Tag Archives: Succession

Rights of A Nominee – of A Shareholder

It is quite apparent from a bare reading of the provisions of section 72(1) of the Companies Act, 2013 that 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 joint-holders 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. Sub-section (3) of section 72 contains a non-obstante 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 non-obstante 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. Aruna Oswal v. Pankaj Oswal, (2020) SCC Online SC 570.

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Distinction Between – ‘Testator’ and ‘Attestors’

In Nagulapati Lakshmamma v. Mupparaju Subbaiah, (1998) 5 SCC 285, after referring to Section 63 of the Indian Succession Act, 1925 it was held as under:         “The section makes a vital distinction between the testator and the attestors in the matter of signing the Will. The testator may sign or affix his mark himself or direct some other person to sign in his presence. The reason for such a provision is quite obvious. Many a time, people who are desirous of making testamentary dispositions may be physically incapacitated from signing their names or affixing their marks on account of illness or other causes. Such persons should not be deprived of an opportunity of making a Will. Such persons can instead of signing or affixing their marks themselves can direct some other person to sign in their presence. But in the case of attestors such an enabling provision is absent. The section expressly states that each of the witnesses shall sign the Will in the presence of the testator. The privilege or power of delegation, if we may say so, is not available to the attesting witnesses under the section. When the same section makes a distinction expressly between a testator and an attestor it is not possible to accept the contention that an attestor can also direct some other person to sign or make a mark on his behalf. If a witness to the execution of the Will chooses to do so, he is not an attesting witness as there is no attestation by him as contemplated by Section 63(c) of the Indian Succession Act. Consequently, he will not be an attesting witness for the purpose of Section 68 of the Indian Evidence Act. Laxmi Kant v. Smt. Ganga Devi, 2018 (5) AWC 5141.

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Self Acquired Property – Character of Joint Family Property

The law on the aspect of blending is well settled that property separate or self acquired of a member of a joint Hindu family may be impressed with the character of joint family property if it is voluntarily thrown by the owner into the common stock with the intention of abandoning his separate claim therein; but to establish such abandonment, a clear intention to waive separate rights must be established. Clear intention to abandon separate rights in the property must be proved. Even abandonment cannot be inferred from mere allowing other family members also to use the property or utilization of income of the separate property out of generosity to support the family members. S. Subramanian v. S. Ramasamay, (2019) 6 SCC 46.

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Hindu Succession (Amendment) Act, 2005 – Effect on Prior Partitions

The legislature has expressly made the amendment applicable on and from its commencement and only if death of the coparcener in question is after the amendment. Thus no other interpretation is possible in view of the express language of the statute. The proviso keeping dispensations or alienations or partitions prior to 20.12.2004 unaffected can also not lead to the inference that the daughter could be a coparcener prior to the commencement of the Act. The proviso only means that the transactions not covered thereby will not affect the extent of coparcenary property which may be available when the main provision is applicable. Similarly, Explanation has to be read harmoniously with the substantive provision of Section 6(5) by being limited to a transaction of partition effected after 20.12.2004. Notional partition, by its very nature, is not covered either under the proviso or under sub-section (5) or under the Explanation.
Interpretation of a provision depends on the text and the context. Normal rule is to read the words of a statute in ordinary sense. In case of ambiguity, rational meaning has to be given. In case of apparent conflict, harmonious meaning to advance the object and intention of legislature has to be given.
Normal rule is that a proviso excepts something out of the enactment which would otherwise be within the purview of the enactment but if the text, context or purpose so require a different rule may apply. Similarly, an explanation is to explain the meaning of the words of the section but if the language or purpose so require, the explanation can be so interpreted. Rules of interpretation of Statutes are useful servants but difficult masters. Objects of interpretation is to discover the intention of the legislature.
The proviso to Section 6(1) and sub-section (5) of Section 6 of the Hindu Succession Act clearly intend to exclude the transactions referred to therein which may have taken place prior to 20.12.2004 on which date the bill was introduced. Explanation cannot permit reopening of partitions which were valid when affected. Object of giving finality to transactions prior to 20.12.2004 is not to make the main provision retrospective in any manner. The object is that by fake transactions available property at the introduction of the Bill is not taken away and remains available as and when right conferred by the Statute becomes available and is to be enforced. Main provision of the amendment in Sections 6(1) and (3) is not in any manner intended to be affected but strengthened in this way.
The rights under the amendment are applicable to living daughters of living coparceners as on 09.09.2005 irrespective of when such daughters are born. Disposition or alienation including partitions which may have taken place before 20.12.2004 as per law applicable prior to the said date will remain unaffected. Any transaction of partition effected thereafter will be governed by the Explanation. Prakash v. Phulavati, (2016) 2 SCC 36.

