National Company Law Appellate Tribunal
Gunjan Sharma & Anr vs Shanivi Constructions Pvt. Ltd. & Anr on 21 September, 2023
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
PRINCIPAL BENCH
NEW DELHI
Company Appeal (AT) No.132 of 2023
In the matter of:
Gunjan Sharma & Anr. ..... Appellants
Vs
Shanivi Construction Pvt Ltd . .... Respondent
For Appellant: Mr. Rakesh Kumar, Ms Preeti Kashyap, Mr.
Ankit Sharma, Mr. Rishabh Arora, Mr.
Varun Pandit, Advocates.
For Respondent: Mr.Giridhar SV, Mr. Maharishi
Kaler, Mr. Deepak Joshi, Advocates.
With
Company Appeal (AT) No.148 of 2023
In the matter of:
Shanivi Construction Pvt Ltd ... Appellant
Vs
Kaashvi Prasher & Ors ... Respondents
For Appellant: Mr. Rakesh Kumar, Ms Preeti Kashyap, Mr.
Ankit Sharma, Mr. Rishabh Arora, Mr.
Varun Pandit, Advocates.
For Respondent: Mr.Giridhar SV, Mr. Maharishi
Kaler, Mr. Deepak Joshi, Advocates.
JUDGMENT
(Date: 21.9.2023) [Per.: Dr. Alok Srivastava, Member (Technical)] The two appeals namely, Company Appeal (AT) No. 148 of 2023 and Company Appeal (AT) No. 132 of 2023 have been filed Company Appeal (AT) No.132 of 2023 and Company Appeal (AT) No.148 of 2023 Page 1 of 19 by the respective Appellants who are aggrieved by the order dated 5.7.2023 (in short "Impugned Order") passed by National Company Law Tribunal, New Delhi in Company Petition No. 163 (ND)/2021.
2. In brief the facts of the case insofar as they are relevant to these appeals are that Shri Gagan Parasher (now deceased) and his brother Shri Gunjan Sharma were running a company by name of Shanivi Constructions Pvt. Ltd. This Company, in course of time, did quite well and started deriving large revenue from infrastructure projects being carried out by the Company. Shri Gagan Parasher, the elder brother, owned 45000 equity shares in the Appellant Company, while Shri Gunjan Sharma owned the rest of equity shares in the total shareholding of the company. Shri Gagan Parasher passed away on 25.04.2020, leaving a 'Will' whereby he bequeathed his entire shareholding of 45000 equity shares in the Appellant company to his younger daughter Kaashvi Parasher, who is Respondent No. 1 in Company Appeal (AT) No. 148 of 2023.
3. It is stated by the Appellant that Shri Gagan Parasher and his wife had matrimonial issues which resulted in divorce decree dated 11.7.2018 between them, and subsequently Smt. Priti Parasher, his former wife started living separately with her elder daughter Kashish Parasher. After Shri Gagan Parasher's death, his younger daughter Kaashvi Parasher sent a letter dated 27.1.2021 addressed to the Board of Directors of Shanivi Constructions Pvt. Ltd. for transmission of 45,000 equity shares held in the Appellant company by late Shri Gagan Parasher to her. In view of the fact that the 'Will' of Shri Gagan Parasher, by which he had bequeathed his 45000 shares in the Appellant Company Appeal (AT) No.132 of 2023 and Company Appeal (AT) No.148 of 2023 Page 2 of 19 Company to Kaashvi Parasher and because 'Will' included a condition that Kaashvi Parasher shall sell these shares to the Appellant Company and if the Appellant Company is not willing to purchase the said shares within five years, she would be free to sell the shares in the open market, the Appellant Company sent a reply dated 22.2.2021 to Kaashvi Parasher whereby the Company offered to purchase the said shares from Kaashvi Parasher after valuation report of the shares is available. On such basis, the Company refused to transmit the said shares in the name of Kaashvi Parasher and urged her to withdraw letter dated 27.1.2021.
