2001 (9) TMI 1125 - Board - Companies Law

CLB orders share transfer despite challenges, upholds will validity

Khurshid Alam Versus P. Pagnon Company (P) Limited

The Company Law Board (CLB) ordered the respondent company to register the transmission of 697 shares from late Enamul Haque to the petitioner, Khurshid ... - Issues Involved:1. Petition for rectification of the register of members under Section 111 of the Companies Act, 1956.2. Validity of the will and testament of late Enamul Haque.3. Allegations of suppression of material facts and misleading allegations by the petitioner.4. Genuineness of the death certificate of late Enamul Haque.5. Application of the law of limitation to the petition.6. Whether the matter should be relegated to a civil suit due to complicated issues.Issue-wise Detailed Analysis:1. Petition for Rectification of the Register of Members:The petitioner filed a petition under Section 111 of the Companies Act, 1956, seeking rectification of the register of members of the respondent company to include his name in respect of 697 shares standing in the name of his deceased father, Enamul Haque. The respondent company refused to register the transmission of shares, alleging that the will was not genuine and raised doubts about the death certificate.2. Validity of the Will and Testament of Late Enamul Haque:The petitioner claimed that his father, Enamul Haque, bequeathed 697 shares to him through a will dated 5 January 1983. The respondents challenged the genuineness of the will, stating that it was brought into existence after the notice dated 5 March 1986. They also pointed out that the will was notarized much later, on 25 November 1998. The Company Law Board (CLB) held that after the death of the registered shareholder, the title to the shares passed to his heirs and legal representatives by operation of law. The other heirs had accepted the will and conveyed their consent for transmission of shares in favor of the petitioner.3. Allegations of Suppression of Material Facts and Misleading Allegations:The respondents alleged that the petitioner suppressed material facts and made misleading allegations. They pointed to an affidavit dated 27 March 1985, where the petitioner stated that their father died intestate, which contradicted the existence of the will. The CLB found that the respondents' allegations did not hold, as the heirs had accepted the will and there was no third-party claim over the shares.4. Genuineness of the Death Certificate of Late Enamul Haque:The respondents cast doubt on the genuineness of the death certificate, claiming discrepancies in the place of death and burial. The CLB held that the fact of death was not in dispute and the discrepancies regarding the place of burial did not affect the transmission of shares or the genuineness of the will.5. Application of the Law of Limitation to the Petition:The respondents argued that the petition was barred by the law of limitation. The CLB noted that the Company Law Board is not a court within the meaning of the Limitation Act, but recent judicial pronouncements indicated that the provisions of the Limitation Act would apply. The CLB held that the petition should not be dismissed on the ground of delay or laches, as the petitioner had pursued the matter bona fide.6. Whether the Matter Should Be Relegated to a Civil Suit Due to Complicated Issues:The respondents contended that the issues were complicated and should be relegated to a civil suit. The CLB held that the complexity of issues should not automatically lead to relegation to a civil suit. The CLB found that the issues could be decided in a summary manner and exercised its jurisdiction to adjudicate the matter.Conclusion:The CLB ordered the respondent company to register the transmission of 697 shares standing in the name of late Enamul Haque to the petitioner, Khurshid Alam, within four weeks and rectify the register of members accordingly. The petition and pending applications were disposed of with no order as to costs.