TMI Blog1967 (3) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... and also for the deletion; of the applicant as a contributory of the company. The relevant facts are as follows: After due compliance with the requirements of sections 184 and 186 of the Companies Act, 1913, with which we are concerned in this case, and ; rules 96, 97 and 98 of the Indian Company Rules (Madras), 1940, the official liquidator obtained a decree on April 22, 1960, whereby the applicant, as a contributory, was directed to pay a sum of Rs. 910 with interest thereon at 6 per cent. per annum from March 3, 1959. In fact, even at the stage when the list of contributories was sought to be settled, notices as required under law were attempted to be served on the applicant. At one time, the notice was returned with the endorsement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the applicant that execution proceedings would be taken in case of further default in the payment of the decree amount. Thereafter, and for the first time, by his letter dated July 27, 1965, the applicant denied liability on the basis of certain court proceedings and prayed that his name may be removed from the list of contributories. The official liquidator explained the correct position in his letter dated August 2, 1965, and granted him some more time to pay the amount. A reminder was also sent on October 12, 1965. It is at this stage that both the applications referred to above have been filed. The allegation of the applicant is that he became aware of the passing of the decree only on August 2, 1965, and that the shares which stoo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f its own. The word implies 'that there is a prior error, mistake or defect which is apparent on the face of the record of the register, which, after rectification, is made good and corrected by removing such a mistake or error. As was pointed out in Pulbrook v. Richmond Consolidated Mining Co. [1878] 9 Ch. D. 610 : "The effect of rectification is exactly the same as if the name struck off had never been put in. That is the meaning of 'rectification'." Unless the applicant establishes a just cause or an equity in him to strike off his name in the register, the company court would not exercise its discretion to rectify the register. As was pointed out in Bellerby v. Rowland and Marwood's Steamship Co. Ltd. [1901] 2 Ch. 265: "In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer of the shares by the applicant in favour of the director abovenamed. The learned judges, after considering the probabilities of the case, same to the conclusion that the applicant's version that he lent money as a debt pure and simple was more reliable and probable. But this observation of the learned judges in the said judgment cannot relieve the statutory responsibility which at all times vested with the applicant to correct the register of members in the company under consideration with alacrity and promptitude. It might be that the applicant might have taken the precaution of claiming damages against the director for having improperly included his name in the register of members and ought to have also taken the precaution of cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the strength of it and in case the company goes into liquidation the rights of creditors are deemed to have been crystallised on such a date. A member therefore cannot stand by and; acquiesce in his name remaining in the register of members and wake up at a late stage and particularly after the winding up of the company and ask for rectification. Lord Romilly M.R. in Walker's case: Anglo-Dannbian Steam Navigation and Colliery Co. In re [1968] 6 Wq. 50, 55 observed: " Where there has been no fault on either side, the register remains as it was where the fault is on both sides, the register also remains as it was." Therefore the onus is heavily on the shareholder to set right the mistake, if any, in the register without any delay. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law that it would be too late for a shareholder to repudiate the share after winding up even if a proper case for repudiation had been made earlier. The essential principle to be remembered is that after winding up, the rights of creditors are crystallised and the hope held out to the creditors ought not to be dislodged at that time by rectifying the register on an application by a member who contends that his name is wrongly remaining on the register. Having held out that he is a shareholder and thereby a contributory also, if he fails to pay the share amount, he can not approbate and reprobate and ask for an equitable discretionary remedy from the court to rectify the register. In this case the member knew that his name was in the regi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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