• Role of Company Secretary in Transmission of shares

My father in law was director in small pvt ltd company in rajasthan  share capital 20 lacs.  After his death,
My wife wrote to CS and MD/BOD  for transmission of shares in name of all legal heirs as per provision of law as he had died without leaving a will. CS and MD/BOD have not replied for more than a month.
Other legal heirs/brothers have stopped talking to her on this matter.  They however indicate they have some document and they will twist/win  the case. May be unregistered will or may be even forged one.
CS says on telephone that He is CS in practice and not full time company secretary and as such 
he has not much role. 

Kindly advise best course... Going to tribunal..Or complaining to Registrar of companies ...Or 
writing to CS in practice so that he performs his duty and atleast reply to our letter.... Also give me various options how to proceed in this case.
Asked 23 days ago in Business Law from Delhi, Delhi
1) i presume father in law died intestate . obtain succession certificate from district court in name of the legal heirs for the shares 

2) on basis of succession certificate and death certificate apply for transmission of shares in name of legal heirs 

3)Time limit for issue of share certificate on transmission (Section-56(4)): Every company, unless prohibited by any provision of law or of any order of any Court, Tribunal or other authority, shall, within One month deliver, the certificates of all shares transmitted after the application for the registration of the transmission of any such shares received.

4. Time Limit for Refusal of registration of Transmission:Provisions related to Refusal of registration and appeal against refusal is given in Section 58 of the Companies Act, 2013.Power of refusal to register transmission of shares is to be exercised by the company within thirty (30) days from the date on which the intimation of transmission is delivered to the company.

5. Time Limit for appeal against refusal to register Transmission by Private Company:As per section 58(3), the person who gave intimation of the transmission by operation of law,may appeal to the Tribunal against the refusal within a period of thirty (30) days from the date of receipt of the notice from the Company or in case no notice has been sent by the company, within a period of sixty (60) days from the date on which the intimation of transmission was delivered to the company.
Ajay Sethi
Advocate, Mumbai
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This is a dispute with regard to transmission of shares.
For this the case has to be filed in National Company Law Tribunal u/s 111 of the Companies Act.
Do not waste time anymore.
Devajyoti Barman
Advocate, Kolkata
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Hi
You should  apply for a succession certificate  as the cause of dispute pertains to Shares held by the deceased in a private limited company.

The application for succession certificate should be filed in the court having jurisdiction of the location  where the Deceased permanently resided when he was alive or alternatively in the courts having jurisdiction over the location of the private limited company in which your father in law held shares.

You can alongside the application can also ask for interim orders from the court restraining the company from dealing with the shares till the succession certificate is issued.

You should then forward the application for succession certificate  and a copy of interim order(if issued) by the court to the private limited company in which your father in law held the shares. 

National Company Law Tribunal does not have powers to decide on the succession issues but however NCLT will have powers to intervene if the company does not obey the orders so passed by the court in your application for succession certificate.

Hope this information is useful.
Rajgopalan Sripathi
Advocate, Hyderabad
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under section 56 of companies act 2013 company had to carry out transmission of shares within period of one month 

2) admittedly company has failed to carry out transmission within period of one month 

3) your wife should immediately file an appeal before Tribunal within period stipulated under section 58(3) of companies act ie 60 days from date of  receipt  of application for transmission by the company 
Ajay Sethi
Advocate, Mumbai
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One of the foremost duties of a Company Secretary is to handle the affairs related to shares.
According to the Companies Act, the Board of Directors is empowered by the Articles to decide on allotment, transfer and trans­mission of shares.
A company in its Articles of Association provides the procedure of allotment, transfer and transmission of shares. 
The Company Secretary, who is conversant with the procedure, helps the Board of Directors in the process of allotment, transfer and transmission of shares.
The Company Secretary, as an officer of the company and responsible in the process, shall be personally liable and punishable if there is any irregularity observed.
Transmission of shares means transfer of shares by operation of Law. For example, when a shareholder dies, his shares are transferred to his inheritor. The inheritor may hold the shares in his own name or before that he may transfer the shares to any other person.
The Company Secretary has to examine all the legal documents and evidences as to the claim made by a transferee. In case of inheritance, the Probate of Will (i.e., a copy of the Will certified by the Court) of the deceased shareholder entitling the inheritor to the shares shall be demanded. If there has been no Will then a Letter of Administration has to be received from the person claiming transmission.

The above being the position of law in this regard, the company secretary cannot deny to perform his role as a CS to the company in respect of transmission of your shares.
Whether he is part time or temporary or full time CS of the company, it is his duty to take steps to transmit the shares as per the procedures.
You may issue  a legal notice to the company secretary and BOPD seeking the relief and after exhausting the remedy with them you may either approach consumer forum or ROC or any other law enforcing authority in this regard. 
T Kalaiselvan
Advocate, Vellore
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My wife  wants to file case u/s 56,58 of companies act 2013 with NCLT as I want reply from management of company why they are not replying to her request for Transmission of shares. as it is small pvt ltd firm CS in practice has replied they are not part of management and matter to be dealt by management of company.

First issue a lawyer's notice demanding your relief and then think about initiating legal action as per law. 







 I presume  BOD is intentionally not replying with malafide intention,  This seems the way I can get reply . Management of company is same as other legal heirs of her deceased father. And keeping silent on this matter is flouting rules on acceptance or Refusal of  transmission of shares for which penalty clauses are there.
Kindly reply whether i should take up this approach....Or whether this approach is not at all advisable.?

The lawyer notice itself would bring some solution to this problem, if not you can proceed with the proposed legal action whichever suits best as per the prevailing circumstance.
T Kalaiselvan
Advocate, Vellore
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127 Consultations
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