Dr. Preet Anand vs CP World Lines Private Limited - 2026 Supreme(Online)(NCLT) 3597

Headnote:(A) Companies Act, 2013 - Sections 56, 58, 59, 46(2) and 58(5) - Companies (Share Capital and Debentures) Rules, 2014 - Rule 19 and Rule 6 - Hindu Succession Act, 1956 - Section 8 - Transmission of shares - Legal heirs’ entitlement - Refusal to register transmission without sufficient cause is unjustified and can be directed by Tribunal under Section 58; a succession certificate is not a mandatory prerequisite for transmission, particularly in family-owned companies where relationship and status as Class I legal heirs are admitted; a death certificate issued under the Registration of Births and Deaths Act, 1969 carries presumption of correctness and cannot be questioned absent contrary order; the Board’s discretion under Rule 19 is enabling, not mandatory, and must be exercised reasonably and in good faith; a plea of limitation fails where refusal is continuous and reiterated; issuance of duplicate share certificates under Section 46(2) is permissible where original certificates are proved lost or inaccessible. (Paras 5.vi, 5.vii, 5.viii, 5.ix, 5.x, 5.xi, 5.xii, 5.xiii)

(B) Limitation - In matters of refusal of transmission, the cause of action is continuous where the refusal is reiterated, and a hyper-technical approach to limitation would defeat the substantive rights of legal heirs. (Para 5.xi)

Facts of the case:
The petitioners, wife and daughter of the deceased majority shareholder (holding 90.67% equity shares) of a private limited company, sought transmission of those shares in their favour as the only Class I legal heirs under the Hindu Succession Act, 1956. The deceased died on 20.06.2021. The petitioners made repeated requests from 12.07.2021 onwards. The respondents (the company and its other directors, including the brother and father of the deceased) refused on grounds including the need for a succession certificate, alleged discrepancies in the death certificate, non-availability of original share certificates, and pendency of civil proceedings. The company had not transmitted the shares, and the minority shareholders (holding 9.33% and a small number of shares) continued to control the company. The petitioners obtained a legal heir certificate and filed a lost article report for the share certificates.

Findings of Court:
The Tribunal held that the refusal to register transmission was without sufficient cause. It directed the respondent company to register transmission of the 48,600 shares in favour of the petitioners, issue duplicate share certificates upon compliance with Section 46(2) and Rule 6 of the Companies (Share Capital and Debentures) Rules, 2014, and rectify the Register of Members within 10 days.

Issues: The main issues were whether the refusal to register transmission of shares in favour of the undisputed Class I legal heirs of the deceased majority shareholder was justified; whether a succession certificate is mandatory for transmission; and whether the denial of transmission on grounds of pending civil suits and alleged discrepancies in documents was reasonable.

Ratio Decidendi: The court ruled that where the relationship of the petitioners as the only Class I legal heirs of the deceased shareholder is admitted and not contested by any rival heir, and where the legal heir certificate remains valid, refusal to transmit shares on grounds of absence of a succession certificate or on speculative objections regarding the death certificate and original share certificates amounts to an unreasonable refusal under Section 58 of the Companies Act, 2013. The Board’s discretion to require evidence under Rule 19 is enabling, not mandatory, and cannot be exercised arbitrarily to perpetuate control by minority shareholders. Result : Petition allowed with directions for transmission and issuance of duplicate share certificates within 10 days.

Legal Category Hierarchy

1. Petition under Sections 58 and 59, Companies Act, 2013 for transmission of shares of deceased majority shareholder to his Class I legal heirs — Refusal by company. (Para 1 , 2 )

2. Petitioners claimed entitlement as legal heirs; respondents contended need for succession certificate and pendency of civil proceedings. (Para 2 , 3 , 4 )

3. Petition allowed — Respondent company directed to register transmission of shares and issue duplicate certificates within 10 days. (Para 5 )

4. Is a succession certificate mandatory for transmission of shares in a family company?

No. Rule 19 of the Companies (Share Capital and Debentures) Rules, 2014 is enabling, not mandatory. The Board must exercise discretion reasonably; where no competing claim exists, succession certificate is not a sine qua non. (Para 5 )

5. Can a company refuse transmission based on pendency of a civil suit regarding the death certificate or locker access?

No, unless the death itself is denied or the death certificate has been set aside. Internal disputes over locker access do not defeat the statutory right of transmission when no rival heir has come forward. (Para 5 )

6. How does the limitation period under Section 58(3) apply when refusal is continuous?

The cause of action is continuous when refusal is reiterated. The limitation cannot be construed hyper-technically to defeat substantive rights of legal heirs in a closely held family company. (Para 5 )

7. Under what conditions can duplicate share certificates be issued under Section 46(2)?

Duplicate certificates may be issued if the originals are proved to be lost. The company cannot use internal disputes over locker access to deny issuance when a Lost Article Report has been lodged and the originals are not produced. (Para 5 )

ORDER

PER: MANNI SANKARIAH SHANMUGA SUNDARAM, MEMBER (JUDICIAL)

1. The Petition has been filed under Section 58 and 59 of the Companies Act, 2013 and the National Company Law Tribunal Rules, 2016 seeking the following reliefs:

a) Direct the Respondent No. 1 Company to transmit the shares of late Mr. Ravi Anand and issue Duplicate share certificates in favour of the Petitioners.

b) Direct the Respondent No. 1 Company to comply with such order within a period of 10 days from the receipt of the order as per Section 58 (5)(a) of the Companies Act, 2013;

c) Direct the Respondent No. 1 Company to rectify their Register and to pay appropriate damages to the Petitioners as per Section 58 (5)(b) of the Companies Act, 2013; or

d) Pass such further order or orders as this Hon'ble Tribunal may deem fil in the interest of justice.

