The Hon’ble Supreme Court, on 6th July 2020, in the matter of Aruna Oswal v. Pankaj Oswal & Ors. observed that merely disowning a son by late father or by the family, is not going to deprive him of any right in the property to which he may be otherwise entitled in accordance with the law.
The Hon’ble Supreme Court observed that:
It is quite apparent from a bare reading of the aforesaid provisions of section 72(1) of the Companies Act, 2013, every holder of securities has a right to nominate any person to whom his securities shall “vest” in the event of his death. In the case of jointholders also, they have a right to nominate any person to whom “all the rights in the securities shall vest” in the event of death of all joint holders. Subsection (3) of section 72 contains a nonobstante clause in respect of anything contained in any other law for the time being in force or any disposition, whether testamentary or otherwise, where a nomination is validly made in the prescribed manner, it purports to confer on any person “the right to vest” the securities of the company, all the rights in the securities shall vest in the nominee unless a nomination is varied or cancelled in the prescribed manner. It is prima facie apparent that vesting is absolute, and the provisions supersede by virtue of a nonobstante clause any other law for the time being in force. Prima facie shares vest in a nominee, and he becomes absolute owner of the securities on the strength of nomination. Rule 19(2) of the Companies (Share Capital and Debentures) Rules, 2014 framed under the Act, also indicates to the same effect. Under Rule 19(8), a nominee becomes entitled to receive the dividends or interests and other advantages to which he would have been entitled to if he were the registered holder of the securities; and after becoming a registered holder, he can participate in the meetings of the company. (Para 15)
There is no doubt that in the absence of nomination, a legal representative cannot be denied the right to maintain a petition regarding oppression and mismanagement. (Para 16)
Adjudication of the question of ownership of shares is not contemplated under Section 397. (Para 22)
Merely disowning a son by late father or by the family, is not going to deprive him of any right in the property to which he may be otherwise entitled in accordance with the law. The pertinent question needs to be tried in a civil suit and adjudicated finally, it cannot be decided by NCLT in proceedings in question. (Para 26)
Copy of judgement: Judgement_6-Jul-2020
-Adv. Tushar Kaushik