Delhi High Court
Rajkumar Devraj & Anr vs Jai Mahal Hotels Pvt Ltd & Ors on 12 December, 2012
Author: Indermeet Kaur
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on:05.12.2012.
Judgment delivered on12.12.2012.
+ CO.A(SB) 25/2011
RAJKUMAR DEVRAJ & ANR ..... Appellant
Through Mr. Vibhu Bhakru Sr. Adv. with
Mr.Abhishek K. Rao, Ms. Anjali
Varma and Ms. Meera Mathur,
Adv.
versus
JAI MAHAL HOTELS PVT LTD & ORS ..... Respondent
Through Mr. U.K. Chaudhary, Sr. Adv.
with Mr.Sanjay Sen and
Ms. Srishti Jain Singh, Adv.
Mr. Neeraj Kishan Kaul, Sr. Adv
and Mr. Vikas Singh, Sr. Adv.
with Mr.D. D. Singh, Ms. Nand
Devi Deka and Mr. Sanket, Adv.
for R-2.
Mr.Shyam Munjrani, Advocate
for R-4.
+ CO.A(SB) 27/2011
SMT. URVASHI DEVI & ORS ..... Appellant
Through Mr. Neeraj Kishan Kaul, Sr. Adv
and Mr. Vikas Singh, Sr. Adv.
with Mr.D. D. Singh, Ms. Nand
Devi Deka and
Mr. Sanket, Adv. for appellant
No. 2.
Co. A (SB) No.25/2011 Page 1 of 38
versus
M/S JAI MAHAL HOTELS PVT. LTD. ..... Respondent
Through Mr. Vibhu Bhakru Sr. Adv. with
Mr.Abhishek K. Rao, Ms. Anjali
Varma and Ms. Meera Mathur,
Adv.
+ CO.A(SB) 49/2011
RAJKUMAR DEVRAJ & ANR ..... Appellants
Through Mr. Vibhu Bhakru Sr. Adv. with
Mr.Abhishek K. Rao, Ms. Anjali
Varma and Ms. Meera Mathur,
Adv.
Versus
S.M.S INVESTMENT CORPORATION
PVT LTD ..... Respondent
Through Mr. U.K. Chaudhary, Sr. Adv.
with Mr.Sanjay Sen and
Ms. Srishti Jain Singh, Adv.
+ CO.A(SB) 50/2011
RAJKUMAR DEVRAJ & ANR ..... Appellants
Through Mr. Vibhu Bhakru Sr. Adv. with
Mr.Abhishek K. Rao, Ms. Anjali
Varma and Ms. Meera Mathur,
Adv.
versus
SAWARI MADHOPUR LODGE
Co. A (SB) No.25/2011 Page 2 of 38
PVT LTD & ORS ..... Respondents
Through Mr. U.K. Chaudhary, Sr. Adv.
with Mr.Sanjay Sen and
Ms. Srishti Jain Singh, Adv.
+ CO.A(SB) 75/2011
SMT. URVASHI DEVI & ORS. ..... Appellants
Through Mr. Neeraj Kishan Kaul, Sr. Adv
and Mr. Vikas Singh, Sr. Adv.
with Mr.D. D. Singh, Ms. Nand
Devi Deka and Mr. Sanket, Adv.
for appellant No. 2.
versus
SMS INVESTMENTS COPR. PVT. LTD. ..... Respondent
Through Mr. Vibhu Bhakru Sr. Adv. with
Mr.Abhishek K. Rao, Ms. Anjali
Varma and Ms. Meera Mathur,
Adv.
+ CO.A(SB) 76/2011
SMT. URVASHI DEVI & ORS. ..... Appellants
Through Mr. Neeraj Kishan Kaul, Sr. Adv
and Mr. Vikas Singh, Sr. Adv.
with Mr.D. D. Singh, Ms. Nand
Devi Deka and Mr. Sanket, Adv.
for appellant No. 2.
versus
SAWAI MADHOPUR LODGE PVT. LTD. ..... Respondent
Through Mr. Vibhu Bhakru Sr. Adv. with
Mr.Abhishek K. Rao, Ms. Anjali
Varma and Ms. Meera Mathur,
Adv.
Co. A (SB) No.25/2011 Page 3 of 38
CORAM:
HON'BLE MS. JUSTICE INDERMEET KAUR
INDERMEET KAUR, J.
1 These appeals are directed against the impugned order dated
16.03.2011 passed by the Company Law Board (CLB) whereby the
petition filed by the petitioners Devraj and Lalitya Kumari group under
Section 111 of the Companies Act seeking a rectification in the share
register of Jai Mahal Hotels Pvt. Ltd., Rambagh Place Hotels Pvt. Ltd.,
SMS Investment Corporation Pvt. Ltd. and Sawai Madhopur Lodge Pvt.
Ltd. (hereinafter referred to as the „companies‟) was dismissed.
