Transmission of shares on succession certificate cannot be blocked by court-fee objections or demands for a fresh certificate.
A company must act on a valid succession certificate for transmission of shares and cannot refuse transmission by questioning alleged court-fee deficiency in the certificate proceedings. Where the certificate is issued by a competent court and there is no rival claimant, the company has no basis to sit in appeal over its validity or withhold transmission on that ground. The existing certificate also covers bonus shares, subdivisions, dividends and other accretions when its wording extends to the deceased shareholder's original shares and related benefits, so no fresh certificate is required. The company was therefore directed to transmit the shares and accretions in favour of the claimant.
Issues: (i) Whether the company's communication amounted to a refusal of transmission of shares so as to make the appeal maintainable; (ii) whether the succession certificate obtained by the appellant covered the subsequently issued bonus shares and related accretions, or whether a fresh certificate was required; (iii) whether the company could withhold transmission on the ground of alleged insufficiency of court-fee stamps in the succession certificate proceedings.
Issue (i): Whether the company's communication amounted to a refusal of transmission of shares so as to make the appeal maintainable.
Analysis: The succession certificate and death certificate had been lodged with the company. Instead of effecting transmission, the company required the appellant to obtain a fresh succession certificate and further stated that the application could be considered only after compliance with those directions. Such a communication, though not couched as an express rejection, effectively declined the request for transmission and therefore attracted the jurisdiction of the Board under the rectification provisions.
Conclusion: The appeal was maintainable and the company's objection on maintainability failed.
Issue (ii): Whether the succession certificate obtained by the appellant covered the subsequently issued bonus shares and related accretions, or whether a fresh certificate was required.
Analysis: The succession certificate was issued in respect of the estate of the deceased shareholder. At the date of death, the holding consisted of the original shares, but those shares later underwent subdivision and bonus issues. The certificate expressly declared the appellant as the rightful owner of the shares standing in the deceased's name together with all bonus, dividends, interests and other benefits accrued thereon. The certificate therefore extended to the enlarged holding represented by the original shares and the accretions flowing from them.
Conclusion: No fresh succession certificate was required and the existing certificate covered the relevant shares and accretions.
Issue (iii): Whether the company could withhold transmission on the ground of alleged insufficiency of court-fee stamps in the succession certificate proceedings.
Analysis: The sufficiency of court fee is a matter for the issuing court or the revenue authorities. Once a competent court has granted the succession certificate and there is no rival claimant, the company cannot sit in appeal over the certificate or refuse transmission on the basis of alleged deficiency in court fee. The company was bound to act upon the certificate.
Conclusion: The company was not justified in refusing transmission on that ground.
Final Conclusion: The company was directed to transmit the shares and accretions in favour of the appellant on the strength of the succession certificate, and the challenge to transmission was rejected.
Ratio Decidendi: A company cannot refuse transmission of shares once a competent succession certificate is produced and no rival claim exists, and it cannot question the sufficiency of court fee or insist on a fresh certificate where the existing certificate covers the original shares and their accretions.
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