### Legal Heir Entitlement to Share Transmission and Section 244 Maintainability Despite Disputed Gift Deeds

The Appellant challenged an interim order dated 13.02.2026 passed by the NCLT, New Delhi, which held that Respondent Nos. 1 and 2 (widow and daughter of Late KJS Ahluwalia) were entitled to the transmission of 55,97,768 equity shares (21%) in M/s KJS Cement (I) Limited.

The Respondents had filed a petition under Sections 241-242 of the Companies Act, 2013, alleging oppression and mismanagement.

The Appellant contended the petition was non-maintainable as the Respondents were not "members" on the date of filing, claiming the shares had been gifted to the Appellant’s wife in 2017 via a Power of Attorney (PoA) dated 09.08.2000.

However, the company's financial statements for 2021-22, signed by the Appellant, continued to show the deceased as the owner.

1. Whether legal heirs of a deceased shareholder can maintain a petition under Sections 241-242 of the Companies Act, 2013, even if their names are not yet entered in the Register of Members.

2. Whether the NCLT has the jurisdiction to decide on the validity of a Gift Deed and Power of Attorney within summary proceedings for oppression and mismanagement.

3. Whether the specific Power of Attorney (2000) authorized the Appellant to execute a Gift Deed of shares in favor of his own wife in 2017.

The Court applied Section 244 of the Companies Act, 2013, regarding the eligibility threshold for filing oppression and mismanagement petitions.

It relied on *M/s World Wide Agencies Ltd. v. Margarat T. Desor (1990)*, which establishes that legal representatives of a deceased member represent the estate and can maintain a petition to protect that estate.

The Court further applied the principle from *Shailja Krishna v. Satori Global Ltd. (2025)*, holding that NCLT has full jurisdiction to decide the validity of a gift deed if it is central to the allegation of oppression.

It also referenced *Adesh Kaur v. Eicher Motors Ltd (2018)* regarding the principal-agent relationship between a company and its depository participants in share transmissions.

The Tribunal reasoned that since succession is not kept in abeyance, the estate of the deceased vests in the legal heirs immediately upon death.

It found that the Appellant’s reliance on the 2000 PoA was flawed, as the document was restricted to managing properties in Satna, MP, and did not authorize gifting shares of a Delhi-based company to the PoA holder’s wife.

The Tribunal noted the "suspicious nature" of the 2017 Gift Deed, as it was never acted upon during the deceased’s lifetime, nor were the shares updated in the company’s internal records or RoC filings.

The NCLT correctly exercised its jurisdiction to prima facie invalidate the Gift Deed because the Appellant (as director) produced financial statements as late as 2022 showing the deceased as the rightful owner.

Furthermore, the technical objection regarding dematerialized shares was rejected, as the company cannot evade its statutory obligation to transmit shares under Section 56(4)(c) by citing the Depository Participant.

The Appeal was dismissed as devoid of merit.

The Tribunal confirmed that the maintainability requirement under Section 244 was satisfied both by numerical strength and shareholding value (31.84%), and alternative waiver was granted by NCLT in any event.

The Appellant was directed to follow the prescribed procedure for registration of the Respondents as members.