2 Vehement submissions have been addressed by both the parties.
3 On behalf of the petitioner, it is pointed out that the succession
certificate issued by a competent Court of jurisdiction on 19.02.2009
was a conclusive piece of evidence on the basis of which the petitioner
group had sought a rectification in the share register of the company;
after the death of Jagat Singh, Maharani Gayatri Devi had on 19.02.2009
withdrawn her probate petition; it had been agreed that the shareholding
of Jagat Singh would be divided equally between the three legal heirs
namely Maharani Gayatri Devi, Dev Raj and Lalitya Kumari;
succession certificates to the said effect had been issued; there were
joint succession certificates in favour of Dev Raj, Lalitya Kumari and
Maharani Gayatri Devi. The succession certificates dated 08.05.2009
are documents which are a prima-facie proof of title of the petitioners to
the shareholding of Jagat Singh. The company refusing to enter the
names of the petitioner group inspite of notice had compelled to the
petitioner to file a petition under Section 111 of the Companies Act
before the CLB. The CLB has not appreciated the controversy in the
correct perspective; the said order is liable to the set aside. Further
submission being that after the death of Maharani Gayatri Devi by virtue
of her Will (dated 10.05.2009) her legal estate including her 1/3rd
shareholding in the respondent company has also been bequeathed
equally to Dev Raj and Lalitya Kumari. The respondent group has no
locus to challenge the Will of Maharani Gayatri Devi and the CLB
having returned a finding that because of the pendency of the aforenoted
objections to Maharani Gayatri Devi‟s Will, the shareholding could not
be transferred by the company in favour of the petitioner group suffers
from another infallibility and on this second count also the order of the
CLB is liable to be set aside.
4 On behalf of the respondent company, arguments have been
addressed by learned senior counsel Mr. U.K. Chaudhary. Attention has
been drawn to the prayers made in Co. A.(SB) No. 25/2011 as also in
Co. A. (SB) No. 27/2011; submission being that these prayers cannot
even otherwise be allowed; there is dispute about the title of the
shareholding and admittedly there being inter-se litigations pending
between the parties, the CLB in its impugned order has rightly
concluded that complicated question of fact cannot be gone into in a
petition under Section 111 of the Companies Act; in this background,
the impugned order calls for no interference. Reliance has been placed
upon (1998) 7 SCC 105 Ammonia Supplies Corporation (P) Ltd. Vs.
Modern Plastic Containers Pvt. Ltd.; submission being that the
connotation of the word „rectification‟ has been adjudicated upon by the
Supreme Court wherein it has been noted that a rectification is the
failure on the part of the company to comply with the directions under
the Act; it is reference to an error which has been committed and
something which ought not to have been done was done which requires
a correction; submission being that in this case because of the raging
controversy pending in the various inter-se litigations between the
parties, the CLB had rightly concluded that the rectification application
of neither party can be allowed; the companies in these circumstances
could not have rectified the share register. Further submission of the
learned senior counsel being that the letter which had been sent by the
petitioner group seeking a rectification of the share register was not
accompanied with the requisite documents and this was replied by the
company in its communication dated 22.07.2009; the petitioner group
still chose not to file requisite documents which included the succession
certificates. There is no fault on the part of the company.
5 Corroborative arguments have also been addressed on behalf of
respondent No. 3/Prithvi Raj. Attention has been drawn to the order of
the High Court dated 20.08.2008 passed in W.P.(C) No. 7524/2008;
submission being that the order passed by the trial Court on 19.02.2009
inspite of having knowledge of the stay order passed by a higher Court
operating against it is a nullity; it is non-est; such a defect cannot be
cured. Reliance has been placed upon AIR 1954 S.C. 340 Kiran Singh
and Others Vs. Chaman Paswan to support a submission that such a
defect in no scenario can be cured; this fact was rightly noted by the
CLB while returning a finding that in these circumstances, the
rectification of the members register could not be permitted in favour of
the petitioner.
6 Vehement submissions have also been addressed on behalf of
respondent no.2 Urvashi Devi. It has been pointed out that the order of
the CLB holding that complicated questions of fact cannot be gone into
in a petition under Section 111 of the Companies Act suffers from no
infirmity; there are various litigations pending interse between the
parties and it was keeping in view this gamut of the litigations that the
CLB had returned the aforenoted finding. Suit No. CS(OS) 496/2010
has been filed by Urvashi Devi for cancellation of the succession
certificate dated 08.05.2009; CS(OS) 870/1986 has been filed by Jagat
Singh seeking a partition of the properties of the family wherein the
defence of the respondent group is that Jagat Singh has already been
given in adoption to Maharaj Bahadur Ji on 02.12.1957. Even
presuming that he had bequeathed his property to his mother Gayatri
Devi in terms of Will dated 23.6.1996; Gayatri Devi could not have
passed on these properties to Dev Raj and Lalitya Kumari who were no
longer in the line of inheritance as Jagat Singh had gone outside the
family in terms of his adoption on 02.12.1957. Probate petition qua the
will of Maharani Gayatri Devi is also pending; the objector/respondent
having raised an objection that the said will as forged and fabricated;
submission being reiterated that complicated questions of fact relating
to the properties of Jagat Singh and Gayatri Devi are yet alive. Further
submission being that the Will of Jagat Singh (dated 23.6.1996) had
surfaced for the first time in 2006; this Will had dis-inherited his two
children Dev Raj and Lalitya Kumari; the intent of the testator had to be
honoured; by an indirect mode Maharani Gayatri Devi entering into a
settlement thereby bequeathing the properties of Jagat Singh in favour of
Dev Raj and Lalitya had gone against the intent of the testator which is
not permissible. Reliance has been placed upon AIR 1978 Delhi 86
Raghuvir Singh & Others Vs. Budh Singh; submission being that the
intention of the testator has to be given effect to, which has to be
gathered from the context of the reading of the whole Will which in this
case clearly intended to disinherit Dev Raj and Lalitya Kumari. In fact
the intent of a Will is to interfere with the normal line of inheritance
where the testator was desirous of it. For this proposition, AIR 1998
Delhi 390 Mathew Jacob Vs. Ms. Salstine Jacob and another and AIR
2004 SC 1772 Uma Devi Nambiar and Others Vs. T.C. Sidhan (Dead)
have been relied upon. Attention has been drawn to the stay order
passed by the Bench of the High Court on 20.8.2008 in Writ Petition
No.7524/2008; vehement argument being that when a stay order is
operating and the High Court having categorically directed the
proceedings in the Succession Case No.134/1988 to be stayed; the
settlement recorded by the Civil Judge on 19.02.2009 between Gayatri
Devi, Dev Raj and Lalitya Kumari in the aforenoted succession case is
an order which is void and a nullity; it has no value in the eyes of law; it
necessarily has to be ignored. Submission being that this argument of
the respondent had also been noted by the Writ Court while disposing of
the writ petition on 18.01.2011; this issue had been kept alive granting
permission to the appellant to take appropriate legal recourse which was
further endorsed by the Division Bench of the High Court on
17.02.2011. Reliance has been placed upon AIR 1967 SC 1386 Mulraj
Vs. Murti Raghonathji Majaraj to support this submission. Reliance has
also been placed upon (2010) 11 SCC 557 Manohar Lal (D) by Lrs. Vs.
