In a notice of motion regarding duplicate share certificates and deposit of share value for a deceased shareholder, the Bombay High Court dismissed the petition. The Court held it cannot pass orders in testamentary jurisdiction on grounds of corporate negligence. A criminal case regarding the alleged fraud was pending.
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
T & I. J.
NOTICE OF MOTION NO. 548 OF 2004
IN
PETITION NO. 428 OF 2002
Mrs. Meera Ashok Adhye .. Petitioner.
vs.
Shakuntala Anant
Kotibhaskar & Anr. .. Respondents.
Mr. C.P. Doigirikar for petitioner.
None for Respondents.
CORAM : S.U.KAMDAR, J.
DATE : 5th August,2005.
P.C.
. The present notice of motion has been taken
out by the petitioner for the relief that the 2nd
respondent who is M/s. Hindustan Level Ltd.,be
directed to issue duplicate share certificates and
further the 2nd respondent be directed to deposit in
this Court the market value of the shares which were
belonging to the deceased. The 2nd respondent M/s.
Hindustan Lever Ltd., has filed an earlier affidavit
dated 18.3.2004 in which they have mentioned that
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there has been fraud committed and the shares have
been disposed of to the third parties. It has been
also mentioned that in view of the provisions of
Section 84 of the Companies Act, 1956 and Article 21
(c) of the Articles of Association, the 2nd
respondent cannot issue any duplicate share
certificates held by the deceased ceased to exist in
physical form consequent to their demat in
electronic form. The advocate for the respondent
no. 2 has forwarded an affidavit dated 3.8.2005 to
the petitioner, a copy whereof has been given by the
petitioner. On perusal of the said affidavit, it
has been clear that there is some fraud committed
and the shares of the deceased have been misused. A
criminal case is pending and investigations are in
progress. The learned counsel for the petitioner
however contends that this Court should pass
necessary orders in respect of the shares belonging
to the deceased because the respondent no. 2 has
been negligent and by virtue of their negligence,
the said shares have been lost. In the testamentary
jurisdiction, it is not possible to pass any such
order on the ground of negligence on the part of the
2nd respondent. The 2nd respondent is not concerned
with the shares of the deceased save and except it
is the company whose shares the deceased was
holding. It is equally not possible to pass any
order or decree in testamentary jurisdiction on the
ground of tortuous liability of the 2nd respondent
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in view of his negligence. In view thereof, motion
is disposed of. No order as to costs.
2. Copy of the affidavit of the 2nd respondent
is taken on record.
2 issues framed by the court
Whether the Court can direct the company to issue duplicate share certificates and deposit the market value of shares lost due to alleged fraud or negligence.
Whether the Court passes orders in testamentary jurisdiction on the ground of negligence or tortuous liability of the company regarding shareholder shares.
2 provisions across 2 enactments
Mrs. Meera Ashok Adhye
Shakuntala Anant Kotibhaskar
M/s. Hindustan Lever Ltd.
S.U. Kamdar
As recorded by the court registry
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