Two holdings, an unregistered nomination and a will executed abroad
R. Subramanian, sole holder of 600 equity shares of Sundaram Pumps Ltd in physical folio S-3310 and of 900 shares in a demat account with a depository participant, died in Chennai on 2 April 2024. In 2015 he had submitted a nomination naming his brother Ganesh, but the form was returned by the RTA, Sundaram Registrars, for want of a witness signature and was never re-lodged; the register shows no nomination. His daughter Kavitha, resident in Toronto, lodges a claim for both holdings with the RTA, enclosing a notarised copy of the death certificate, an unprobated will of 2019 naming her sole executrix, and her affidavit and indemnity. The documents executed in Canada are notarised but not apostilled. Ganesh simultaneously writes asserting that he is the "registered nominee" and objecting to any transmission to Kavitha, threatening to sue the company and the RTA.
1. How should the RTA deal with the 600 physical shares?
Read the worked answer
Separate the three questions hiding in the file: whether a nomination exists, who is entitled, and what documents the RTA may insist on.
Nomination. The 2015 form was never registered; a form returned for a missing witness signature creates no nomination, and Ganesh is not a "registered nominee". Even a valid nomination would not make him owner. A nominee receives the securities as a trustee for the legal heirs and gives the company a valid discharge; entitlement between heirs is decided elsewhere.
Entitlement. The will is unprobated. Where a will is made within the ordinary original civil jurisdiction of the Madras High Court, probate is required before a legatee can establish a right; outside that, the RTA proceeds on the documents its board policy prescribes. For a small value per folio, the simplified set - death certificate, affidavit of entitlement, indemnity and a no-objection from the other legal heirs - can be accepted. Note the threshold applies per folio, not to the aggregate of all holdings.
Documents. Kavitha's Canadian papers must be notarised and apostilled, or attested by the Indian mission, before acceptance. Transmission to Ganesh is not an option on this record.
2. What is the RTA's role in the 900 demat shares, and how should Kavitha be advised?
Read the worked answer
The 900 demat shares are outside the RTA's register altogether. Transmission of securities held in demat form is carried out by the depository participant with whom the account is maintained, under the depository's transmission procedure and forms; the RTA cannot accept the request, issue transmission instructions or update the depository position on its own.
Whether the demat account carried a nomination is also a question for the DP's records, not the RTA's register. It is quite possible that Subramanian nominated someone for the demat account at the DP level even though the 2015 paper nomination for the physical folio was never registered, or the reverse. That is why the two holdings must be handled as two files.
Kavitha should be told, in writing and with the DP's contact details, to apply to the DP with the same document set - death certificate, her identity and address proof, the will or probate, affidavit and indemnity, and the apostilled versions. If Sundaram Registrars also acts as the DP for that account, keep the two files physically separate and apply the DP's KYC and transmission norms, because the two capacities impose different obligations and different record-keeping.
3. How should the RTA respond to Ganesh's claim and objection?
Read the worked answer
Reply in writing within a few working days, and keep the tone factual.
The reply should state that no nomination is recorded in the register, that the 2015 form was returned for want of a witness signature and never re-lodged, that a nomination would not in any case confer ownership as against legal heirs, and that the RTA will proceed on the documents its board policy prescribes unless a court restrains it. Do not describe the folio as "frozen" unless the board has actually decided to hold the transmission; an unnecessary self-imposed freeze beyond the prescribed process invites a complaint to SEBI.
Flag the folio with the caveat so that any future request on it is routed to a senior officer, preserve his letter and Kavitha's file, and do not disclose her documents to him. If he produces an injunction or a succession certificate, hold immediately and record the date and time of receipt. Document the whole chain - letters received, replies, documents verified, decision and approver - because a contested transmission is a standard inspection sample and the RTA's protection lies entirely in that record.