4. The Appellant Company has further stated that while these proceedings were going on, the Appellant Company started to pay Rs. 50,000/- p.m. for monthly expenses to Kaashvi Parasher. The Appellant Company has further stated that since Kaashvi Parasher was aggrieved by the letter dated 22.2.2021 whereby the Company had had refused to transmit the 45,000 shares in her name, she preferred Company Petition No. 166 (ND)/2021 before the National Company Law Tribunal, New Delhi in which the Impugned Order was passed on 5.7.2023. The Appellant Company Shanivi Constructions Pvt. Ltd. (in Company Appeal (AT) No. 148/2023) and the Appellants, Gunjan Sharma and Abhinav Goyal (in Company Appeal (AT) No. 132 of 2023) have preferred the respective appeals aggrieved by the said Impugned Order.
5. We heard the arguments advanced by the parties in both the appeals under consideration and perused the record in both the appeals with their able assistance.
Company Appeal (AT) No.132 of 2023 and Company Appeal (AT) No.148 of 2023 Page 3 of 19
6. The Learned Counsel for Appellants has argued that Shanivi Constructions Pvt. Ltd. was being run by the two brothers, Gagan Parasher and his younger brother Gunjan Sharma, and in course of time this company developed extremely good business resulting in a positive growth in turnover from year to year. He has further argued that Shri Gagan Parasher owned 45,000 equity shares in the company (68% of shareholding) and the remaining 32% of shareholding was held by the younger brother Shri Gunjan Sharma. He has further submitted that Gunjan Sharma provided technical expertise in the Company and the growth of the Company was, in a big way, due to his efforts. He has further submitted that the elder brother Shri Gagan Parasher had matrimonial dispute with his then wife Smt. Priti Parasher and they obtained divorce in the year 2018. He has further submitted that, in view of the fact that the Company was doing quite well in its line of business, the elder brother Gagan Parasher thought it fit to make a 'Will' dated 6.1.2017, whereby among other stipulations, Kaashvi Parasher was designated as the sole inheritor of his shares in the Appellant Company with an added condition that Kaashvi Parasher would have no right to sell or alienate the said shares and the Company would pay the amount equivalent to his shareholding within five years of his death and only in the condition if the company fails to purchase the said shares within five years, Kaashvi Parasher shall have full right to dispose of the shares in the open market.
7. The Learned Counsel for Appellants has further argued that after the demise of Shri Gagan Parasher, a settlement was reached between Smt. Priti Parasher, elder daughter Kashish Parasher, younger daughter Kaashvi Parasher and their uncle Gunjan Sharma whereby a family settlement was worked out and Company Appeal (AT) No.132 of 2023 and Company Appeal (AT) No.148 of 2023 Page 4 of 19 it was agreed that in accordance with this settlement, a major part of expenses relating to the education of Kaashvi Parasher shall be by borne by Gunjan Sharma. He has argued that in view of the registered will and the family settlement dated 22.6.2022, the Appellant Company was correct in refusing the transmission of the said shares in the name of Kaashvi Parasher and therefore, the quashing of the Company's letter dated 22.2.2021 by the Impugned Order is erroneous and bad in law.
8. The Learned Counsel for Appellants has cited the judgment of Hon'ble Supreme Court in the matter of Thulasidhara & Another versus Narayanappa & Others [Civil Appeal No. 784 of 2010], wherein it is held that a family settlement, even if unregistered, would operate as a complete estoppel against the parties to such a family settlement and can be used as corroborative evidence to explain the conduct of the parties. He has also cited the judgment of this Tribunal in the matter of Amritsar Swadeshi Woollen Mills Private Ltd. vs. Vimal Krishan Khanna & Ors. [Company Appeal (AT) No. 256 of 2018], wherein this Tribunal has held that irrespective of stand of the parties and their pleadings, the paramount consideration should be in the interest of the company and, on this account, transferring shares to Kaashvi Parasher in the instant case would upset the balance in the management of the company, thereby affecting its business.
9. The Learned Counsel for the Appellants in Company Appeal (AT) No. 132 of 2023 has argued that both the Appellants Gunjan Sharma and Abhinav Goyal are Directors in the Appellant Company and, therefore, they are interested parties insofar as the business and financial health of the Company is Company Appeal (AT) No.132 of 2023 and Company Appeal (AT) No.148 of 2023 Page 5 of 19 concerned and hence entitled to prefer the appeal assailing the Impugned Order.