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Law Presumes in Favour of Marriage – And Against Concubinage

In the case of A. Dinohamy v. W.L. Balahamy, AIR 1927 PC 185, it was held that where a man and woman are proved to have lived together as husband and wife, the law will presume, unless the contrary is clearly proved, that they were living together in consequence of a valid marriage and not in a state of concubinage. The court observed as under:
“The parties lived together for twenty years in the same house, and eight children were born to them. The husband during his life recognized, by affectionate provisions, his wife and children. The evidence of the Registrar of the District shows that for a long course of years the parties were recognized as married citizens and even the family functions and ceremonies, such as, in particular the reception of the relations and other guests in the family house by Don Andris and Balahamy as host and hostess-all such functions were conducted on the footing alone that they were man and wife. No evidence whatsoever is afforded of repudiation of this relation by husband or wife or anybody.
In the case of Gokal Chand v. Parvin Kumari, AIR 1952 SC 231, the court observed that continuous cohabitation of woman as husband and wife and their treatment as such for a number of years may raise the presumption of marriage, but the presumption which may be drawn from long cohabitation is rebuttable and if there are circumstances which weaken and destroy that presumption, the court cannot ignore them.
It is well settled that the law presumes in favour of marriage and against concubinage, when a man and woman have cohabited continuously for a long period of time. However, the presumption can be rebutted by leading unimpeachable evidence. A heavy burden lies on a party, who seeks to deprive the relationship of legal origin. Dhannulal v.Ganeshram, 2015 (4) AWC 3539.

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Probate of a Will – Not Mandatory In Respect of Properties Situate In State of U.P.

Probate of a will is not necessary outside the presidency towns of Bengal, Bombay and Madras as has been held in Bhaiya Ji v. Jageshwar Dayal Bajpai, AIR 1978 All 268 and Smt. Pitmo v. Shyam Singh, 1978 (4) ALR 173. The said decisions hold that a probate is not required to be obtained by a Hindu in respect of a Will regarding immovable properties in territories other than Bengal, Bombay and Madras. Thus, probate of will is not mandatory in respect of a Will concerning properties situate in the State of U.P. Ramjas (Dead) through LRs v. Smt. Sunder Devi (Dead) and another, 2014 (125) RD 376.

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Will and Gift/Settlement – Difference Between

Will is an instrument whereunder a person makes a disposition of his properties to take effect after his death and which is in its own nature ambulatory and revocable during his lifetime. It has three essentials:
(1) It must be a legal declaration of the testator’s intention;
(2) That declaration must be with respect to his property; and
(3) The desire of the testator that the said declaration should be effectuated after his death.
The essential quality of a testamentary disposition is ambulatoriness of revocability during the executants lifetime. Such a document is dependent upon executants death for its vigour and effect.
Section 2(h) of the Indian Succession Act says “Will” means the legal declaration of the intention of a testator with respect to his property which he desires to be carried into effect after his death.
Gift/Settlement is the transfer of existing property made voluntarily and without consideration by one person called the donor to another called the done. Gift takes effect by a registered instrument signed by or on behalf of the donor and attested by at least two witnesses. Section 122 of the Transfer of Property Act defines the “gift” as a voluntary transfer of property in consideration of the natural love and affection to a living person. Mathai Samuel v. Eapen Eapen (Dead) by LRs and others, 2013 (118) RD 606.

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