JV GOKAL CHARITY TRUST, MUMBAI Vs. CONTREX PVT. LTD., MUMBAI
HIGH COURT OF BOMBAY
Jv Gokal Charity Trust, Mumbai
Contrex Pvt. Ltd., Mumbai
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(1.) On 19th September 2016, I pronounced judgment on two preliminary issues taken in this Motion-limitation and jurisdiction-and held for the Plaintiffs on both. Defendant No.2 appealed (now numbered as Appeal No. 106 of 2017). Admitting the appeal on 20th October 2016, the Division Bench said: We make it clear that admission of the appeal will not come in the way of the appellants in the notice of motion pending before Trial Court. In case the order of the learned Single Judge is against the interest of the appellants on the notice of motion to be heard, the said order will be stayed for four weeks so that the appellants can challenge the same and this appeal regarding maintainability and the other appeal to be filed in the above circumstances could be heard together. Accordingly, I then took up the main Notice of Motion for final hearing. B. Summary
(2.) The dispute is about the ownership of and title to 100 shares of the 1st Defendant held by one Ramanlal Gokal, who died on 22nd March 2007. The 2nd and 3rd Defendants are each the second-named holders on two blocks of 50 shares; Ramanlal Gokal's name is first in all the shares. In his Will dated 25th January 2005 and Codicil dated 28th June 2006, Ramanlal made no specific bequest of these shares. The Will contains a residuary clause in favour of Plaintiffs Nos.1 and 2, both registered charitable trusts.
(3.) The Plaintiffs say the two trusts are the legatees of all 100 shares under the residuary clause. Defendants Nos. 2 and 3 contend that as joint holders of the shares (each a joint holder on 50 shares), the ownership of the shares passes by survivorship. All joint holders hold equally, and all survivors take equally down to the last survivor. Once added as a joint holder to the shares, Defendants Nos. 2 and 3 cannot be ousted from such joint holding-not, at any rate, by a testamentary instrument, and a non-specific residuary legacy at that. It is not correct, these Defendants argue, that being joined as a holder only gives the company a quittance. Mr. Kadam for the Plaintiffs and Mr. DeVitre for the supporting Defendants say that since in India there is no rule of advancement-which in any case must be proved-the addition of a second name to a shareholding confers no right of co-ownership. A second-named holder who has paid proven consideration might acquire a divided, partible estate in proportion to the consideration paid; but one who pays nothing and merely has his name added acquires no rights at all of co-ownership, joint ownership or 'joint tenancy'. Mr. Chinoy's case is that if there is a second name, this is joint ownership and therefore the concepts of joint tenancy and survivorship would operate: Defendants Nos. 2 and 3 would succeed to the shares on Ramanlal Gokal's death. This is not, he says, a case of 'no consideration' as the Plaintiffs would have it; consideration can be other than money, and in this case, the consideration was the bringing into existence of a Family Arrangement to equalize holdings in the 1st Defendant between different branches of the Gokal family. This, in any case, is a matter that requires evidence. At a prima facie stage, Mr. Chinoy says, if the allegation is that the second-named holders paid no consideration, then the question arises of the first-named holder's intentions in order to determine if, on his death, there was or was not advancement.;
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