The Supreme Court underscores that the nomination procedure outlined in the Companies Act does not override the principles of succession laws

Case: Shakti Yezdani & Anr. V Jayanand Jayant Salgaonkar & Ors.

Coram: Justice Hrishikesh Roy and Justice Pankaj Mithal

Case No.: CIVIL APPEAL NO. 7107 OF 2017

Court Observation: “Additionally, there is a complex layer of commercial considerations that are to be taken into account while dealing with the issue of nomination pertaining to companies or until legal heirs are able to sufficiently establish their right of succession to the company. Therefore, offering a discharge to the entity once the nominee is in picture is quite distinct from granting ownership of securities to nominees instead of the legal heirs. Nomination process therefore does not override the succession laws. Simply said, there is no third mode of succession that the scheme of the Companies Act, 1956 (pari materia provisions in Companies Act, 2013) and Depositories Act, 1996 aims or intends to provide.”

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Keywords

The Supreme Court underscores that the nomination procedure, Companies Act, succession laws

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