Published on: December 29, 2023 at 12:40 IST
Court: High Court of Bombay
Citation: Harsha Nitin Kokate V. Saraswat Co-op. Bank Ltd. (2010)
Honourable High Court of Bombay has held that the nomination entails transfer of the property or beneficial payment by the Company to the nominee to obtain a complete discharge of its duty. It is held that once such transfer to the nominee; the nominee would hold it in Trust or the Estate. It is held that Legal Heir can make a claim towards the case.
4. The law relating to nomination is set out in 109A of the Companies Act pursuant to the amendment which came into effect on 31st October, 1998. It is common knowledge that prior to 1996 shares were not held in dematerialised form. Consequent upon the Dematting of the shares the Share Certificates in physical form are not mandatorily required to be issued by the Limited Companies listed on the Stock Exchanges. Shares can be transferred by word of mouth or on the Internet from person to person. Upon such transfer the membership rights of the holder of the shares changes. Since the share is an intangible movable property it is bequeathable estate. The nomination in respect of the shares is, therefore, important. Section 109A sets out the rights of the holder of shares to nominate as well as the rights of the nominees thus:—
Drafted By Abhijit Mishra