HC reverses decision on inheritance case

The two brothers couldn’t make any further claims than the share they inherited 

Verdict: Reversing the trial court’s verdict, the High Court declared the final inheritance settlement agreement (FISA) drawn in 2007 between the two brothers of Tashi Group of Companies (TGC), Tobgyal Dorji and Wangchuk Dorji, and their half brother Kazi Ugyen Dorji as invalid.

The court ruled that Kazi Ugyen Dorji was the sole beneficiary in the absence of a will that bequeaths their father, late Dasho Ugyen Dorji’s properties or his shares to anyone at the time his death.

Appealing on the trial court’s declaration of the FISA as valid and other decisions, Kazi Ugyen Dorji’s mother, Lhaden Pem Dorji submitted to High Court that it should be declared invalid and that her son be declared as the sole heir to 66 percent of the total shares of the company.

In the FISA signed between the two brothers and Lhaden Pem Dorji, the property of late Dasho Ugyen Dorji was divided into three proportions, 36.5 percent each for Tobgyal Dorji and Wangchuk Dorji, and 27 percent for Kazi Ugyen Dorji.

The agreement also stated that, since Kazi Ugyen Dorji was a minor, the two brothers would manage TGC with the condition that their brother was given the right to partake in the management once he attains 18 years.

Lhaden Pem Dorji’s legal counsel Yonten Dorji asked the court to declare the FISA null and void, and give the whole of the estate of the late father to her son, reasoning that the two brothers had fraudulently suppressed the fact that they had already received a 45 percent share of TCC as their final settlement when the late Dasho divorced their mother, Savitri Dorji.

The court said the two brothers had received 50 percent of the shares of the company along with their mother, which was 16.66 percent each.

In 1983 an agreement was drawn where their mother surrendered her shares for money and a plot of land in Nepal.

The High court established that the agreement had altered the final shareholding patterns of the late Dasho Ugyen Dorji from 50 to 55 percent, and that of the two brothers’ shares from 16.66 to 22.5 percent each which totals to 45 percent in the company.

“Having concluded of receiving their legitimate shares as desired by their late father, the two respondents (brothers) cannot assume the role of giving what primarily do not belong to them,” the verdict stated.

It stated that the 1983 agreement proves without doubt that they have been legally severed and ceased to be family members of the main house as clearly stipulated by section Gha 2.4 (1), of the Inheritance Act 1980.

The section states, “The member of a family who after taking his or her shares leaves the main house, shall cease to be a member of that family from the date of taking his share and leaving the main house.”

“While FISA was intended to divide shares and properties amongst the three heirs, the 1983 agreement which was material should have been disclosed in all honesty for FISA to become absolutely valid,” the verdict stated.

The High Court ruled that the two brothers couldn’t make any further claims beyond 45 percent jointly.

The court said that all personal estate and properties, which were personally occupied by the late Dasho prior to his death including the land and bungalow in Phuentsholing and Thimphu will be inherited by Kazi Ugyen Dorji along with the remaining 55 percent of the company’s shares.

The court also directed the two brothers to restitute about Nu 64.563 million which was withdrawn from the late Dasho’s personal savings account and divided as shares.

Kazi Ugyen Dorji will also inherit 55 percent of all properties in the name of the company and those lands although reflected in the name of the late Dasho, but having business establishments.

Tobgyal Dorji is also asked to restitute Nu 10.5M that belonged to the late Dasho which he withdrew from Axis Bank in Siliguri.

On November 27, Thimphu district court, after four years of trial, had ordered the two brothers of the Tashi Group of Companies (TGC), Tobgyal Dorji and Wangchuk Dorji, to compensate Nu 1M to their half brother, Kazi Ugyen Dorji.

Bench five of the district court ordered the two brothers to pay Nu 1M compensation for using the trade name ‘Tashi’ and good will of TGC in their new business ventures without the consent of their half brother. This decision was upheld by the High Court.

Lhaden Pem Dorji filed a legal suit on November 23, 2010.  She accused the two brothers of misrepresenting and suppressing crucial facts and information while executing the FISA on May 6, 2007.

Tshering Palden

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