Ugrasen (D) by Lrs. And Others to support the same submission.
Reliance has also been placed upon AIR AIR 1962 Pat 357 Motiram
Roshanlal Coal Co. (P) Ltd. Vs. District Committee and others; it being
reiterated that the legal position is well settled that an order of a superior
Court staying further proceedings in the Court below becomes operative
the moment it is made which suspends the power of the lower Court to
continue in proceeding with such a case; such an order if passed would
be illegal and void; there being a total prohibition. Even otherwise the
proceedings pending before the Probate Court were qua probate of a
Will; it was beyond the jurisdiction of the said Court to have recorded a
compromise on the Will. Reliance has been placed upon AIR 1931 All
745 Bishunath Rai Vs. Sarju Rai & Others as also another judgment of
the Kolkata High Court reported as AIR1991 Cal 166 Sushila Bala Saha
Vs. Saraswati Mondal; submission being that the provisions of the
Succession Act do not admit the incorporation of private terms into the
division of estate of the testator. The only order which could have been
passed by the said Court was either to allow the petition or to dismiss it.
No order in between i.e. an order of compromise could have been
recorded; for the said reason also the order dated 19.02.2009 is liable to
be set aside; the undisputed position at law being that a judgment
pronounced in probate petition is a judgment in rem; it can be
challenged by any third person. Reliance has been placed upon (1993) 2
SCC 507 Chiranjilal Shrilal Goenka (deceased) through Lrs. Vs. Jasjit
Singh and Others as also another judgment of the Apex Curt reported as
(2008) 1 SCC 267 Basanti Devi Vs. Raviparakash Ramprasad Jaiswal
to support this submission. Further submission being that in fact a suit
for declaration seeking a declaration of the succession certificate (issued
on 18.02.2009) to be declared null and void had been filed by the
respondent i.e. Suit No.32/2010 and this issue is yet sub-judice. Yet
another submission being that admittedly two joint succession
certificates had been issued on 19.02.2009 and Maharani Gayatri Devi
having since expired, the certificate has become inoperative; the validity
of the certificate which is now in the names of Devraj and Lalitya
Kumari is also questionable. To support this submission reliance has
been placed upon AIR 1941 Cal 663 Sukumar Deb Roy and Anr Vs.
Parbati Bala and Others; submission being that a fresh certificate will
now have to be obtained. Argument being that in this background the
CLB not entertaining the application of Dev Raj and Lalitya Kumari
under Section 111 of the Companies Act in no manner suffers from any
infirmity.
7 In rejoinder, the learned senior counsel for the petitioner has
relied upon (1991) 4 SCC 1 State of Punjab and Others Vs. Gurdev
Singh to support his submission that an order of a Court even presuming
it is not made in good faith is capable of all legal consequences; it is
valid unless it is set aside or quashed; this proposition has been cited to
answer the argument of the respondent that although the said order dated
20.08.2009 staying the proceedings in the succession Court had been
passed by a higher Court yet this order had admittedly been passed at
the behest and at the asking of Maharani Gayatri Devi; she was the sole
beneficiary of this order; it was not adversarial to any other person; in
these circumstances, the trial Judge having recording the common order
of settlement in the succession case and the probate case giving effect to
the compromise/arrangement arrived at between Maharani Gayatri Devi
and her two grand children Dev Raj and Lalitya Kumari and noting her
submission that she is not pressing her probate petition; both the
succession case and the probate case having disposed of by a common
order, in this factual scenario suffers from no infirmity.
8 At this stage, a specific query has been put to the learned counsel
appearing for the respondent group i.e. Prithvi Raj, Urvashi Devi and Jai
Singh as to how the counter appeals filed by them lie as they are seeking
a rectification of the share register of the companies in their favour when
admittedly they have not filed a single document in support of this claim
and their whole case is otherwise bordered on a submission that
objections qua the Will of Gayatri Devi are yet pending and the
respondent group themselves being the objectors in the said probate
petition (qua the Will of Gayatri Devi), it does not now lie in their
mouth to expound such an argument. There is no answer to this query.
9 Arguments have been heard and appreciated.
10 Record shows that Sawai Man Singh had three wives. Murdhar
Kanwar was his first wife from whom he had one son Lt. Col. Sawai
Bhawani Singh and a daughter Prem Kumar. Smt. Prem Kumar had one
daughter Urvashi Devi who is a respondent in the present case. Second
wife of Sawai Man Singh was Kishore Kumari. She had two sons Jai
Singh and Prithvi Raj. In this petition they have also joined hands with
Urvashi Devi to contest the petition of Devraj and Lalitya Kumari. The
third wife of Sawai Man Singh was Gayatri Devi. She had one son Jagat
Singh. Present appellants Devraj and Lalitya Kumari are the only two
children of Jagat Singh.