10. The Learned Counsel for Respondent Kaashvi Parasher mentioned that the Respondent's father Shri Gagan Parasher and his wife Priti Parasher were divorced in July, 2018 and the younger daughter Kaashvi Parasher continued to live with her father and his former wife Priti Parasher and elder daughter Kashish Parasher started living separately. He has further argued that Shri Gagan Parasher owned 45000 equity shares in Shanivi Constructions Pvt. Ltd. and Kaashvi Parasher submitted an intimation for transmission of these 45000 shares held by her father under section 56(2) of the Companies Act, 2013 attaching therewith 'No Objection' of her mother Priti Parasher and elder sister Kashish Parasher in her (Kaashvi Parasher's) name. He has further submitted that after the death of Shri Gagan Parasher, his former wife Priti Parasher and daughters Kashish Parasher and Kaashvi Parasher are legal heirs and since the Priti Parasher and Kashish Parasher have given a no objection, the said request sent by Kaashvi Parasher vide letter dated 27.1.20212 should have been acceded to by the Appellant Company.
11. The Learned Counsel for Respondent Kaashvi Parasher has also pointed out that that the requested transmission is in accordance with Kaashvi's inheritance as legal heir of the deceased Gagan Parasher in view of the 'no objection' given by her mother and sister Kashish. He has, thus, argued that there was no reason that, after looking at the no objection given by the two other legal heirs namely, Smt. Priti Parasher and Ms. Kashish Parasher, the Company should have accepted the application and Company Appeal (AT) No.132 of 2023 and Company Appeal (AT) No.148 of 2023 Page 6 of 19 allowed transmission of the said shares. He has also argued that the uncle Mr. Gunjan Sharma, who is controlling the Company presently is coming in the way of the Respondent Kaashvi Parasher in getting lawful dues as her right.
12. The Learned Counsel for Respondent has further argued that the conditionality put in the 'Will' not come in the way of transmission of shares and the Respondent's application dated 27.1.2021 was only regarding transmission of said shares. He has further argued that a third party right has been created in the 'Will' in favour of Shanivi Construction Pvt. Ltd. by stipulating that Kaashvi Parasher will sell her shares to the Shanivi Construction Pvt. Ltd., and such third-party rights cannot be created by the 'Will'. Further, the Articles of Association of the Company do not have any clause that allows the company to buy- back its shares. In this context, he has referred to section 68(2) of the Companies Act, 2013, wherein 'buy-back' of shares has to be authorised by the Articles of Association of the Company and a Special Resolution is required, whereas in the present case, such a provision does not exist in the Articles of Association or that a Special Resolution has been made for the purpose. He has, thus, argued that Shanivi Construction Pvt. Ltd. could not 'buy-back' its own shares and therefore, it is not even entitled to prefer this appeal.
13. The Learned Counsel for Respondent has further argued that Gunjan Sharma and Abhinav Goyal, who are Appellants in Company appeal (AT) 132 of 2023, are not beneficiaries in the transmission of shares and therefore, they do not have any locus standi to file the appeal. He has further argued that among the reliefs sought in the appeal, prayer (b) is regarding giving Company Appeal (AT) No.132 of 2023 and Company Appeal (AT) No.148 of 2023 Page 7 of 19 direction to the Appellant company to pay the Respondent the value of 45,000 equity shares, which was not a subject matter of the Company Petition No. 163/ND/2021, and therefore, such a relief could not have been claimed at the stage of the appeal.
14. The Learned Counsel for Respondent has distinguished both the judgments cited by the Learned Counsel for Appellant as not being applicable in view of the facts and circumstances of the present case and also because the purported settlement was neither part of the appeal memo filed by Gunjan Sharma and Abhinav Goyal nor a relevant issue in transmission of shares, since it was executed much after the demise of Gagan Parasher. Finally, the Learned Counsel for Respondent has argued that both the appeals are devoid of merit. Moreover, in CA(AT) No. 132/2023, the Appellants Gunjan Sharma and Abhinav Goyal do not have any locus standi to maintain the appeal. Therefore, both the appeals should be dismissed with cost.
