Transmission of shares can be deferred where a succession certificate is under challenge and a rival claim is substantiated.

Where transmission of shares of a deceased shareholder is met by a substantiated rival claim and the succession certificate is itself under challenge, the tribunal may defer transmission until the competing claim is resolved. The record showed that the rival claimant asserted rights over the shares, held the original share certificates, and relied on a registered will to support the claim, while the appellant's succession certificate was pending challenge before the High Court. On those facts, directing notice to the rival claimant and postponing transmission was treated as a prudent and lawful course, with no illegality or infirmity in the order.

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Issues: Whether the Appellate Tribunal was justified in upholding the order directing notice to the rival claimant and postponing transmission of shares to the appellant in view of the pending challenge to the succession certificate.

Analysis: The dispute concerned transmission of shares standing in the name of the deceased shareholder, with competing claims from the appellant and the alleged second wife of the deceased. The record showed that the rival claimant had asserted rights over the shares, was in possession of the original share certificates, and had relied on the registered will only to establish the existence of a competing claim. The succession certificate obtained by the appellant was also under challenge before the High Court, which had condoned delay in the revocation proceedings. In these circumstances, the direction to issue notice to the rival claimant and to proceed with transmission only after the challenge to the succession certificate was resolved was treated as a prudent and lawful course.

Conclusion: The order of the NCLT was held to be free from illegality or infirmity, and the appeal failed.

Ratio Decidendi: Where a succession certificate is under challenge and there is a substantiated rival claim to the same shares, transmission may be deferred pending adjudication of the competing claim rather than being mechanically effected on the basis of the certificate alone.

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