The Supreme Court clarified that nominations under the Companies Act do not grant absolute rights of ownership in favour of the nominee. Moreover, the usual mode of succession should not be impacted by such a nomination. The legal heirs therefore cannot be excluded by virtue of nomination.
Tag: Companies Act
In the case of M.K. Rajagopalan v. Dr. Periasamy Palani Gounder, the Supreme Court provided clarification regarding the requirements for determining the eligibility of a Resolution Applicant. The Court held that the commercial decisions made by the Committee of Creditors must not exceed the boundaries set by the law. Accordingly, the Court affirmed the order of the National Company Law Appellate Tribunal which rejected the Resolution Plan proposed by the Successful Resolution Applicant.