15. We first notice section 56 of the Companies Act, 2013, which is regarding transfer and transmission of securities of a company. This provision is reproduced below for ready reference:-
"56. Transfer and transmission of securities. (1) A company shall not register a transfer of securities of the company, or the interest of a member in the company in the case of a company having no share capital, other than the transfer between persons both of whose names are entered as holders of beneficial interest in the records of a depository, unless a proper instrument of transfer, in such form a may be prescribed, duly stamped, dated and executed by or on behalf of the transferor and the transferee and specifying the name, address and occupation, if any, of the transferee has been delivered to the company by the Company Appeal (AT) No.132 of 2023 and Company Appeal (AT) No.148 of 2023 Page 8 of 19 transferor or the transferee within a period of sixty days from the date of execution, along with the certificate relating to the securities, or if no such certificate is in existence, along with the letter of allotment of securities:
Provided that where the instrument of transfer has been lost or the instrument of transfer has not been delivered within the prescribed period, the company may register the transfer on such terms as to indemnity as the Board may think fit.
(2) Nothing in sub-section (1) shall prejudice the power of the company to register, on receipt of an intimation of transmission of any right to securities by operation of law from any person to whom such right has been transmitted.
(3) Where an application is made by the transferor alone and relates to partly paid shares, the transfer shall not be registered, unless the company gives the notice of the application, in such manner as may be prescribed, to the transferee and the transferee gives no objection to the transfer within two weeks from the receipt of notice. (4) Every company shall, unless prohibited by any provision of law or any order of Court, Tribunal or other authority, deliver the certificates of all securities allotted, transferred or transmitted--
(a) within a period of two months from the date of incorporation, in the case of subscribers to the memorandum;
(b) within a period of two months from the date of allotment, in the case of any allotment of any of its shares;
(c) within a period of one month from the date of receipt by the company of the instrument of transfer under sub-section (1) or, as the case may be, of the intimation of transmission under sub-section (2), in the case of a transfer or transmission of securities;
(d) within a period of six months from the date of allotment in the case of any allotment of debenture: Provided that where the securities Company Appeal (AT) No.132 of 2023 and Company Appeal (AT) No.148 of 2023 Page 9 of 19 are dealt with in a depository, the company shall intimate the details of allotment of securities to depository immediately on allotment of such securities.
(5) The transfer of any security or other interest of a deceased person in a company made by his legal representative shall, even if the legal representative is not a holder thereof, be valid as if he had been the holder at the time of the execution of the instrument of transfer.
(6) Where any default is made in complying with the provisions of sub-sections (1) to (5), the company shall be punishable with fine which shall not be less than twenty-
five thousand rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees.
(7) Without prejudice to any liability under the Depositories Act, 1996, where any depository or depository participant, with an intention to defraud a person, has transferred shares, it shall be liable under section 447."
16. Further, section 68(2) of the Companies Act, 2013 which is the provision regarding power of a company to purchase its own securities is also reproduced below for ease of reference:-
68. Power of company to purchase its own securities xx xx xx xx (2) No company shall purchase its own shares or other specified securities under sub-section (1), unless--
(a) the buy-back is authorised by its articles;
(b) a special resolution has been passed at a general meeting of the company authorising the buy-back:
Company Appeal (AT) No.132 of 2023 and Company Appeal (AT) No.148 of 2023 Page 10 of 19 Provided that nothing contained in this clause shall apply to a case where--
(i) the buy-back is, ten per cent. or less of the total paid-up equity capital and free reserves of the company; and
(ii) such buy-back has been authorised by the Board by means of a resolution passed at its meeting;
(c) the buy-back is twenty-five per cent. or less of the aggregate of paid-up capital and free reserves of the company: Provided that in respect of the buy-back of equity shares in any financial year, the reference to twenty-five per cent. in this clause shall be construed with respect to its total paid-up equity capital in that financial year;
(d) the ratio of the aggregate of secured and unsecured debts owed by the company after buy-back is not more than twice the paid-up capital and its free reserves: Provided that the Central Government may, by order, notify a higher ratio of the debt to capital and free reserves for a class or classes of companies;
(e) all the shares or other specified securities for buy-
back are fully paid-up;
(f) the buy-back of the shares or other specified securities listed on any recognised stock exchange is in accordance with the regulations made by the Securities and Exchange Board in this behalf; and
(g) the buy-back in respect of shares or other specified securities other than those specified in clause (f) is in accordance with such rules as may be prescribed:
Provided that no offer of buy-back under this sub- section shall be made within a period of one year Company Appeal (AT) No.132 of 2023 and Company Appeal (AT) No.148 of 2023 Page 11 of 19 reckoned from the date of the closure of the preceding offer of buy-back, if any."
