated 18.05.2022.
AVERMENTS OF THE APPELLANT
2.1 The Appellant 's mother, Smt. Gulab Devi, the deceased, was a shareholder of Respondent No. 1, holding 1,288 equity shares having face value of Rs.10/- each under Folio No.030218663.The details of the shares held by the deceased in physical mode are as follows:-
2.2 As per the Will dated 14.06.1999 of Smt. Gulab Devi, the testator bequeathed all shares held in various companies, including those in Respondent No. 1, to the Appellant. The said Will has not been challenged by any person to date, thereby leaving no question regarding its validity. It is further pertinent to note that the husband of late Smt. Gulab Devi and the father of the Appellant, late Shri Ganga Deen Data, had already passed away on 30.05.1978, rendering the Appellant the sole Class-I legal heir of Smt. Gulab Devi.
2.3 Following his mother’s death on 08.07.1999, the Appellant, being the sole legal heir, sought to apply for the transmission of the shares held in Respondent No. 1 and accordingly sent an email dated 18.06.2020 to Respondent No.2 requesting the Respondents to intimate the procedure and required documents for the transmission of the aforementioned shares.
2.4 Upon receiving the said email, Respondent No. 2 sent a format for transmission of shares vide email dated 20.06.2020 outlining the procedure and required documents. Notably, one of the documents required was a Probate of Will/Succession Certificate/Letter of Administration, as the value of the shares exceeded Rs.2.00 lakh. In response, the Appellant sent an email dated 23.06.2020, drawing attention to Sections 213 and 57 of the Indian Succession Act, 1925 , which provide that when the Will is executed in Rajasthan and if both the deceased and the legal heir are residents of Rajasthan, a Probate, Succession Certificate, or Letter of Administration is not mandatory [ Sultan Singh vs. Brijraj Singh (S.B. Civil Revision Petition No. 1220/95 decided on 05.12.1996 by the Hon’ble Rajasthan High Court, Jaipur Bench)].
2.5 The Petitioner further cited Regulation 40(7) of Schedule VII of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which states that for