11 It is not in dispute that 99% of the shareholding of the company
was owned by Jagat Singh; only 1% of the shareholding of the company
was in the name of Prithvi Raj. Jagat Singh died on 05.02.1997. He had
left a Will dated 23.06.1996. This document is reproduced herein as
under:-
"My dear Mummy,
As you are aware, I have not been keeping too well. I telephoned Devraj and
Lalitya but as usual they refused to speak to me. I am very disturbed by the
childrens' attitude, no doubt influenced by their mother. I know that Priya will try to
grab my property through the children.
Therefore, on my demise, I hereby disinherit my children Devraj and Lalitya
from getting/claiming any part of my estate. I hereby bequeath all my moveable and
immoveable properties and assets to you solely.
My signatures is witnessed by the two signatories below."
12 This was in the form of a letter addressed by Jagat Singh to his
mother Gayatri Devi where the concern of the testator was that his
estranged wife Priya should not be able to grab his property through his
children; in these circumstances, he had expressed his intention to
disinherit his children Devraj and Lalitya Kumari from getting any claim
over his estate which was accordingly bequeathed solely to his mother
Gayatri Devi.
13 Succession case i.e. LA No. 134/1998 was filed by Gayatri Devi
seeking letter of administration qua the estate of her deceased son Jagat
Singh. In 327/2006 i.e. almost 10 years after the date of demise of her
son a probate petition was filed by her before the Court of the
Additional District Judge. Thereafter W.P.(C) No. 7524/2008 was filed
by Maharani Gayatri Devi in the High Court seeking a consolidation of
the aforenoted succession case i.e LA No. 134/1998 with the probate
petition No. 327/2006. Her two grandchildren Devraj and Lalitya
Kumari were arrayed as respondents. On 20.08.2008 which was the first
date of hearing, the following order was passed by the High Court:-
"Heard. Learned counsel for the petitioner.
The learned counsel for the petitioner has moved an application for grant of
interim stay order on the ground that this Court was pleased to issue notice to show-
cause to respondents on 05th August, 2008, returnable within four weeks; and,
thereafter they moved an application in the trial Court to adjourn the hearing or to
grant one month time to enable the petitioner to bring stay order from the High
Court but the said application has been rejected by the District Judge, Jaipur City,
Jaipur vide order dated 08.08.2008. He further submits that the case was fixed today
and the same has been adjourned for final arguments to be taken tomorrow and in
case the further proceedings of the trial court are not stayed then this writ petition
would become infructuous.
After considering the submissions of the leaned counsel for the petitioner, it
is directed that further proceedings of Succession Case No. 134/1998, pending in the
Court of District Judge, Jaipur City, Jaipur shall remain stayed till further orders.
The application dated 18.08.2008 stands disposed of. "
14 On 19.02.2009, statement of Gayatri Devi was recorded before
the District Judge, Jaipur that she (Gayatri Devi) does not press her
probate petition which was accordingly disposed of.
15 The order dated 19.02.2009 reads as under:-
"19.20.2009
On behalf of petitioner Rajmata Gayatri Devi Sh. G.K. Garg on behalf of
respondents No. 2 & 3 Sh. D.K.Malhotra, Advocate present.
On behalf of the petitioner Rajmata Gayatri Devi Sh. Vijay Singh Sharma,
Advocate file vakalatnama.
On behalf of respondent Devraj one application of compromise and copy of
settlement was filed on 07.02.2009. On behalf of petitioner Rajmata Gayatri Devi
today a reply t the same has been filed, in which she has submitted for acceptance of
the prayer of Sh. Devraj and has admitted the compromise & settlement dated
14.112008 arrived between the parties. According to reply keeping in view the
compromise/settlement, petitioner does not press the petition for grant of letter of
administration which may be disposed.
Sh. G.K. Garg, Advocate, present on behalf of petitioner, seeks permission to
withdraw his vakalatnama, which is granted to him.
I have considered the settlement dated 14.11.2008 between the parties and
also the application. In the settlement 1st party is Rajmata Gayatri Devi and 2nd
party are Maharaj Devraj and Rajkumari Lalitya. It has been settled between the
parties that they are ready to divide amongst themselves the estate of late Maharaj
Jagat Singh equally in 1/3rd share each and Rajmata Gayatri does not claim any
relief/claim/probate of the disputed Will dated 23.06.1996. In view of the settlement
between the parties, the petition NO. 327/2006 regarding letter of administration is
hereby dismissed consigned to record room."
"19.02.2009
"On behalf of petitioner Rajmata Gayatri Devi Sh. G.K. Garg on behalf of
respondents No. 2 & 3 Sh. D.K.Malhotra, Advocate present. For Sh Bhawani Singh,
Sh. Ramesh Sharma Advocate is present..
On behalf of the petitioner Rajmata Gayatri Devi Sh. Vijay Singh Sharma,
Advocate file vakalatnama.
On behalf of petitioner Devraj one application of compromise and copy of
settlement was filed on 07.02.2009 and the original settlement has been filed today.
On behalf of petitioner Rajmata Gayatri Devi today a reply t the same has been
filed, in which she has submitted for acceptance of the prayer of Sh. Devraj and has
admitted the compromise & settlement dated 14.112008 arrived between the parties.
According to reply keeping in view the compromise/settlement, petitioner does not
press the petition for grant of letter of administration which may be disposed.
Sh. G.K. Garg, Advocate, present on behalf of petitioner, seeks permission to
withdraw his vakalatnama, which is granted to him.
