The Bombay High Court overturned a judgement by a single bench, which had declared that nominees, and not legal heirs, will get the ownership rights of share certificates. Justice Gautam Patel declared the much referred to Kokate judgement per incuriam, which means ‘through lack of care’. This means it has been wrongly decided and does not have to be followed.
On 31 March 2015, Justice Patel heard two similar petitions. One was filed by a man, claiming to have an interest in the investments made in mutual funds by his deceased father, as his legal heir and representative. The other petition was filed by a woman, who claimed to have an interest in the investments made by her deceased mother.
Justice Patel looked into the ‘legal right, title and interest of the concerned parties in the shares.’ Among the Supreme Court judgements cited, Justice Patel specifically referred to the Sarbati Devi’s case. He said it is clear that the amount received by the nominee can be claimed by the legal heirs of the deceased. The order further said Companies and Depositories Act cannot and does not displace the law of succession. The order concluded by saying that Kokate judgement is per incuriam which means ‘through lack of care’.
In April 2010, Justice Roshan Dalvi had dismissed a petition of a woman, claiming an interest in shares in D-mat account held by her deceased husband as his legal heir and representative, as the man had nominated his nephew. Justice Dalvi observed that shares would vest with the nephew after the death of the man in view of the provisions of the Companies and Depositories Act. The order concluded the wife would have no right to get the shares of her deceased husband. This is referred to as the Kokate judgement.