Rakesh Gampa (62 Points)
21 August 2016Hi
a person has shares in a private limited company and nominated a person who is not a family member. After few years he expired without writing any WILL(Intestate).
Now who will be the owner of the shares the nominated person or his legal heirs.
Plz clarify according to our law and latest judgements.
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(178226 Points)
Replied 21 August 2016
Its duty of the Nominee to allocate the assets of the deceased to his legal heirs, as per their rights.
Practically, Companies transfer shares in the name of Nominee, unless any objection/s.
Pratik Shah
(Practising Company Secretary)
(4432 Points)
Replied 22 August 2016
Shares shall vest in the name of Nominee. It can not vest in the name of Legal heir. Kidnly refer Section 72 of Companies Act, 2013.
In general, for everything (bank balance, immovable property, movable assets), assests shall vest in the name of legal heir. However, only in case of securities governed under Companies Act, the securities shall vest in the name of Nominee. There was a judgement by High Court in this regard. I will shall you the link as soon as I find it.
Rakesh Gampa
(62 Points)
Replied 23 August 2016
Really thank you for the info,can u share me the link of the judgement.
is it also the same when companies act 1956 was in force
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 24 September 2016
Please note that nominee is just a trustee who gets property on behalf of the legal heirs. Companies Act does not deal with law relating to legal heirs (e.g. Hindu Succession Act) and provisions of Companies Act cannot over-ride Hindu Succession Act. Refer Bombay High Court judgement dated 31.3.2015 in the case of Jayanand Jayant Salgaonkar.
Pratik Shah
(Practising Company Secretary)
(4432 Points)
Replied 26 September 2016
Thank you Agrawal Sir for latest case law. I was refering to earlier caselaw i.e. 'Smt. Sarbati Devi v Smt. Usha Devi'
Pratik Shah
(Practising Company Secretary)
(4432 Points)
Replied 26 September 2016
Dear Rakesh, you can refer this Article.
https://thefirm.moneycontrol.com/story_page.php?autono=1386156
Rakesh Gampa
(62 Points)
Replied 26 September 2016
Actually Shares had been transferred in the name of nominee in 2012.now can the legal heir claim the shares according to latest judgement.
Brajendra Kumar Shukla
(Assistant Manager)
(23 Points)
Replied 16 March 2018
the shares are in joint holding and first holder is died without leaving any will, Nominee is the wife of second holder then what will be the situation
probable solution is Nominee will be added in place of first holder adn would be entitled to the share of 50% holding as in joint holding
is this correct
plaese guide
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