NCLT Orders Share Transfer to KJS Cement Founder's Heirs in Family Feud

The petition was filed by Himangini Singh (daughter) and Manjula Ahluwalia (wife), along with associated companies controlled by them, alleging that Pawan Kumar Ahluwalia, the younger brother of the deceased, along with others, had acted in a manner oppressive to their rights and had mismanaged the affairs of the company.

KJS Cement (I) Limited, originally incorporated in 1983 and later acquired by the late KJS Ahluwalia, was described by the petitioners as a family-run enterprise built largely through his investments and leadership. After his death in October 2021, his legal heirs claimed they were gradually sidelined from management and shareholding decisions.

The petitioners raised multiple allegations, including refusal to transfer shares held in the name of the deceased, dilution of their shareholding through new allotments, and the use of an alleged gift deed and board actions to shift control within the company.

They sought several remedies, including reconstitution of the board, setting aside certain allotments and resolutions, and directions to end alleged acts of mismanagement.

The respondents opposed the petition on preliminary grounds, arguing that the case was not maintainable as the petitioners allegedly did not meet the statutory shareholding threshold required to file a petition under Sections 241-242 of the Companies Act.

They also contended that the claims were time-barred and that certain disputed issues, including allegations of forgery, could not be decided in summary proceedings before the Tribunal.

Further, the respondents maintained that the company had performed well under the existing management and that the legal heirs had not completed the required formalities for transmission of shares in their favour.

The Tribunal rejected the objection regarding maintainability. It noted that the group of companies aligned with the petitioners collectively held more than 10% of the share capital, thereby satisfying the statutory threshold.

Additionally, the Tribunal held that legal heirs of a deceased shareholder are entitled to pursue such proceedings, as they represent the estate of the deceased.

It also clarified that it has jurisdiction to examine issues relating to alleged forgery and the validity of documents if they are integral to deciding allegations of oppression and mismanagement.

Focusing on one key relief sought by the petitioners, the Tribunal examined whether the shares standing in the name of the late KJS Ahluwalia should be transmitted to his legal heirs.

The respondents relied on a gift deed executed through a power of attorney to claim that certain shares had already been transferred. However, the Tribunal noted that the shares were still recorded in the name of the deceased and that the alleged transfer had not been formally effected in the company records. It also observed that the power of attorney appeared to have been granted for managing properties and did not clearly indicate authority to gift shares.

On this basis, the Tribunal held that the wife and daughter, being Class-I legal heirs, are entitled in law to have the shares transmitted in their names, subject to completion of prescribed procedural requirements.

Accordingly, the Tribunal directed the company to facilitate the transmission of 55,97,768 shares held in the name of the deceased and to enter the names of the petitioners in the register of members once the necessary applications are submitted. It also instructed company officials to extend full cooperation in completing the process without delay.

While granting this limited relief, the Tribunal clarified that other serious allegations, including claims of oppression, mismanagement, and disputes over past corporate decisions, require detailed examination and will be decided after completion of pleadings. The matter has been listed for further hearing on April 16, 2026.

- ANI