Nomination of dematerialised shares vests full ownership in the nominee, excluding heirs and legal representatives.

A valid nomination for dematerialised shares under the Companies Act and the Depositories Act vests all rights in the nominee to the exclusion of other claimants. The statutory scheme makes the nominee entitled to the full bundle of rights on the death of the beneficial owner, and the last valid nomination prevails. This position is distinguished from regimes such as insurance and co-operative society law, where nomination generally secures transmission or payment but does not itself confer ownership. The legal effect is that a properly made nomination for dematerialised securities overrides competing claims by heirs or legal representatives.

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Issues: Whether a valid nomination in respect of dematerialised shares vests ownership rights in the nominee to the exclusion of the deceased shareholder's heir and legal representative.

Analysis: Section 109A of the Companies Act provides that, where a nomination is made in the prescribed manner, the nominee becomes entitled to all the rights in the shares to the exclusion of all other persons. The Depositories Act reinforces this position by providing that the securities shall vest in the nominee on the death of the beneficial owner and that the last valid nomination prevails. The statutory scheme for dematerialised shares is therefore different from the position under the Insurance Act or the Maharashtra Co-operative Societies Act, where nomination operates to secure payment or transfer and does not itself confer full ownership rights. The legislative intent is to simplify transmission of dematerialised securities and to vest the entire bundle of rights in the validly nominated person.

Conclusion: A valid nomination under the Companies Act and the Depositories Act confers ownership rights in the dematerialised shares on the nominee, to the exclusion of the heir or legal representative.

Ratio Decidendi: Where the governing statute expressly provides that the nominee shall be entitled to all rights in the shares to the exclusion of all other persons, a valid nomination effects vesting of ownership in the nominee and overrides competing claims by heirs.

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