Positiveedge Technology Pvt Ltd & Anr vs Asmita Katdare & Anr

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI Company Appeal (AT) No. 177 of 2020 (Arising out of Impugned Order Dated 26.02.2020 passed by Hon'ble National Company Law Tribunal, Bengaluru Bench in C.P No. 196/BB/2019)

In the matter of: 1. Positiveedge Technology Pvt. Ltd Through its Director and Authorized Signatory Suresh Singh Sainger No.597, Maple, 15th Cross, Ring road, 6th Phase, J.P.Nagar Bengaluru, Karnataka - 560017 ...Appellant No.1

2. Shivendra Singh Sainger Through his Power of Attorney Holder Suresh Singh Sainger C-383 (SFS), Sheikh Sarai, Phase- 1. Malviya nagar, Delhi - 110017 ...Appellant No.2

Vs. 1.Asmita Katdare W/o Late Santanu Mondal, 1933, Palmer, Dr.Pleasanton,CA94588, United States of America C/o Mrs. Rekha Katdare W/o Late Mr. Ravindra katdare, No.61/33, Raja Griha, Bharat Niwas Colony Errandwana, Pune, Maharashtra - 411004 ...Respondent No.1

2.Siona Mondal (Minor-Through her mother And guardian Asmita Katadare) D/o Late Santanu Mondal, 1933, Palmer, Dr. Pleasanton, CA 94588, United States of America Also at: C/o Mrs. Rekha Katdare

Company Appeal (AT) No. 177 of 2020 2

W/o Late Mr. Ravindra katdare, No.61/33, Raja Griha, Bharat Niwas Colony, Errandwana, Pune, Maharashtra - 411004 ...Respondent No.2

Present: For Appellant: Mr.Sharukh Ejaz and Mr. Nilotpal Bansal Advocates. For Respondent: Mr. Manu Kulkarni, Mr. Saransh Jain, Mr. Shloka Narayanan, Mr. Tejpal Singh Rathore, Advocates. Poovayya and Co.

DR. ASHOK KUMAR MISHRA, TECHNICAL MEMBER

1. The present appeal is preferred under Section 421 read with Section 58

and 241 of the Companies Act, 2013 against the impugned order dated

26.02.2020 passed by National Company law Tribunal, ('for short

Tribunal') Bangalore Bench in CP No. 196/BB/2019.

2. The Appellant is aggrieved by the impugned order of the Tribunal as the

Tribunal has directed to the Appellant No.1, Company to give effect to the

transmission of shares of late Mr. Santanu Mondal, the deceased

Director and Shareholder of Appellant No.1 Company in favour of

Respondents by rectifying its register of members and also to pay all

consequential benefits on par with other shareholders with effect from

01.05.2017.

3. The Tribunal has passed the impugned order dated 26.02.2020 as the

Appellant Company is exercising arbitrary powers conferred on the

Company Appeal (AT) No. 177 of 2020 3

Company and its Directors as par Article of Association of this Company

and it amounts to oppression. The deceased Director, Mr. Mondal died

on 18.04.2015 and the Respondents submitted all requisite documents

as earlier as on 01.04.2017 hence they are deemed to be sharesholders

of the Appellant Company w.e.f. 01.05.2017 and are also entitled for all

consequential benefits on par with other shareholders of the Company

and have also observed that succession certificate is required to be

produced only when succession is in dispute and not supported by

relevant evidence.

4. The Appellant against the impugned order has prayed for setting aside

the impugned order dated 26.02.2020 passed by the Tribunal.

5. The Appellant has made the following submissions:

a. The Appellant No.1 is a Private Limited Company, the Appellant No.2

is a Director of the Appellant No.1 Company since 2nd November,

2009. The deceased Director, late Mr. Santanu Mondal, was an active

shareholder and a vigilant Director of the Appellant No.1 Company

who passed away on 18.04.2015 in United State of America.

Respondent No.1 is wife of Late Mr. Mondal while Respondent No.2 is

minor daughter of Late Mondal. It is also stated that Late Mr. Mondal

has surviving parents.

b. Late Mr. Santanu Mondal was also a Member of another Company in

USA Positiveedge Solutions LLC, a sister concern of Appellant No.1

Company Appeal (AT) No. 177 of 2020 4

Company in USA. The Second Appellant on 20.12.2016 has

purchased the shares of the respondents at an agreed consideration

in respect of the shares of the sister concern i.e. Positiveedge Solution

LLC.

c. The Appellants are alleging that the respondents are putting pressure

on the Appellants for transmission of 5000 equity shares erstwhile

held by Mr. Mondal in the Appellant No.1 Company without

complying with the Indian Laws Intestate Succession. The Appellants

have also stated that as per the laws of Intestate Succession

Application in the State of California, USA the surviving spouse and

surviving issue exclude all other possible heir to the state of the

deceased by as per Indian Law for Intestate Succession to the

property of the Hindu, the mother of the deceased is also a class-I heir

and thus inherits alongwith surviving spouse and issues of the

deceased. As per the Appellant, the mother should have been given a

share and show also a succession certificate is required. The

Appellants have also stated that the Article of Association of the

company is conferring discretion upon the Board of Directors in such

transmission matters. Since the Appellant has failed to provide

succession certificate so they have not agreed for the transfer of

shares.