17. We note that Kaashvi Parasher had filed an intimation under section 56 (2) of the Companies Act, 2013 on 27.1.2021, in which the relevant paragraphs wherein request for transmission of shares is given below:-
"To quote clause d) of the registered will, "That I bequeath all my movable and Immovable properties in favour of my Daughter Kaashvi Parasher. After my death my daughter Kanshvi Parashar SHALL have the exclusive right to enjoy my above mentioned movable and Immovable properties except my shareholding in Shanivi Constructions Pvt. Ltd. and shall have the complete authority to deal with my properties in any manner whatsoever including the sale of my properties. So far my shareholding in Shanivi Construction Pvt. Ltd. is concerned Kaashvi Parasher WOULD INHERIT MY SHARE in Shanivi Constructions Pvt. Ltd. as per actual shareholding at the time of my death. However, Kaashvi Parasher WOULD have no right to sell or alienate my shares in the market. Shanivi Construction Pvt. Ltd. would pay the amount equivalent to my shareholding within five years from my death. In case Shanivi Constructions Pvt. Ltd. FAILS TO PAY my share within five years, Kaashvi Parasher would have full right to dispose off the shares in open market. My elder daughter Kashish Parasher my wife Priti shall not be entitled to any share from any properties."
In view of the above, I have been requesting for the transmission of shares held by my father Late Shri. Gagan Parasher to me and enter my name as a member in the register of the company.
Despite repeated correspondence with respect to effecting transmission of the said shares, with Shri Gunjan Sharma, one of the director of the company, who also is my uncle, no Company Appeal (AT) No.132 of 2023 and Company Appeal (AT) No.148 of 2023 Page 12 of 19 action thereof has been taken so far by the company or any of its directors.
I am herewith making this application to the Company to effectuate a legal transmission of shares to my name within a month of receipt of this intimation as per provisions of clause (c) of Sub section (4) of Section 56 of the Companies Act, 2013.
I hereby agree to accept and hold the said shares in my name and also agree to be registered as a member in the Register of Members of the Company as per the memorandum and Articles of the Company and abide by the terms stipulated by my father late Shri. Gagan Parasher.
In addition of the above, I hereby submit the following documents to support my claim for transmission of shares held by the deceased:
1. Duly attested death certificate of the deceased shareholder.
2. Registered Will of the deceased.
3. Self-attested photo-id address proof of myself, my only sibling Kashish Parasher and my Mother Priti Parasher.
1 declare that information given above is true and correct to the best of my knowledge and that I am the only legal heir in respect of the share of the company held by the deceased above named.
I hereby request you to transmit the shares standing in the name of the deceased late Shri. Gagan Parasher to my name and enter my name Ms. Kaashvi Parasher as a member in the Register of Members of the Company."
18. Further, we also notice the 'no objection' provided by Ms. Kashish Parasher, elder daughter of Shri Gagan Parasher and Smt. Priti Parasher, which are extracted below:-
Company Appeal (AT) No.132 of 2023 and Company Appeal (AT) No.148 of 2023 Page 13 of 19 "I, Kashish Parasher, daughter of Late Shri. Gagan Parasher, do hereby declare that I have no objection whatsoever in the company transmitting the entire 45,000 Equity shares held by my father in favour of my only sibling Ms. Kaashvi Parasher, kindly record the transmission immediately. Please find self-attested ID proof attached herewith.
Place: New Delhi Dated: 27.01.2021 Sd/-
Kashish Parasher 1, Priti Parasher, do hereby declare that I have no objection whatsoever in the company transmitting the entire 45,000 Equity shares held by my Late Shri. Gagan Parasher in favour of my daughter Ms. Kaashvi Parasher, kindly record the transmission immediately. Please find self-attested ID proof attached herewith.
