TMI Blog1963 (7) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... ammad Bashir. It appears that Nazmunnessa in her own right is the holder of 7,800 fully paid up ordinary shares and her son, Mohammed Riaz, is the holder of another 7,881 fully paid up ordinary shares. Mohammad Bashir, Nazmunnessa and one Manzoor Ahmed were the directors of the managing agents company. Upon the death of Mohammad Bashir, on or about the 14th March, 10,60, Nazmunnessa was appointed the managing director of the managing agents company and Manzoor Ahmed as the nominee of the managing agents company became an ex officio director of the appellant company. On the 17th March, 1960, Nazmunnessa was co-opted as the director of the appellant company in place of Mohammad Bashir. Nnzmunnessa, Mansoor Ahmed and several other persons are at present the directors of the appellant company. On the 24th December, 1960, the board of directors of the appellant company resolved to hold the annual general meeting on the 9th February, 1961. Nazmunnessa was a party to this resolution. The notices of the meeting issued by order of the board stated that amongst other persons Nazmunnessa offered herself for re-appointment as a director, and that the share transfer book of the appellant compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y was due to be held on the 9th February. It appears that the company had in the meantime received two letters, ore from Manzoor Ahmed dated the 29th December, 1960, and another from his advocate dated the 27th December, 1960, claiming that Manznor Ahmed was entitled to registration of his name in the register of members as a co-sharer of the shares standing in the name of Mohammad Bashir. Nazmunnessa moved her application for rectification of the share register on the 30th January. It appears that she received the letter of the appellant company dated the 28th January after her application was filed in court. On the 8th February, S.P. Mitra J. passed an order restraining the company and its directors from holding the annual general meeting on the 9th February, except for the purpose of adjourning the same and directing the company to hold a meeting of its board of dirertors on the 14th February for the purpose of considering the application of Nazmunnessa for rectification of the share register and taking a final decision thereon and giving liberty to file further affidavits. An appeal by the company from this order has been dismissed. Further affidavits were filed pursuant to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the only person who may be recognised by the company as having any title to his interest in the shares. Nazmunnessa has obtained a grant of letters of administration to the estate of Mohammad Bashir and by section 211 of the Indian Succession Act she is his legal representative for all purposes and all his property vests in her as such. The legal representative of a deceased member is the legal owner of the shares held by the deceased, but he does not become a member of the company until his name is put on its register of members. Subject to the powers of the company to decline registration of his name as a member, the legal representative of the deceased member is entitled as between him and the company to registration of his name as a member of the company in respect of the shares held by the deceased. Indeed, under regulation 25 of Table A no other person can be recognised by the company as having any title or interest in the shares. Nazmunnessa duly elected to be registered as the holder of the shares as required by regulation 26(1) of Table A. Under regulation 26(2) of Table A the board of directors had in such a case the same right to decline or suspend registration as it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame entered as a member in the register of members. But Mr. Sen contends that the court has no power under section 155 of the Companies Act, 1956, as amended by Act LXV of 1960 to pass an order of rectification of the register of members in cases of transmission or transfer of shares. Our attention has been drawn to the definition of "member" in sections 41 and 2(27) of the Act and to section 155(1)( b ) which enables rectification of the register of members in cases of default or delay in entering on the register "the fact of any person having become .... a member," and it is argued that a person claiming title to the shares by transfer or transmission cannot claim registration of the fact of his "having become a member", considering that such a person is not a member, his name never having been entered on the register of members. Mr. Sen contends that section 155(1)( b ) enables the court to make an order of rectification of the register by entering therein the names of subscribers to the memorandum of association of the company who become members on its incorporation and whose names have been improperly omitted from the register, but the legislature has deliberately excluded f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t appears to us that where default is made or unnecessary delay takes place in entering on the register the name of any person entitled to the shares on transfer or transmission, and in omitting therefrom the name of the transferor or the deceased member, there is default or delay in entering on the register the fact of the transferee or the representative having become a member and the fact of the transteror or the deceased having ceased to be a member, as contemplated by section 155(1)( b ). It is true that a person whose name was never entered on the register has never become a member, but if he has the legal right to be a member, he is entitled to say under section 155(1)( b ) that the company should recognize his membership and make an entry on the register of the fact of his becoming a member and his predecessor-in-title having ceased to be a member. The provisions of sections 106 to in read with regulations 19 to 28 of Table A of Schedule 1 to the Act show that a person entitled to the shares on transfer or transmission can claim registration of the transfer or the transmission. We cannot imagine that the legislature intended to confine the summary remedy of section 155(1)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to relief under that section. Under section 155 of the Companies Act, 1956, as it stood before its amendment in 1960, it was well settled that a person aggrieved by the refusal to register the transfer of shares had two remedies, namely : (1) to apply to the court for rectification of the register under section 155, and (2) to appeal against the resolution refusing to register under section in (see Harinapar Supar Mills Ltd. v. Shyam Sunder Jhnnjhunwala [1961] 31 Comp. Cas. 387 (SC)). We are satisfied that under the amended Act also the remedy by way of an application under section 155 as also the remedy by way of an appeal under section III are open to the aggrieved person. Mr. Sen next contended that there has been no default or unnecessary delay within the meaning of section 1155(1)( b ) and, consequently, the court has no jurisdiction to pass the order of rectification under section 155. On the point of unnecessary delay the practice is well stated in Buckley on the Companies Acts, 12th edition, page 290, thus: "A transfer to which no objection can be made ought to be confirmed by the directors at the first meeting at which in the ordinary course of business it can ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