In this regard petitioner Rajmata Gayatri was examined before
Commissioner on dated 26.04.2005, in which has admitted the shares in the
properties of late Maharaj Jagat Singh of herslf, of her grandson Rajkumar Deviraj
and of granddaughter Rajkumat Lalitya to the extent of 1/3-1/3 equally.
I have considered the settlement dated 14.11.2008 between the parties and
also the application. In the settlement 1st party is Rajmata Gayatri Devi and 2nd
party are Maharaj Devraj and Rajkumari Lalitya. It has been settled between the
parties that they are ready to divide the estate of late Maharaj Jagat Singh amongst
themselves equally in 1/3rd share each and Rajmata Gayatri does not claim any
relief/claim/probate of the disputed Will dated 23.06.1996. Keeping in view the
settlement arrived between the parties it is ordered that on filing of by all three
applicants in accordance to the rule judicial fee to extent of their 1/3-1/3 share in
the estate mentioned in the petition succession certificate be issued in their favour to
extent of 1/3-1/3 share each.."
16 This order was passed in the probate petition and the succession
case in terms of the aforenoted settlement recorded between the parties
in terms of which 1/3rd of the estate of Jagat Singh would devolve on
each of the three parties i.e. Gayatri Devi, Devraj and Lalitya Kumari.
The Court recorded the statement of Gayatri Devi to the effect that she
does not claim any relief/claim/probate of the disputed Will of Jagat
Singh dated 23.06.1996. On the same day i.e. on 19.02.2009 orders were
passed both in the succession case as also in the probate petition; both of
which were disposed on 19.02.2009. On the same day two succession
certificates were issued in the name of the aforenoted three applicants.
These certificates dated 08.05.2009 were in the joint names of Maharani
Gayatri Devi, Dev Raj and Lalitya Kumari.
17 In terms of this settlement of 19.02.2009, Gayatri Devi on
27.04.2009 had further bequeathed her 1/3rd shareholding in favour of
her two grand-children Devraj and Lalitya Kumari and duly signed
transfer deeds were executed by her; communication to this effect had
been sent by Gayatri Devi to the Board of Directors of the companies.
The intention of Gayatri Devi to settle all disputes with her grand
children Devraj and Lalitya Kumari is further substantiated by her Will
dated 10.05.2009 wherein she had bequeathed all her properties
moveable and immoveable in favour of her two grand children Devraj
and Lalitya Kumari. This Will is the subject matter of challenge by the
respondent group (Jai Singh, Prithvi Raj and Urvashi Devi). Their locus
standi to challenge this Will is questionable. Relevant would it be to
state that in the application seeking impleadment (in W.P.(C) No.
7524/2008), the claim of the aforenoted respondents was only their
prayer to be declared as the legal representatives of Gayatri Devi; it was
never their case that they were the legal heirs of Gayatri Devi; their
locus standi to challenge this proceeding would thus be excluded. That
apart under Section 14 of the Hindu Succession Act, 1956, a female
hindu inherits a full blown estate; it is not a life estate; Gayatri Devi had
inherited the estate of Jagat Singh in terms of his Will dated 23.06.1996;
she was fully competent to dispose it off in the manner that she chose.
18 Further submission that the settlement arrived at between
Maharani Gayatri Devi and her grandchildren on 19.02.2009 was
against the intent of the testator as he intended to disinherit his children
is a mis-directed submission. The intent of Jagat Singh (original holder
of the disputed shares) was clear and unequivocal; this has to be
gathered from his desire which he had expressed in his Will dated
23.06.1996 which was in the form of a letter addressed to his mother.
Intent of the testator has to be gathered from a wholesome reading of the
document and the circumstances of the case. The concern of the testator
was that his estranged wife Priya should not grab his property and
should not be able to use their children Devraj and Lalitya Kumari as
intermediaries to get hold of his property. At the time of execution of
this Will, Devraj and Lalitya Kumari were only 17 years and 15 years of
age respectively. Both of them were minors were under the influence of
their mother which had been noted by the testator. This Will in fact
reflects the anguished state of mind of the testator; he was not well and
had an urgent need to address the reckonings which were going on in his
mind; his desire being that his estranged wife (of more than 20 years)
should not be in a position to grab his property through the device of his
children. This intent was manifested in an in-direct way; his estranged
wife not being permitted to obtain these properties through the medium
of their children; it was this which had weighed in the mind of the
testator at the time when he recorded his second paragraph in the letter;
which had disinherited his children; intent gathered being to debar his
wife from his inheritance; his grievance being directed against his wife
Priya.
19 On 01.05.2010, a suit (bearing No. 496/2010/32/2010) for
declaration was filed by the opposite group i.e.Prithvi Raj and Urvashi
Devi challenging the order dated 19.02.2009 (by virtue of which the
compromise/settlement had been arrived at between the Gayatri Devi
and her two grand-children Devraj and Lalitya Kumari and succession
certificates had been issued). This was a suit for partition, declaration
and permanent injunction. In the plaint after paragraph 2 up to paragraph
9 pages are missing for reasons best known to the respondent group
(who had filed this plaint in their defence). Para 12 avers that Jagat
Singh inspite of his adoption continued to have cordial relations with his
birth giving mother Gayatri Devi whom he always address as „mammi‟;
Jagat Singh accordingly willed his properties both moveable and
immoveable in favour of Gayatri Devi. Thereafter in the entire body of
the plaint, there is no mention of the alleged adoption. In this case for
the first time Jai Singh has set up a defence that Jagat Singh was adopted
by Maharaj Bahadur Ji on. 02.12.1957 and as such his children (Dev Raj
and Lalitya Kumari) are not entitled to inherit his estate as they are no
longer in the line of dependency from Gayatri Devi. Relevant would it
be to state that this was a defence set up by Jai Singh alone for the first
time in the written statement filed by him in 2011; it was never the case
of any person before this period that Jagat Singh had been adopted. This
defence, whatever may be its probative value in the suit would have no
bearing in this appeal. The interim application under Order XXXIX
Rules 1 & 2 of the Code of Civil Procedure seeking a staying of the
implementation of the order dated 19.02.2009.was pressed. This
application was disposed of on 28.07.2011. The Court had refused to
grant any interim injunction in favour of the plaintiffs/Prithvi Raj and
Urvashi Devi; the Court had noted that pursuant to the Will of Jagat
Singh (dated 23.06.1996), Gayatri Devi was the sole beneficiary; the
plaintiffs/Prithvi Raj and Urvashi Devi were not the affected parties;
they were not parties in the proceedings in the probate petition; they not
being the unsuccessful parties, there was no provision available to them
for challenging the order of the grant of a succession certificate; prima-
facie relief sought against the order dated 19.02.2009 was thus declined.
