Krishan Lal Garg vs. Investor Education And Protection Fund - (High Court of Delhi) (18 Dec 2020)
Rule which creates a disability, even though procedural in nature, can only have a prospective effect
Present petition has been filed by the Petitioner praying for a direction, order or writ in the nature of mandamus or any other appropriate writ directing the Respondent No.1 to refund the shares and unpaid dividend to the Petitioner.
It is the case of the Petitioner that, the Petitioner is the beneficiary of the Will dated 25th March, 1999 of his brother with respect to 6,200 shares of Radico Khaitan Limited. The said shares, on remaining unclaimed had been transferred by the company to the respondent no. 1. The Petitioner vide letter dated 14th November, 2018 applied to the Company for transmission of the said shares. Thereafter, by a certificate, an Entitlement Letter was issued by the Company in favour of the Petitioner with respect to the said shares. The Petitioner thereafter on 23th August, 2019, applied to the Respondent no. 1 for refund of the above shares and the unpaid dividend relating thereto, deposited by the Company with the Respondent no. 1. The Respondent no. 1 required the Petitioner to produce a Registered Will in support of his claim. The Respondent no. 1 called upon the Petitioner to produce succession certificate or probate of the Will or letter of administration or a Court Decree duly notarized, in support of his claim. The Petitioner claimed that, the Petitioner did not require the Will to be probated under the Indian Succession Act, 1925. However, as the Respondent no. 1 insisted on the same, the present petition was filed.
The requirement of a probate is contained in Clause 2.3 of Schedule II of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2019 and relates to Rule 6(vi) of the said Rules. Apart from the fact that the above Rules, 2019 has been expressly made to be applicable only with effect from 20th September, 2019, when the application of the Petitioner already stood filed and was pending, Rule 2.3 itself indicates that the same shall be applicable as on the date of the application.
As held by the Supreme Court in Hitendra Vishnu Thakur vs. State of Maharashtra, a Rule which creates a disability, even though procedural in nature, can only have a prospective effect. Therefore, the said Rule would not apply to the facts of the present case and to the application of the petitioner. The application of the Petitioner had to be considered by the Respondent no.1 in accordance with the Rules as were prevailing on the date of the application.
It is not the case of the Respondent no.1 that as on the date of the application, the Petitioner was required to produce probate of the Will or a Court decree in its favour. In that event, the insistence of the Respondent no.1 on the Petitioner producing probate of the Will or a Decree in terms of Clause 2.3 of Schedule II of the Rules cannot be sustained. As there is no other objection to the release of the shares and the dividend in respect thereof in favour of the Petitioner, the Respondent no. 1 is directed to release the same to the Petitioner within a period of four weeks from today. Petition allowed.
Tags : SHARES RELEASE DIRECTION