JAI MAHAL HOTELS PVT. LTD Vs. RAJKUMAR DEVRAJ

JUDGEMENT

(1.) Leave granted. The question raised in these appeals relates to the scope of power under Section 111 of the Companies Act, 1956, to direct rectification in the share register of a company. The question has to be examined in the context of correctness of the view taken in the impugned order passed by the High Court directing rectification at the instance of Respondent No.1-Rajkumar Devraj and Respondent No.2-Rajkumari Lalitya Kumari (the "DR Group"), who are the son and daughter respectively of late Maharaja Jagat Singh ("LMJS") .

(2.) LMJS held shares in M/s. Jai Mahal Hotels Pvt. Ltd., M/s. Ram Bagh Palace Hotels Pvt. Ltd., M/s Sawai Madhopur Lodge Pvt. Ltd. and M/s. S.M.S. Investment Corporation Pvt. Ltd. He died on 05th February, 1997 leaving behind a Will dated 23rd June, 1996 in favour of his mother Gayatri Devi ("GD"). Succession certificate dated 19th February, 2009 was issued by the District Judge, Jaipur jointly in favour of GD and DR Group. GD executed transfer deed dated 27th April, 2009 in favour of DR Group. She also executed Will dated 10th May, 2009 in favour of DR Group. She died on 29th September, 2009. Vide letter dated 15th July, 2009, DR Group claimed transmission and transfer of shares in their favour on the basis of succession certificate dated 19th February, 2009 issued by the District and Sessions Judge, Jaipur (Civil), transfer deed dated 27th April, 2009 executed by their grand mother Gayitri Devi ("GD") along with revalidation of the letter issued by the Registrar of Companies.

(3.) The application having not been accepted by the Company, the DR Group filed appeals before the Company Law Board ("CLB"), New Delhi. Urvashi Devi, grand daughter of husband of GD from another wife ("UD Group") filed application for impleadment stating that the succession certificate was a nullity. She accepted validity of Will dated 23rd June, 1996 executed in favour of GD by LMJS but contested the succession certificate. It was her further case that DR Group had no right of succession in view of Will dated 23rd June, 1996 and they were also not heirs of GD as LMJS was adopted in another family. Further stand was that since at the instance of GD, proceedings were stayed, succession certificate could not be granted even at her instance. Stay granted by the High Court was in a petition seeking consolidation of a probate case and succession certificate. Section 370 of Succession Act was also invoked. It was also submitted that the settlement which was the basis of succession certificate was not genuine. Her Will dated 10th May, 2009 was also contested. Urvashi Devi, Prithvi Raj and Jai Singh also sought transfer of shares in their favour claiming as heirs of GD. It was submitted that GD could not enter into any settlement contrary to the Will dated 23rd June, 1996. Further contention was that she died intestate on 29th September, 2009 and that DG has been disinherited by LMJS in his Will dated 23rd June, 1996.