Their locus to challenge a settlement (amongst Maharani Gayatri Devi
and her two grandchildren) to which they were even remotely not
connected was rightly dis-allowed.
20 The next argument of the respondent is pitched on the order dated
20.08.2008 passed in W.P.(C) NO. 7254/2008. This order was passed at
the asking of the petitioner (Gayatri Devi). It was an ex-parte order
directing further proceedings in Succession Case No. 134/1998 pending
in the Court of District Judge, Jaipur City, Jaipur to remain stayed till
further orders. This writ petition was finally disposed of on
18.01.2011.At that time, Gayatri Devi was also no longer alive. The
application filed by Jai Singh, Prithvi Raj and Urvashi Devi seeking
impleadment and to be treated as the legal representatives of Gayatri
Devi had been considered. While disposing of this writ petition, the
Court had noted that in this application Jai Singh, Prithvi Raj and
Urvashi Devi had not claimed themselves as legal heirs of Gayatri Devi
but had only made a prayer to be taken on record as legal
representatives. There being a clear distinction between a legal heir and
a legal representative; a legal heir is a person who is entitled to the estate
of the deceased whereas a legal representative is a representative only
for the purpose of representation in legal proceedings.
21 This writ petition had accordingly been disposed of noting that it
had become infructuous in view of the fact that two suits i.e. Succession
Case No. 134/1998 and Letter of Administration No. 327/2006 which
were pending in the trial Court (of which consolidation had been sought
in this writ proceeding) already stood disposed of on 19.02.2009.
22 The submission of the learned counsel for the respondent that
since an ex-parte order had been passed on 20.08.2008 prohibiting the
court below to proceed further in Succession Case No. 134/1998 and as
such the order passed on 19.02.2009 in the said proceedings is a nullity
and void is a mis-judged submission. It was at the behest of the writ
petitioner (Gayatri Devi herself) that the ex-parte order had been
obtained by her in her own favour on 20.08.2008; she was the sole
beneficiary of the said order. This ex-parte order was even otherwise not
adversarial to any other person except the respondents i.e. Devraj and
Lalitya Kumari. It was not as if any other person was affected by this
order. The parties to the proceedings in W.P.(C) NO. 7524/2008 were
Dev Raj and Lalitya Kumar alone; as also in the proceedings before the
succession Court and the probate court where the settlement on
19.02.2009 was recorded. The respondents were not in any manner
connected with any of these aforenoted proceedings.
23 In this factual scenario, the submission of the learned counsel for
the respondents that the settlement dated 19.02.2009 is non-est and a
nullity on this count is too far-fetched. At best it can be an irregularity
which will not take away the jurisdiction of the Court which had passed
this order. In facts in Mool Raj (Supra) the Supreme Court while dealing
with a situation when an appellate Court has passed an order staying
execution proceedings/transfer proceedings in the court below, had
noted that the jurisdiction of the Court would not be ousted; it would
always remain; the prohibitory order of the higher Court would only
suspend the proceedings in the court below. The Court had considered
the impact of action taken subsequent to the passing of an interim order
in its dis-obedience; such a dis-obedience which was adverse to the
applying party based on the principle that those who defy a prohibition
ought not to be able to claim the fruits of their defiance; the party cannot
be allowed to take an unfair advantage. That apart the judgment of Mool
Raj and in fact all other judgments relied upon by the learned counsel
for the respondents in this context relate to proceedings where the
appellate court had stayed the proceedings and there was one party
whose interest was prejudiced by the continuation of the proceedings in
the Court below. In Manoharlal the appellant had not come to the court
with clean hands and not disclosed to the Court that he had been allotted
land in a commercial area by the GDA and the question that was
answered was that the act of the statutory authority in contravention of
the interim order of the Court could not be sustained. In Motiram, the
trial Court had issued summons for a commission when it had
knowledge of the stay order passed by the higher Court. The aggrieved
party had approached the Court in revision. In all these cases, there was
an aggrieved party who had brought this to the notice of the superior
Court. In this case, there is no aggrieved party. It is but obvious that in
these kinds of litigation one or the other party is prejudiced and it was in
this context that the said ratio had been returned that in such an
eventuality, a trial Court having knowledge of the stay order passed by
the higher court when proceeded to pass an order would qualify as a
non-est order. The judgment of Kiran Singh had raised a question on the
construction of Section 11 of the Suits Valuation Act; the question
posed before the Apex Court being that a decree passed by an
Appeallate Court which had the jurisdiction to entertain it, only by
reason of under valuation could be set aside on the ground that on a true
valuation, the Court was not competent to entertain the appeal. Question
of prejudice was gone into; no prejudice having been caused to the
appellant, the appeal had been dismissed. Findings returned are
inapplicable in the present scenario.
