TMI Blog1987 (2) TMI 428X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of the sixth respondent-company in any manner, pending disposal of the company petition. Respondent Nos. 1 to 4 filed a counter-affidavit on August 12, 1985. Later, the first respondent filed an additional counter-affidavit on October 30, 1986, objecting to the maintainability of the company petition itself at the instance of the petitioners, the objection being that the petitioners are not "members" as defined under section 41 of the Companies Act, 1956. The authorised capital of the sixth respondent-company (hereinafter referred to as "the company") is Rs. 5 lakhs comprising Rs. 3 lakhs, being the equity share capital divided into 3,000 equity shares of Rs. 100 each, and Rs. 2 lakhs, being the preferential share capital divided in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that petitioners Nos. 1 and 2 and the second respondent were appointed as the directors of the company at an extraordinary meeting of the general body held on June 12, 1983, and that a return dated February 4, 1983, in the prescribed form was also filed by the first respondent before the Registrar of Companies furnishing the particulars of the said appointment. In the counter-affidavit filed on behalf of respondents Nos. 1 to 4 in the company petition, it is stated that it is unnecessary to canvass the version set out in paragraph 4 of the company petition. What is more, in paragraph 10 of the counter-affidavit, the averments in paragraph 13 of the company petition are admitted to be correct. Also in paragraph 12 of the counter-affidavi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose name is entered in its register of members, shall be a member of the company". Section 2(27) of the Act also defines a member in relation to a company as not including a bearer of a share warrant of the company issued in pursuance of section 114. Section 113 deals with issue of share certificates after allotment. Rule 4(1) of the Rules called the Companies (Issue of Share Certificates) Rules, 1960, hereinafter referred to as "the Rules", lays down that when a company issues any capital, no certificates of any share or shares in the company shall be issued except in pursuance of a resolution passed by the board. Rule 5 deals with the form and contents of a share certificate. Rule 6 requires the share certificate to be issued under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n's name is entered as a member of the company in its register of members, it is not open to question his membership. The converse does not necessarily flow. Even if the prescribed register of the company does not incorporate the names of all its shareholders as members of the company, the particulars so entered in the register are not conclusive. The shareholders of the company, in whose favour share certificates are issued, can exercise rights as members of the company notwithstanding the omission of their membership as found in the prescribed register. In fact, section 150(1) of the Act casts a duty upon every company to maintain a register of its members and enter the relevant particulars more fully set out in clauses ( a ) to ( d ) the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by this court and that in its place another register with defective particulars is brought into existence. In any event, the first respondent cannot take advantage of his failure to maintain the prescribed register properly to non-suit the petitioners. Sri Y. Suryanarayana, learned counsel appearing for the respondents, however, submits that it is open to the petitioners to move this court for rectification of the defective entries in the prescribed register under section 155 of the Act. Section 155 of the Act is only an enabling provision and cannot be invoked in aid to defeat the rights of the petitioners to move this court for appropriate relief under sections 397 and 398 of the Act. Lastly, it is urged by learned counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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