CASE DETAILS v. JAYANAND JAYANT SALGAONKAR & Ors.

From the Judgment and Order dated 01.12.2016 of the High Court of Bombay in AN No.313 of 2015 in NOM No.822 of 2014 in SN No.503 of 2014. SHAKTI YEZDANI & ANR. v. JAYANAND JAYANT SALGAONKAR & ORS. 699 Appearances: Abhimanyu Bhandari, Ms. Rooh-e-hina Dua, Arav Pandit, Harshit Khanduja, Advs. for the Appellants. Rohit Anil Rathi, Mrs. Aditi Dani, Mrs. Ranu Purohit, Aniruddha A. Joshi, Rajeev Maheshwaranand Roy, Advs. for the Respondents. JUDGMENT / ORDER OF THE SUPREME COURT JUDGMENT HRISHIKESH ROY, J.

1. Heard Mr. Abhimanyu Bhandari, learned counsel appearing for the appellants. Also heard Mr. Rohit Anil Rathi, learned counsel representing respondent no. 1. Mr. Aniruddha A. Joshi, learned counsel appears for respondent nos. 4, 6, 7 and 8.

2. The appellants and respondent nos. 1 to 9 are the legal heirs and representatives of an individual – Jayant Shivram Salgaonkar. The family patriarch executed a will on 27.06.2011 making provisions for the devolution of his estates upon the successors. Apart from the properties mentioned in the will, the testator had certain fi xed deposits (FDs) for the sum of Rs. 4,14,73,994/- in respect of which the respondent nos. 2, 4 and appellant no. 2 were made nominees. Additionally, there were certain mutual fund investments (MFs) of the amount of Rs. 3,79,03,207/- in respect of which appellants and Jay Ganesh Nyas Trust (respondent no. 9) were made nominees. The testator Jayant Shivram Salgaonkar passed away on 20.08.2013.

3. On 29.04.2014, the respondent no. 1 fi led Suit No. 503/2014 with the prayer for declaration inter alia that the properties of the testator may be administered under the court’s supervision and seeking absolute power to administer the same. He also prayed for permanent injunction restraining all other respondents and appellants from disposing, transferring, alienating, assigning and/or creating any third-party interests in respect of the properties in Exhibit A.

4. In their reply to the notice of motion in Suit No. 503/2014, the appellants pleaded that they were the sole nominee(s) to the MFs. The 700 SUPREME COURT REPORTS [2023] 16 S.C.R. essence of their claim was that the appellants being nominees were absolutely vested with the securities on the testator’s death. The appellant no.2 was additionally nominated and entitled to the FDs of the testator in the IDBI Bank. It was also the appellants’ contention that nominations made under/in Jayant Shivram Salgaonkar’s MFs/shares were made as per Section 109A & 109B of Companies Act, 1956 and bye-law 9.11.7 of the Depositories Act, 1996. Section 109A and 109B of the Companies Act, 1956 must be read as a code in themselves, wherein the meaning of words ‘vest’ and ‘nominee’ are to be seen from the statute alone bearing in mind the non-obstante clause contained therein. Therefore, the provisions should be interpreted without reference to any outside consideration.

5. On 31.03.2015, the learned Single Judge of the Bombay High Court while passing the order in the Notice of Motion mainly considered whether the law laid down in the case of Harsha Nitin Kokate v. The Saraswat Co-operative Bank Limited and Others1 was per incuriam. Further, the contentions of the appellants were rejected by the court by observing that S. 109A & S. 109B of the Companies Act, 1956 cannot be read in a vacuum and it is permissible for the court to look at pari materia provisions in other statutes. The court, while considering the argument of a ‘statutory testament’ raised in Sarbati Devi v. Usha Devi2, expressly negated those and opined that it would not be proper to limit the ratio in Sarbati Devi (supra) to the narrow confi nes of Section 39 of the Insurance Act, 1939. The same was thereafter reaffi rmed in Vishin N. Khanchandani and Anr. v. Vidya Lachmandas Khanchandani & Anr.3, Shipra Sengupta v. Mridual Sengupta & Ors.4, Ramchander Talwar & Ors. v. Devendra Kumar Talwar & Ors.5, Nozer Gustad Commissariat v. Central Bank of India & Ors.6 and Antonio Joao Fernandes v. Asst. Provident Fund Commissioner7. According to the learned judge, the decision in Kokate (supra) failed to consider the decision of the Supreme Court in Khanchandani (supra), Shipra Sengupta (supra) or 1 2 3 4 5 6 7