2. SUBMISSIONS OF THE PETITIONERS:

i. The Petitioners are the wife and daughter, respectively, of Late Mr. Ravi Anand, who was the majority shareholder holding 90.67% of the equity shares & the Managing Director of CP World Lines Private Limited, Respondent No. I herein.

ii. The Petitioner No. 1 got married to Late Mr. Ravi Anand in 1997 and both have a daughter, Ms. Khushi Anand (20 years old), Petitioner No. 2. Late Mr. Ravi Anand suffered a major cardiac arrest on 08.02.2018 and passed away on 20.06.2021, leaving behind the Petitioners herein as his only Class I legal heirs, as per the Hindu Succession Act, 1956, as his mother, Mrs. Lata Anand, pre-deceased him and already passed away in 2004. Therefore, as per the rules of succession, the Petitioners hold the right over all the deceased’s properties, movable and immovable, including the shareholding in the Respondent Company.

iii. C.P. World Lines Private Limited, Respondent No. 1 herein, is a private limited company registered with ROC Delhi vide registration number 094905. It was incorporated on 10.07.1998, having CIN U35114DL1998PTC094905. The registered office is at 181 Jeewan Nagar, Opposite Maharani Bagh, New Delhi - 110014. The Respondent No. 1 Company is carrying on the business of Custom Freight Agents and is registered with the Customs Authorities. Brief objects of the Respondent Company are set out in its Memorandum of Association and the Articles of Association.

iv. List of shareholders in the company as on 31.03.2020 is reproduced hereinbelow:

S. No.	Name and Address of Shareholder	No. of Shares	Value
1.	Ravi Anand 4/6A, Sector-5, Rajinder Nagar, Shahibabad, Ghaziabad	48,600	10
2.	Sandeep Anand A-101, Sector-44, Royal Residency, Noida. UP - 201001	4,990	10
3.	Nand Kumar Anand 4/6A, Sector-5, Rajinder Nagar, Shahibabad, Ghaziabad	10	10
	Total	53,600

v. As on date, the Board of Directors of the Respondent No. 1 Company Mr. Sandeep Anand and Mr. Nand Kumar Anand.

vi. Mr. Sandeep Anand, Respondent No.2 herein, is one of the directors and shareholders of the Respondent No. 1 company, holding 5000 (five thousand) equity shares, which amounts to 9.33% shareholding in the company. The Respondent No.2 is brother of Late Mr. Ravi Anand. During Mr. Ravi Anand's comatose state, he ousted him and appointed his father Shri Nand Kumar Anand as director of the company. He has recently transferred his 10 shares in the name of his father Mr. Nand Kumar Anand, reducing his shares to be 4,990. Such transfer was done without informing the legal heirs of the majority shareholder of the Company i.e. the Petitioners.

vii. The Respondent No. 3 herein, is Mr. Nand Kumar Anand, 82 years old director of Respondent No. 1 Company. He is the father of Respondent No. 2 and Late Mr. Ravi Anand. He was appointed as Director of the Respondent No. 1 Company, solely by Respondent No. 2. He recently has received 10 shares in the Respondent No. 1 Company, that were transferred to him by Respondent No. 2, in contravention of the Articles of Association of the Respondent No. 1 Company.

viii. The Respondent No.1 company was incorporated on 10.07.1998. It had 2 directors as well

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2026 Supreme(Online)(NCLT) 3597

NATIONAL COMPANY LAW TRIBUNAL
Manni Sankariah Shanmuga Sundaram, Judicial Member, Atul Chaturvedi, Technical Member
Dr. Preet Anand – Appellant
Versus
CP World Lines Private Limited – Respondent
C.P. NO. 25 (ND) OF 2023

Refusal to register transmission of shares to undisputed Class I legal heirs on grounds of absence of succession certificate or speculative objections constitutes unreasonable refusal under Section 58 of the Companies Act, 2013, and succession certificate is not mandatory in such cases.

Legal Category Hierarchy

Table of Contents

4. Is a succession certificate mandatory for transmission of shares in a family company?

5. Can a company refuse transmission based on pendency of a civil suit regarding the death certificate or locker access?

6. How does the limitation period under Section 58(3) apply when refusal is continuous?

7. Under what conditions can duplicate share certificates be issued under Section 46(2)?

2026 Supreme(Online)(NCLT) 3597

NATIONAL COMPANY LAW TRIBUNALManni Sankariah Shanmuga Sundaram, Judicial Member, Atul Chaturvedi, Technical MemberDr. Preet Anand – AppellantVersusCP World Lines Private Limited – RespondentC.P. NO. 25 (ND) OF 2023

Refusal to register transmission of shares to undisputed Class I legal heirs on grounds of absence of succession certificate or speculative objections constitutes unreasonable refusal under Section 58 of the Companies Act, 2013, and succession certificate is not mandatory in such cases.

Legal Category Hierarchy

Table of Contents

4. Is a succession certificate mandatory for transmission of shares in a family company?

5. Can a company refuse transmission based on pendency of a civil suit regarding the death certificate or locker access?

6. How does the limitation period under Section 58(3) apply when refusal is continuous?

7. Under what conditions can duplicate share certificates be issued under Section 46(2)?

Cases Referred (9)

NATIONAL COMPANY LAW TRIBUNAL
Manni Sankariah Shanmuga Sundaram, Judicial Member, Atul Chaturvedi, Technical Member
Dr. Preet Anand – Appellant
Versus
CP World Lines Private Limited – Respondent
C.P. NO. 25 (ND) OF 2023