My mother had left 199 shares of a company at the time of her death in 1977. The company had issued 99 bonus shares in 1978 ie after her death, totally 298 shares which we were holding in 1978.After 1978, we had shifted from our native place. Hence we were not aware of the bonus shares issued between 1978 and 1990.
In 1990,I had applied for succession certificate for 298 shares and obtained from court .When I asked the company to transmit the shares in my name, the company asked me to amend the succession certificate to include the bonus shares issued in between. But my lawyer said that the succession certificate cannot be extended to include bonus shares but only for any other security left out /omitted at the time of applying for succession certificate.
Further my lawyer says that Succession certificate covering shares held by a deceased member on the date of his death would cover subsequent issue of bonus shares and no fresh succession certificate would be required .H e also said that succession certificate can be obtained only for assets held at the time of death and not for any accrual or additions made after death.
Please guide me for representing to the company or any other forum which please suggest, so that I can get the shares transmitted in my name at the earliest as the matter is prolonging for a very long time.
Asked in Business Law from Madurai, Tamil Nadu
1. Your lawyer is right, the prayer for the succession certificate should include all accruals on deposits and shares,
2. Ask the company about the said subsequent issue of bonus shares since succession of the shares have already been certified by the Court and certificate issued accordingly.
1) Application and certificate to contain details of debts and securities. Extension and amendment of the certificate—The debts and securities in respect of which a certificate is applied for must be detailed at length in the application and also in the certificate and the certificate must be limited in terms to the debts and securities specified in the application and also in the certificate—[Section 372, sub-section (1), clause (f) and Section 374].
2) At the same time, the Court is empowered (by Section 376) to extend the certificate, on the application of the holder thereof to any debt or security not originally specified therein, and otherwise to amend the certificate (Section 378).
3)In Arun Kumar Israni v/s Cipla Ltd it was held that Succession certificate covering shares held by a deceased member on the date of his death would cover subsequent issue of bonus shares and no fresh succession certificate would be required
1. The Succession Certificate can be granted even for the bonus shares issued subsequent to the demise of your mother.
2. You can apply for Succession Certificate for the bonus shares.