The Hon’ble National Company Law Appellate Tribunal (‘NCLAT’) while deciding an appeal filed under section 421 of the Companies Act, 2013, by the legal heirs of a deceased shareholder held that Petition under section 241 of the Companies Act, 2013, cannot be preferred by the legal heirs of a deceased shareholder.
It was the case of the appellants that the deceased, who was the promoter and shareholder of respondent company, was persuaded by two Directors/shareholders of the company, to sell his entire shareholdings to them pursuant to which the deceased resigned from the post of the director and had transferred his entire shareholding to two of the Directors of the company at a throw away price of much less than the actual price.
Against the said transfer, another Director/shareholder of the company filed a company petition before the National Company Law Tribunal (‘NCLT’) for oppression and mismanagement on the grounds that these shares ought to have been allotted on pro rata basis to all 3 shareholders and the said transfer of shares made by deceased were held to be illegal. It was thus held in the said proceeding that the shares of the deceased be re-allotted to all the shareholders by duly following the procedure laid down in Companies Act and Articles of Association.
The heirs of the deceased shareholder then filed a petition under section 241 of Companies Act,2013, before the NCLT praying to set aside the transfer/allocation of share to the remaining shareholders and to grant permanent injunction against them. It was further argued by the appellants that since the said shares are to be reallotted, the legal heirs of deceased be given a fair consideration. The said petition was dismissed by the NCLT.
Aggrieved by the order of the NCLT the appellant filed an appeal to the NCLAT. On appeal the NCLAT noted that the grievance of the appellant was that since the transfer of shares was held to be illegal hence the legal heirs of deceased should get those shares and/or a fair price. However, the Hon’ble Appellate Tribunal noted that the issue which was contested and settled was only to whom such shares could be allotted and not that the sale made by the deceased was bad, and in that sense the allotment of shares only to one of the Director/shareholder was held to be illegal. The Appellate Tribunal further took note of the fact that the initial transfer was challenged only by one of the Director/shareholder and that too on the ground he should also get a slice of it, and the deceased never alleged/claimed any right on such shares after he had received the entire consideration.
The Appellate Tribunal thus dismissed the appeal filed by the heirs of the deceased and held that appellants have no locus to file petition under Section 241-242 under the Companies Act,2013 as they are not the member/shareholders of the Company.
Rashmika Narendra Patel v. Therm Flow Engineers (P.) Ltd.
[2024] 165 taxmann.com 235 (NCLAT- New Delhi)
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