The case involves a dispute among the legal heirs and representatives of Jayant Shivram Salgaonkar over the distribution of his assets, including properties, fixed deposits (FDs), and mutual fund investments (MFs) mentioned in his will. The appellants, claiming to be nominees, argued that they were vested with the securities upon the testator’s death. Respondent no. 1 filed a suit seeking court supervision for administering the testator’s properties and injunctive relief against disposal by other parties.
The appellants contended that Sections 109A & 109B of the Companies Act, 1956, and Depositories Act, 1996, governed the nominations. The Single Judge rejected this, referencing other statutes and deeming the appellants fiduciaries despite having control. The Judge declared a prior case, Harsha Nitin Kokate, as per incuriam and emphasized that the nominee arrangement doesn’t override succession laws.
The appellants, dissatisfied, appealed. The Division Bench questioned the Single Judge’s rejection of Kokate, highlighting the need for clarity on the legal status of nominations. The case hinges on whether the statutory provisions displace succession laws and if the nominees act as successors or hold assets in a fiduciary capacity. The appeals were filed to challenge the Single Judge’s decision, setting the stage for a detailed examination of the legal principles involved.
In conclusion, the legal dispute revolves around the interpretation of Sections 109A & 109B of the Companies Act, 1956, and Bye-law 9.11.7 of the Depositories Act, 1996, in the context of nominations for assets belonging to the late Jayant Shivram Salgaonkar. The appellants, asserting their status as nominees, were challenged by the respondent no. 1 seeking court administration of the testator’s properties.
The Single Judge rejected the appellants’ arguments, declaring a prior judgment, Harsha Nitin Kokate, as per incuriam, and emphasized that the nominee arrangement does not override succession laws. The judge highlighted the fiduciary role of nominees despite having control over the assets.
The Division Bench, on appeal, questioned the Single Judge’s rejection of Kokate and sought clarity on whether the statutory provisions displace succession laws. The core issue is whether nominees act as successors or merely hold assets in a fiduciary capacity.
AREEBA, LLYOD LAW COLLEGE, First Year Legal Journalism intern at Legal Vidhiya.
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