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2025 Supreme(Online)(NCLT) 3008
NATIONAL COMPANY LAW TRIBUNAL
PRABHAT KUMAR, MEMBER (TECHNICAL), VIRENDRASINGH BISHT, MEMBER (JUDICIAL)
UNION OF INDIA – Appellant
Versus
VIDEOCON TELECOMMUNICATION LIMITED – Respondent
CA 373/2024 IN CP/294(MB)2021
For the Appellants/Petitioners: Mr. Himanshu Tripathi
For the Respondents: Mr. Aditya Sikka
Legal heirs are not liable for a deceased individual’s fraudulent activities unless benefitting from the estate related to those actions.
Headnote:(A) Companies Act, 2013 - Sections 241(1), 242(4), and 339 - Legal heirs of a deceased director cannot be held liable for actions taken by the director under the Companies Act; interim order freezing assets of the deceased resulted in hardship; reliance on precedent where legal heirs not held liable unless they had direct involvement in fraudulent activities. (Paras 1, 2, 6, 7, and 8)
(B) Legal heirs may only inherit liability up to the value of the estate. (Paras 5 and 7)
Facts of the case:
An application was made to recall an interim order freezing assets of a deceased director, with claims that legal heirs should not be liable for actions of the deceased.
Findings of Court:
Legal heirs can be compelled to respond to liabilities linked to the estate of the deceased director but with limitations.
Issues: Determining the liability of legal heirs under the Companies Act in relation to the deceased's alleged fraudulent activities.
Ratio Decidendi: Liability of a deceased individual under company law does not transfer to their legal heirs unless she holds the estate that benefits from wrongful acts. The intention of a deceased individual cannot be ascertained after death.
Result: The Company Application is dismissed.
NATIONAL COMPANY LAW TRIBUNAL
COURT ROOM NO. 1,
MUMBAI BENCH
Item No. 47
CA 373/2024 IN CP/294(MB)2021
CORAM:
SH. PRABHAT KUMAR JUSTICE VIRENDRASINGH BISHT (Retd.) HON’BLE MEMBER (TECHNICAL) HON’BLE MEMBER (JUDICIAL)
ORDER SHEET OF THE HEARING ON 08.07.2025
NAME OF THE PARTIES: UNION OF INDIA V/s VIDEOCON
TELECOMMUNICATION LIMITED
Section 241(1)-242(4) of the Companies Act, 2013 and Any other provision -
Govt body
________________________________________________________________
ORDER
CA 373/2024 IN CP/294(MB)2021
1) Mr. Himanshu Tripathi, Ld. Counsel for the Applicant and Mr. Aditya
Sikka, Ld. Counsel for the Respondent/Union of India are present.
2) The present Company Application has been filed by the Applicant, viz.
Mrs. Sarala Jatar and others in Company Application (CA No. 86 of 2022) to recall an Order of this Bench dt. 30.10.2023, wherein, it was noted that the Original Respondent No. 5 had since deceased and that the Ld. Counsel for the Union of India sought liberty to substitute the Legal Heirs, while the settled law is that Third Parties / Legal Heirs cannot be impleaded and the same is illegal and impermissible in law and Consequently the
Applicant herein deletion of Respondent Nos. 5(a) to 5 (c) from the array of Respondents (in CA 86 of 2022).
3) The facts in the present Application are as follows:
a. The present Application has been preferred by the Legal Heirs of the Respondent No. 5 (in CA 86 of 2022), who is since deceased. It is submitted that this Tribunal passed an Interim Order dt. 31.08.2021, vide which, this Tribunal granted all the Interim Reliefs as prayed for by the Union of India and one of the reliefs prayed by the Union of India is that “all movable and immovable properties of Respondents including bank accounts, lockers, demat accounts including jointly held properties be attached during the pendency of the company petition” was granted by virtue of the said interim Order dated 31.08.2021.
b. Applicant submits that the pension account and personal accounts of the Original Respondent No. 5 were frozen by Bank of Baroda, under the instructions of the office of the Regional Director, Western Region. It is submitted that the passing of the aforesaid Interim Order crippled the Original Respondent No. 5 and his family as the Original Respondent No. 5 was unable to meet even the most basic day to day expenditure as his personal bank accounts had been frozen by the Indian Banking Association on the directions laid down in the aforementioned interim order dated 31.08.2021. It is noticed that this Tribunal vide Order dt. 22.04.2022, Union of India made a statement at the bar that the Union of India had no objection for allowing the Original Respondent No. 5 to withdraw an amount to the extent of Rs. 2,00,000/- per month from the Bank Account to meet their day to day expenses / monthly expenses.
c. On 23.10.2023, the Original Respondent No. 5 passed away at MMF Joshi Hospital, Pune City, Pune - 411004. On 30.10.2023, this Tribunal passed an order wherein, inter alia, it was noted that the Original Respondent No. 5 had since deceased and that the Ld. Counsel for Union of India sought liberty to substitute the Legal Heirs.
d. It is submitted that the Applicants have now been impleaded /
substituted as legal heirs in the present Company Petition which is illegal and impermissible in law. It is submitted that Section 339 of the Companies Act, 2013 contemplates action / declaration against ‘‘any person, who is or has been a director, manager, or officer of the company or any persons who were knowingly parties to the carrying on of the business’’ and not against the legal heirs who were nowhere connected with the management of the Respondent No. 1 company or to the alleged fraudulent activities carried out therein. It is repeated and reiterated that even the Original Respondent No. 5 being an independent non-executive director of the Respondent No.
1 company was nowhere concerned with the day-to-day management of the Respondent No. 1 c