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d. The Appellants have also raised that the Tribunal has decided "Civil

Right of inheritance of the respondent qua the shares held by the

deceased members". It is a settled principle of law that such an

adjudication regarding the rights of inheritance can be made only on a

civil suit filed for such adjudication before Civil Court of competent

jurisdiction and have cited certain judgments. The Tribunal has

entered into the area of discretion granted to the Board of Directors.

e. Since the Respondents have not produced documents regarding

relinquishment of the right of inheritance in the deceased shares on

behalf of mother of Mr. Mondal. Hence, the Company cannot transmit

the shares to the Respondents.

3. The Respondents have made the following submissions:

a. The Respondents have alleged that the Appellants have raised several

new factual as well as legal submission before this Appellant Tribunal

for the first time which were not raised before the NCLT and thereby

the Appellants protracting these proceedings. Accordingly, they have

submitted the documents filed by the Appellant before NCLT.

b. The Respondent No.1 and 2 are wife and daughter of late Mr. Santanu

Mondal who was holder of 50% shares of Appellant No.1 Company

until his untimely demise on 18.04.2015.

c. The Appellants have already got the shares purchased of Respondents

transferred in the US Company based at California without any

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problem and accepting the fact that the Respondents were the legal

heir of late Mr. Mondal and therefore, entitle to deal with his assets.

After repeated request to the Appellant company and the Appellant

Director since 20.01.2017, the shares were not transmitted then they

have approached the Tribunal on 09.10.2019 and the Tribunal after

hearing the parties have passed the impugned order granting relief to

the Respondents.

4. The Respondents have also alleged that the Appellants have raised new

grounds given hereunder:

a. The mother of Late Mr. Mondal is also a legal heir of Mr. Mondal and

therefore, the Respondents are not the sole legal heirs entitled to the

transmission of the shares. The Respondents have clarified that the

mother of Mr. late Mondal who is alive and she has released her rights

in the 5000 shares held in her son's name as far as back on

25.12.2015 by way of a letter to the Respondents.

b. It is also true that Appellant No.2 and late Mr. Mondal were close

friend and the Appellant was also present at the time of demise of

Late Mondal where his parents were also there. They were together in

the ceremony of demise of Mr. Mondal. The Respondents have gone

ahead to the extent that in spite of all this Shares can be transmitted

in the name of Respondent No. 1 and 2 as well as the mother of late

Mr. Mondal.

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c. The Appellants have failed to provide any valid reason not to transmit

the shares when all the relevant documents as required by the law

has provided. They have also submitted as per section 430 of the

Companies Act, 2013 that Civil Court have no jurisdiction in respect

of any matter which the Tribunal or the Appellate Tribunal is

empowered to determine by or under this act or under any other law

for the time being enforce.

5. We have carefully gone through the various submissions made by the

parties and are observing as follows:

a. It is very much clear that both the Appellants and the Respondents

are known to each other for a long time and knows each other families

also. It is not in dispute that the Appellant No.2 has purchased the

share of California, US based Company on the same identity from the

Respondents. It is also not in dispute that in the objections filed by

the Appellant before the Tribunal, they have not raised the issue of

mother as an inheritor. The Appellants (Respondent at Tribunal) have

raised only the issue of production of probate and appropriate legal

heir Certificate from Respondents at Tribunal. The issue of mother of

Late Mr. Mondal, legal heir was not raised at Tribunal and hence a

new ground. In any case the mother has already released her rights

as far as back on 25.12.2015 by way of a letter. Even the

Respondents are agreeable that let the shares be transmitted in the

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name of the all three (mother, wife and daughter). Identity is not

denied, he cannot take a plea topsy-turvy. He is prohibited by his

conduct-estoppel by conduct.

b. Section 115 of the Evidence Act, 1872 speaks as follows:

"Section 115. Estoppel - When One person has, by his declaration,

act or omission, intentionally caused or permitted another person to

believe a thing to be true and to act upon such belief, neither he nor

his representative shall be allowed, in any suit or proceeding between

himself and such person or his representative, to deny the truth of

that thing."

c. In the present case the Appellant company have not assigned a

tenable or sound reason as well as taken the correct approach to the

issue of transmission. The appellant himself has purchased the

shares of the respondents of USA based company at a consideration

on the same plea, no doubt, but taking a different plea in India and

without communicating in explicit terms when this fact was known to

the Appellant no.2 since the date of death of Late Mondal or earlier.

Indian Evidence Act, 1872 does not permit taking one stand at one

place & a different stand at other place.

d. Companies Act, 2013 vide chapter IV specifically regulates the

mechanism for Transfer & Transmission of Securities. Hence, as per

Company Appeal (AT) No. 177 of 2020 9 Section 430 of the Companies Act, "Civil Court not to have

Jurisdiction" on such issues.

6. In view of the above observations, we do not find any merit in the case

and we uphold the order of NCLT, Bengaluru Bench. The Appeal is

dismissed. No order as to costs.

[Justice Jarat Kumar Jain] Member (Judicial)

[Dr. Ashok Kumar Mishra] Member (Technical)

New Delhi 18th November, 2020 RK

Company Appeal (AT) No. 177 of 2020