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Ashish Patil   19 January 2023

Broker (dp) won't honour succession certificate because it has face value

My father's broker with whom he had a DEMAT account is not honouring succession certificate issues by court in favour of my mother after his death. Broker keeps saying that succession certificate submitted by mother does not have the market value but the face value of securities. The succession certificate mentions DP ID , Client ID and aggregate face value of all stocks and bonds seperately.  My lawyer, who got the succession certificate is very confident of the fact that we are on right . He tells us that transmission is always done using face value while transfer needs to be done on market value. We sent the broker certified documents procured by the court which shows statement from broker itself that contains market value aswell as the corresponding face value calculation. We are very confused in what to do. Lawyer says we should file a contempt of court petition. We have received advice about getting the certificate modified. Many legal experts we personally spoke to tell us broker should really not care and do the transmission. We are also told that we can't give a format to court for the certificate. Would really appreciate any help or advice on this. 


 8 Replies

Real Soul.... (LEGAL)     19 January 2023

It is a good query .. . Since  the grant of Succession Certificate does not amount to a decree or order within the meaning of the CPC and .Section 375 of ACT  makes it clear that the grantee of a succession certificate only gets the power to sue on an action for the recovery of the money. In rare situations like yours the  possible way is to file suit for recovery on the basis of certificate.

1 Like

Ashish Patil   19 January 2023

I am really worried because half people talk to are telling me that we should go by market value. Lawyer familiar with such matters tell me that identifyin the asset purpose of succession certificate and for the broker value is immaterial. Most lawyers are telling me that this cannot be reason of denial. My lawyer tells me that courtfees and wordings are decided by court, we can't share any format. 

Shashi Dhara   19 January 2023

See your father has named nominee in case of death , nomination is compulsory ,why you claimed succession certificate ,give only death certificate of your father to change demat account to your mother's name ,you complaint to sebi or main broker .

Ashish Patil   19 January 2023

There was no nominee as per the CDSL statement and broker record. That is why they asked us to get succession certificate.

Shashi Dhara   19 January 2023

Issue notice to main broker or complaint to sebi.

Ashish Patil   20 January 2023

Done already. Since they were asking for a power of attorney from my mother, she visited broker and herself handed over a letter demanding transmission in 10 days . Let us see what happens. Are there any provisions to seek clarification from court regarding the order . Something that makes it explicit that all shares irrespective of face and market value belong to my mother 

Dr. MPS RAMANI Ph.D.[Tech.] (Scientist/Engineer)     23 January 2023

Succession to dematerialised shares is governed by the Depositories Act. It is the bank, which is the depository participant and is having the shares in the demat account of the shareholder that has to take action on the transfer of the account and the shares along with that. No broker is involved. If the deceased had filed a nomination during his life time the shares will be transferred to the name of the nominee. Heirs or successors can claim from the nominee. I do  not understand how a broker is concerned with the transfer. Sale or purchase of shares through the market is facilitated by the broker on a commission. There is a stamp duty payable on such transfers. The stamp duty is based on the actual cost of transaction, which will be the market value on the date and time. I do not know whether there is any stamp duty for the transfer of shares held by a deceased person to his or her heirs or successors. If there is a stamp duty it will be on the market value and not face value. If it was not paid it can be paid now along with any penalty and the transfer effected provided other requirements are in order..

Ashish Patil   24 January 2023

Thank you for your reply. The broker is also the DP. There was no nomination as per their records. Looks like valuation was done on face value.  My mother is going to try to get it correct and will pay any  fees and plead for market value to be appended. Different lawyers are telling us different things. We have reached out to the DP asking what exactly they want mentioned in the certificate and if there is a format. Let's hope this get sorted. We don't mind paying any fees , but clarity is needed. Extremely disappointed with the broker/DP , they don't care. Will also ensure she personally hands over any legal documents to them to avoid them asking for power of attorney. 

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