TaxTMI 
TaxTMI 
2015 (10) TMI 265
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....Ltd., M/s. Ram Bagh Palace Hotels Pvt. Ltd., M/s Sawai Madhopur Lodge Pvt. Ltd. and M/s. S.M.S. Investment Corporation Pvt. Ltd. He died on 05th February, 1997 leaving behind a Will dated 23rd June, 1996 in favour of his mother Gayatri Devi ("GD"). Succession certificate dated 19th February, 2009 was issued by the District Judge, Jaipur jointly in favour of GD and DR Group. GD executed transfer deed dated 27th April, 2009 in favour of DR Group. She also executed Will dated 10th May, 2009 in favour of DR Group. She died on 29th September, 2009. Vide letter dated 15th July, 2009, DR Group claimed transmission and transfer of shares in their favour on the basis of succession certificate dated 19th February, 2009 issued by the District and Sessions Judge, Jaipur (Civil), transfer deed dated 27th April, 2009 executed by their grand mother Gayitri Devi ("GD") along with revalidation of the letter issued by the Registrar of Companies. 3. The application having not been accepted by the Company, the DR Group filed appeals before the Company Law Board ("CLB"), New Delhi. Urvashi Devi, grand daughter of husband of GD from another wife ("UD Group") filed application for impleadment stating ....
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....rove? (iv) Whether the probate proceedings in Case No.32/2006 could be dismissed/disposed of on the basis of a settlement between the private parties? (v) Whether probate proceedings exist as on date? (vi) Whether construction of the Will is required? (vii) Whether bar of Section 370 of the Indian Succession Act operates in the facts and circumstances of this case? (viii)Whether Sections 373, 381, 383 and other provisions of the Indian Succession Act are applicable in the facts and circumstances of this case? (ix) Whether Late Maharaj Jagat Singh was adopted? (x) Who really are the legal representatives for the shares held in the sole name of the deceased?" 6. To decide the above questions, following issues were framed : (i) Whether these petitions involve disputed and complicated questions of law and facts regarding entitlement to the estate of late Maharaj Jagat Singh? (ii) If these petitions involve complicated questions of law and facts, whether these are maintainable before the CLB? To be precise, whether the CLB has jurisdiction in this matter or it is ousted on account of the competent court i.e. Civi....
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....the main issue to be considered in this matter? 7. It was held that the Board could not decide the complexity of facts and law which had arisen and such questions could be decided before the Civil Court and not before the CLB. In this view of the matter, the matter was not gone into on merits. The concluding part of the order is as follows : "67. Having carefully considered the facts of the present case and the nature of the allegations made by the parties as mentioned above and applying the ratio of the decisions mentioned above, I am of the view that such disputed and complicated questions of law and facts cannot be decided by the CLB in the summary jurisdiction under Section 111 of the Act. Such questions which are involved in the present case can be decided before the Civil Court on the basis of the oral and documentary evidence adduced by the parties in support of their respective cases. The CLB is not the forum to adjudicate on these complicated questions of law and facts. The issue "whether the application is not maintainable on account of its involving complicated questions of title" it is not necessary to decide the other issues raised in the case. ........." ....
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....s rejected. It was observed that stay order was passed at the instance of GD herself whose statement itself was the basis of the order dated 19th February, 2009. Writ Petition No.7524 of 2008 wherein order dated 20th August, 2008 was passed itself was got disposed of as infructuous on 18th January, 2011 in view of order dated 19th February, 2009. UD Group was in no manner connected with those proceedings. As regards Suit filed by UD Group challenging order dated 19th February, 2009, interim application for stay of order dated 19th February, 2009 was dismissed on 28th July, 2011. The Court had refused to grant any interim injunction in favour of UD Group and other plaintiffs. As regards disinheritance of DR Group in Will dated 23rd June, 1996, it was observed that the reason for disinheriting as mentioned therein was not against the DR Group but only against the estranged wife of the testator. The GD who was the legatee herself bequeathed her rights in favour of the DR Group by duly signing the transfer deeds and communicating the same to the Board of Directors. She also executed Will dated 10th May, 2009. Mere fact that the same had been challenged was no bar to the claim of the DR....
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....er, remained as to the rights of DR Group to have the shares transferred in their favour. The Board of Directors was dominated by the UD Group who abused its position to deprive DR Group of their rights. The CLB failed to appreciate the scope of its jurisdiction as well as the scope of controversy between the parties. The High Court rightly allowed their appeal. Apart from relying upon the judgment in Ammonia (supra), reliance was also placed on judgment of Calcutta High Court by Ruma Pal, J. (as she then was) in Nupur Mitra vs. Basubani Pvt. Ltd. 1999 (2) Calcutta Law Times 264. 14. We have given due consideration to the rival submissions. The main question for consideration is whether there is any real dispute between the parties about the entitlement of DR Group to have the shares transferred in their favour and whether the exercise of jurisdiction by the High Court is beyond the scope of Section 111 of the Companies Act. 15. We are of the opinion that there is no real dispute between the parties as held by the High Court. DR Group has furnished the succession certificate as well as the transfer deed executed by GD in their favour. The same had to be acted upon. Moreover, ....
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.... (supra), scope of Section 111(7) was considered. It was observed that jurisdiction being summary in nature, a seriously disputed question of title could be left to be decided by the civil court. It was observed : "29 ......The nature of proceedings under Section 111 are slightly different from a title suit, although, sub-section (7) of Section 111 gives to the Tribunal the jurisdiction to decide any question relating to the title of any person who is a party to the application, to have his name entered in or omitted from the register and also the general jurisdiction to decide any question which it is necessary or expedient to decide in connection with such an application. It has been held in Ammonia Supplies Corpn. (P) Ltd. v. Modern Plastic Containers (P) Ltd. that the jurisdiction exercised by the Company Court under Section 155 of the Companies Act, 1956 (corresponding to Section 111 of the present Act, before its amendment by Act 31 of 1988) was somewhat summary in nature and that if a seriously disputed question of title arose, the Company Court should relegate the parties to a suit, which was the more appropriate remedy for investigation and adjudication of such se....