SECTION 84 – PARTICULARS OF DECEASED PERSONS TO BE
FURNISHED TO CONTROLLER
1555. Whether transfer of shares referred to in sub-section (1) includes transmission of shares by operation of law
1. Under section 84(2) , an Indian company is prohibited from registering any transfer of shares standing in the name of a deceased member of the company unless the transferee has acquired the shares for valuable consideration or a certificate from the Controller of Estate Duty is produced before the company that estate duty in respect of the shares has been paid or will be paid or none is due. It appears that in view of the provisions of section 84(2), many Indian companies insist on the production of estate duty clearance certificates before allowing mutation of the shares in the names of the heirs or successors of the deceased, who are thereby put to great inconvenience.
2. In the Board’s view the transfer of shares referred to in section 84(2) does not include transmission of shares by operation of law, such as occurs when the shares devolve on the legal heirs of a deceased member of a company or on the survivor or survivors of two or more joint shareholders. The provisions of section 84(2) are not, therefore, considered to be applicable to cases where the heirs or the survivors of two or more joint shareholders apply for registration in their names of the shares held by the deceased.
3. The Government of India have recently issued a Press Note clarifying the position as stated above for the information of the general public and of all Indian companies concerned. A copy of the Press Note is printed below [here printed as Annex] for information of all officers.
Circular : No. 7-D, dated 23-6-1960.
ANNEX – PRESS NOTE, DATED 21-1-1960 REFERRED TO IN CLARIFICATION