24 The facts are distinct in the present case. As noted supra, the
petitioner and the anticipated parties in the writ court had settled the
matter in the Court below; there was no involvement of any other person
except the persons who had arrived at a settlement on 19.02.2009; all
parties were, ad-idem; no party was aggrieved; the respondent group had
in fact no locus-standi to challenge the settlement. It did not prejudice
any other person. In this scenario, nothing prohibited Gayatri Devi from
entering into a settlement with the aforenoted respondents and getting
their statements recorded before the Court on 19.02.2009. This ex-parte
order did not create a hurdle to the extent that it would become a non-
consequential order.
25 Further vehement submission of the respondents in this context
being that the compromise/settlement arrived at inter-se between the
parties in the pending probate proceedings on 19.02.2009 is void for the
reason that in a probate petition, the Will either has to be proved or dis-
proved and no other order can be passed on such an application is again
a mis-argued submission. In this context, the observations made in AIR
1971 Orissa 103 Sakuntala Dasi Vs. Kusum Kumari Sarkar are useful to
answer this controversy in dispute are extracted herein below:-
"There is no doubt that the present petitioner who had applied in the court
below for probate must be equated with that of a plaintiff in a regular suit. While it
is true that in such cases where the applicant is an executor or executrix, a duty is
cast on such person to have the will probated, there is no method prescribed under
the law to compel such person to take steps for probating the will. The question is
once she has made the application, has the position so changed that a compulsion
can be attached to make her continue the proceeding? According to the learned
District Judge once the proceeding has commenced, on the principle that a duty is
cast on the court to determine about the due execution and attestation of the will the
proceeding cannot stop and must be continued and the person who has initiated the
proceeding cannot withdraw.
I hardly find any support for such a proposition. If whether to apply for probate or
not was within the option of the petitioner, whether to continue or not the
application would be equally within her option. On the principle that the plaintiff is
dominus litis in a litigation the matter must be left to his charge, otherwise the court
would be assuming a burden which it would in many cases find difficult to
discharge. Let us consider for instance a case where an application for probate is
made. For reasons best known to the petitioner he does not continue the case.
Normally such a case would go by default. But on the principle that the court has
the burden to determine the genuineness of the will if the court is required to
proceed and the petitioner no more appears and nobody appears to oppose the
proceeding by entering caveat, in what helpless position the court would be left?
Let us also visualise another case where the petitioner no more appears though once
he had applied for the probate but certain persons enter caveat and oppose the
probate. There may be also a case where the petitioner continues the proceeding ex
parte. If without the assistance of any party the court is called upon to continue the
determination by itself it would be an arduous job and on many occasions the
conclusion is likely to be contrary to what may have appeared to be the truth if the
case had been properly contested."
26 There is no dispute to the proposition that such a petition cannot
be compromised; it cannot be disposed of by a compromise. There is
also no dispute to the proposition that a judgment pronounced in a
probate proceeding is a judgment in rem; it is binding on the world at
large. However, the next principle is also clear; the plaintiff is the
dominus litus in a litigation and the matter has to be left to his charge;
he has to decide the fate of his case.
27 In this case, Gayatri Devi had filed the probate petition seeking
probate of the Will dated 23.06.1996 of her son Jagat Singh. However,
she chose not to press this petition and this is what has been recorded in
the order dated 19.02.2009; either such a case would be permitted to go
down in default or in terms of the statement made by the petitioner that
she is not pressing her petition; she has an option to get a closure of her
case which had happened vide order dated 19.02.2009. She did not press
her claim qua the Will.
28 It is also a matter of record that the suit filed by Jagat Singh
seeking a partition of his properties is pending. This suit was filed in the
year 1986 i.e. Suit No.870/1986. On 16.09.1998, a single Judge of this
Court had allowed the application for impleament of Dev Raj and
Lalitya Kumari (as legal heirs of deceased Jagat Singh); there was no
opposition to this application. On 15.12.1998, preliminary defendant
No. 4 (in the said suit) had moved an application to be transposed of as a
plaintiff; submission being that his rights in the suit properties are
similar to those of the plaintiff (Dev Raj and Lalitya Kumari). Prithvi
Raj had in fact continued to match his interest with Dev Raj and Lalitya
Kumari; he had made no claim to the property of Jagat Singh.
29 Section 381 comes to the aid of the appellant. Section 381 of the
Indian Succession Act reads as under:-
"381. Effect of certificate.- Subject to the provisions of this Part, the certificate of
the District Judge shall, with respect to the debts and securities specified therein, be
conclusive as against the persons owing such debts or liable on such securities, and
shall, notwithstanding any contravention of section 370, or other defect, afford full
indemnity to all such persons as regards all payments made, or dealings had, in
good faith in respect of such debts or securities to or with the person to whom the
certificate was granted."
30 Admittedly a joint Succession certificate was issued on
19.02.2009 in favour of Gayatri Devi, Dev Raj and Lalitya Kumari. A
succession certificate issued by the competent Court is a conclusive
evidence of the fact that the person in whose favour a succession
certificate has been issued is the successor of the moveable estate of the
deceased to that extent.
31 In AIR 1952 Allahabad 801 Ganga Prasad Vs. Mt. Saeedan and
Others while examining the provisions of the aforenoted section, the
Court had inter-alia noted as follows:-
"This section, therefore, raises a conclusive presumption against the debtors that
the person in whose favour a succession certificate is granted is entitled to receive
the debts specified therein. The debtors cannot challenge this fact. The presumption
raised by the succession certificate being conclusive and absolute it cannot be
displaced even upon the ground of a previous decision to a contrary effect."
