SOUMEN SEN,J. - (1.) Jadab Charan Law, since deceased, was holding 16.66% in the defendant no.1 company. The defendant no.1 is a closely held company of the Laws. The defendant no.1 is an existing company within the meaning of the Companies Act, 2013. Jadab Charan Law died on 4th August 2005. The shares, however, were not recorded in the name of the plaintiffs to the extent of 16.66% consequent upon the death of Jadab. Jadab was survived by his wife and two daughters. Both the daughters are residing abroad. None of the parties including the parties to the suit have applied for recording their names in the share register of the defendant no.1 company until October 2017. However, succession certificate was obtained in the year 2006.
(2.) The company in its communication dated 17th November 2017 has stated that in terms of Articles 49 and 57 of the Articles of Association and the Rules of the company, the plaintiff no.1 shall be recorded as the shareholder as successor of Jadab, in exclusion of the daughters of Jadab. In view of such communication, the plaintiff no.1 cannot have any grievance in the suit. Her right has been recognized and acknowledged by the defendants. The dispute that now arises is purely inter se as the widow and the daughters of Jadab have to decide what they would do with regard to such communication. Although the widow is a plaintiff in the suit and has relied upon the said communication, but it appears that the two daughters, of which one is the plaintiff no.2 in this proceeding, have objected to the exclusion of the daughters to be considered as shareholders who would otherwise succeed to the estate of the deceased under the provisions of the Hindu Succession Act.
(3.) Succession is by operation of law unless expressly excluded by a Will or similar instrument. There is an apparent conflict between the provisions of the Succession Act and Article 57 of the Articles of Association of the company. The company is required to act on the basis of the Articles, which is an agreement between the shareholders of the company. At a point of time when this company was incorporated, it was perceived that participation of daughters specially married daughters in the company may not be desirable and that is why it was restricted to the descendents in the male line or wife or widow. The right of other female members is not recognized. Such a clause in the present context would appear to be patriarchal and chauvinistic.;