Place: New Delhi
Dated 27.01.2021 Sd/-
Priti Parasher "
19. Sub-section (2) of section 56 of the Companies Act, 1956, which is extracted above, provides that the company shall have the power to register on receipt of an intimation of transmission of any right to securities by operation of law from any person to whom such right has been transmitted. We note that the term 'transmission' has been distinguished from the term 'transfer' of securities in section 56 of the Companies Act, 2013. The import of the word 'transmission' is that when legal right accrues to any person regarding securities of a company by operation of law, such persons can file an intimation with the company in accordance with sub-section (2) of section 56 of the Companies Act, 2013 for transmission of such securities/shares in her/his name.
Company Appeal (AT) No.132 of 2023 and Company Appeal (AT) No.148 of 2023 Page 14 of 19
20. The present case is a case of 'transmission' of shares to the daughter of deceased Shri Gagan Parasher, as is clear and evident from the letter of intimation dated 27.1.2021 sent by Kaashvi Parasher to the Company. Clause (c) of sub-section (4) of section 56 stipulates that within one month from the date of receipt of intimation of transmission, the company shall deliver the certificates of the relevant securities to the concerned person. We further notice from the reply dated 22.2.2021 sent by the Company through its authorised signatory Abhinav Goyal that rather than considering the intimation to be for transmission of such shares, the company goes on a completely different track and states in reply that Kaashvi Parasher is not entitled for transfer of shares belonging to Sh. Gagan Parasher Ex-Director of Company in view of Last Will of Sh. Gagan Parasher. The reply further goes on to discuss the various clauses of the 'Will' and infers and states that Kaashvi Parasher is only entitled to receive the value of such shares and, therefore, not entitled to transmission of the said shares. Furthermore, the reply states that Kaashvi Parasher is being paid a sum of Rs.50,000/- per month, from two months after the death of Shri Gagan Parasher. The reply of the Company is to refuse the request for transmission permission of shares on a specious and legally unsustainable plea and so the company asks Kaashvi Parasher to withdraw the intimation letter, as she is not entitled for transfer of shares as per the last 'Will' of Shri Gagan Parasher.
21. The Learned Counsel for Appellants had emphasised on the condition regarding sale of said shares back to the company which is included in the Last Will of Shri Gagan Parasher to claim that Kaashvi Parasher is not entitled to transmission or transfer of the said shares. On the matter of transmission of shares, we Company Appeal (AT) No.132 of 2023 and Company Appeal (AT) No.148 of 2023 Page 15 of 19 notice that section 56 (2) of the Companies Act, 2013 stipulates that upon receipt of intimation of transmission of any right to securities by operation of law, the Company is required to register the said shares in the name of the person conveying the intimation. It is clear that section 56 of the Companies Act, 2013 makes a difference between 'transfer' and 'transmission' of securities and the present case is a case of transmission of securities. We are also of the view that there was no need for the Company to have interpreted or acted upon the provisions included in the Will of Shri Gagan Parasher, since the intimation under section 56 of the Companies Act was merely about transmission of said shares and not about execution of Shri Gagan Parasher's Will. In such a situation, it was not only undesirable, but also unlawful for the Company to have refused 'transmission' of said shares when other Class-I legal heirs of Shri Gagan Parasher had given explicit 'no objection' for transmission of the said shares in favour of Kaashvi Parasher. These 'no objections' were submitted by Kaashvi Parasher along with letter of intimation to the Appellant Company.
22. We note that the judgment of Hon'ble Supreme Court in the matter of Thulasidhara & Another versus Narayanappa & Others (supra) is regarding a family settlement, which was under
consideration in that matter. This judgment is distinguishable since in the present case there is no settlement under consideration. The judgment of this Tribunal in the matter of Amritsar Swadeshi Woollen Mills Private Ltd. vs. Vimal Krishan Khanna & Ors. (supra) is also not applicable in the present case, since that case related to transfer of shareholding of one party to other as per valuation report, and in that context, the Tribunal felt that the interest of the Company was Company Appeal (AT) No.132 of 2023 and Company Appeal (AT) No.148 of 2023 Page 16 of 19 paramount. On the contrary, in the present case, the issue is regarding 'transmission' of shares in accordance with legal right of a party and the working of the Company is not an issue under consideration.