32 In another judgment of the Court of the Orissa High Court in AIR
2002 ORISSA 114 Kinkar Santananda Sanyasi Vs. State Bank of India
and others, a dispute was raised about the inte-state succession of the
deceased testator and the petitioner who was asked to furnish a
succession certificate but he could not produce the same. The opposite
party produced the said certificate; the Court had noted that the Bank
had been left with no other option but to release the amount in favour of
the said third party. This was a case where the Charubala Das the
testator had allegedly executed a Will in favour of the petitioner;
although Charubala had died in 1993 but even up to 2002 no steps had
been taken by the petitioner to get the Will probated and nor any attempt
had been made to obtain succession certificate. The succession
certificate produced by respondent No. 3 had led to the release of the
money in his favour.
33 The judgment of Sukumar Deb Roy and Anr (supra) relied upon
by the respondent is wholly inapplicable. This was a case where one
Mrinalini had died leaving behind two married daughters and four un-
married daughters. Kamala applied for a succession certificate qua the
properties left by her mother. A joint succession certificate was issued
to three daughters. Thereafter Kamala died leaving behind her husband
and two sons who applied to the concerned Court at Faridpur for
succession certificate in respect of 1/3rd share of the estate belonging to
Mrinalini which had devolved upon their mother Kamala. Objection
taken was that a succession certificate already having been issued in
respect of the properties left by Mrinalini, no fresh certificate could be
granted. The facts of this case are wholly distinct and inapplicable to the
present situation.
34 The Articles of Association of the company have also been
perused. Articles 16 & 18 clearly stipulate as under:-
16. On the death of a member, the survivor or survivors, where the member was
a joint-holder, and his legal representatives where he was a sole holder shall be the
only persons recognized by the Company as having any title to his interest in the
shares.
18(i) Any person becoming entitled to a share in consequence of the death or
insolvency of a member may, upon such evidence being produced as may from time
to proper be required by the Board and subject to hereinafter provided, elect, either:
(a) To be registered himself as holder of the share; or
(b) To make such transfer of the share as the deceased or insolvent member
could have made.
35 The company was bound by its own Articles and could not have
taken a plea contrary to what is contained therein. On the death of the
original shareholder Jagat Singh, in view of his Will dated 23.06.1996
and the subsequent settlement arrived at between Gayatri Devi and Dev
Raj & Lalitya Kumari on 19.02.2009, 1/3rd shareholding of Gayatri
Devi vested in each of the aforenoted persons and thereafter after the
death of Gayatri Devi on 20.09.2009 pursuant to her Will dated
10.05.2009, the shareholding then devolved upon the petitioner group
i.e. Dev Raj and Lalitya Kumari who admittedly had a succession
certificate from a competent Court of law recognizing them as holders
of the aforenoted shares of the original holder Jagat Singh. In terms of
Section 381 of the Companies Act this evidence was conclusive for the
transmission of shares of the companies in favour of the petitioner
group.
36 All objections raised by the respondents are worth of no merit.
37 Reliance by the learned counsel for the respondent on the
judgment of Amonia Supplies Corporation is misplaced. The Apex
Court has held that in matters of rectification, it is the company Court
alone which will have jurisdiction; all the issues peripheral to
rectification would come within the domain of the company court; it
would be the court of exclusive jurisdiction in so far as the rectification
is concerned. It is only where fraud or forgery in holding the shares or
fraud or forgery qua the title to the said shares is alleged and prima facie
established only then the said issue will go beyond the jurisdiction of the
Company Judge and would have to be decided by a civil forum. It is the
nature of the allegations made in each case which will answer the
question as to whether the rectification is permissible by the Company
Law Board under Section 111 of the Companies Act or not.
38 Having considered carefully, the facts of the present case and the
nature of the allegations made by the respondents, it is clear that the
alleged disputes raised by the respondent group in so far as the
rectification issue is concerned are all illusory. Admittedly these shares
were in the name of Jagat Singh who had bequeathed them to his mother
Maharani Gayatri Devi and she in terms of a settlement arrived at
between her grandchildren followed by her Will had bequeathed the said
share holding thereafter in favour of her grandchildren i.e. the petitioner
group. The respondents who were the cousins of Jagat Singh are not
even claiming as legal heirs of Jagat Singh but only in their capacity of
his legal representatives; these allegations do not in any manner affect
the title of the shareholding of Jagat Singh. There is no involvement of
any fraud or forgery. Petition under Section 111 of the Companies Act
was well maintainable.
39 The CLB returning a finding apposite has committed an illegality
which is liable to be set aside. It is accordingly set aside. The order
dated 16.3.2011 is set aside; the member register of the companies be
rectified in the name of the petitioner group and the petitioners i.e. Dev
Raj and Lalitya Kumari be substituted in lieu of Jagat Singh.
40 As noted Supra, the appeals filed by the respondent group are
infructuous; they have supported the order of the CLB, their prayer in
the appeal that the shares register be rectified in their favour as
necessarily to be dismissed as even as per their own statement, they do
not have any document to support their submission that they are entitled
to the rectification of the member register qua these shares of Jagat
Singh in their favour.
41 Accordingly CA (SB) Nos. 25/2011, 49/2011 and 50/2011 are
allowed.
42 Co. Appeal (SB) Nos. 27/2011, 75/2011 & 76/2011 are
dismissed.
43 Costs are quantified at Rs.25,000/-.
INDERMEET KAUR, J
DECEMBER 12, 2012
A