23. The Learned Counsel for Appellant has also cited the judgment of Hon'ble Supreme Court in the matter of Navneet Lal Alias Rangi vs. Gokul and Others [1976 SCC (1) 630], wherein Hon'ble Supreme Court has laid down the principles of 'interpretation' of Wills. While noting this judgment of Hon'ble Supreme Court, we find that distinguishable for the reason that the present matter involves the issue of 'transmission' of shares held by a father to a legal heir and the issue of 'interpretation' of Will does not lie in the present case.
24. We also consider the argument of the Learned Counsel for Appellants that a settlement dated 26.2.2022 was entered into by Kaashvi Parasher, Kashish Parasher, their mother Priti Parasher and uncle Gagan Sharma. We are of the clear view that the settlement is not relevant when a letter of intimation under section 56 of the Companies Act, 2013 is under consideration. Moreover, the NCLT does not have the jurisdiction or power to go into the matter of settlement, when considering a letter of intimation under section 56 of the Companies Act, 2013. Further, the argument of the appellants that the Company is paying Rs. 50,000/- per month to Kaashvi Parasher to take care of her education is not at all relevant to the matter regarding transmission of shares, which is as per legal right of the applicant.
Company Appeal (AT) No.132 of 2023 and Company Appeal (AT) No.148 of 2023 Page 17 of 19
25. In the light of discussion detailed earlier, we come to the conclusion that the Company was wrong in sending the letter dated 22.2.2021 to Kaashvi Parasher. We are of the opinion that, on the basis of the material available, and as required under law, the company should have transmitted the said shares in the name of Kaashvi Parasher without getting into the issue of execution of the 'Will' or examining any 'settlement'. The point in the Last Will of Shri Gagan Parasher that interest of a third party has been created vis-à-vis Kaashvi Parasher, would be a matter to be decided by a court of appropriate jurisdiction and therefore, not an issue to be decided by NCLT when considering a case for transmission of shares.
26. With regard to Company Appeal (AT) No. 132 of 2023, we note that both the directors of the Company namely, Gunjan Sharma and Abhinav Goyal have preferred appeal in a matter that was quite clearly between the Company and Kaashvi Parasher. Why 'third party' like them should oppose the application of Kaaashvi Parasher is not explained in the appeal. In fact, we feel that both the Appellants have caused prejudice to the case/appeal of Kaashvi Parasher and dragged her into litigation for no ostensible or logical reason and to the detriment of the Kaashvi Parasher. We also note that the reply dated 22.2.2021 sent in response to the intimation letter dated 27.1.2021 was signed by the authorised signatory Abhinav Goyal, who seems to have some an axe to grind in ensuring that the said 45,000 shares are not transmitted in the name of Kaashvi Parasher. We are of the view that it is not only unlawful, but also abuse of the process of law for the Appellants in CA(AT) 132/2023 to file an appeal when the right of Kaashvi Parasher is in question. This litigation has not only meant Company Appeal (AT) No.132 of 2023 and Company Appeal (AT) No.148 of 2023 Page 18 of 19 unnecessary delay in Kaashvi Parasher receiving her lawful due, but has also made her to suffer monetary expenses and mental hardship. For the above stated reasons, we feel it would be just and fair that cost should be imposed on the Appellants in Company Appeal (AT) No. 132 of 2023 viz. Gunjan Sharma and Abhinav Goyal to the extent of Rupees One Lakh and Fifty Thousand each. This entire amount of Rupees Three Lakhs should be paid to the respondent Kaashvi Parasher as litigation cost within thirty days of the order.
27. On the basis of the detailed discussion as stated in preceding paragraphs, we are of the clear opinion that the NCLT has not committed any error in quashing the communication dated 22.2.2021, which is the reply to the intimation letter dated 27.1.2021. Further, the said shares should be transmitted in the name of Respondent Kaashvi Parasher within thirty days of this order.
28. With the above said directions and order regarding cost, both the appeals have been found to lack merit and are, therefore, dismissed.
(Justice Rakesh Kumar) Member (Judicial) (Dr. Alok Srivastava) Member (Technical) New Delhi 21st September, 2023 /aks/ Company Appeal (AT) No.132 of 2023 and Company Appeal (AT) No.148 of 2023 Page 19 of 19