1988 (10) TMI 259 - HC - Indian Laws

Shares warrants and entries in register of members, Powers of Court to rectify register of members

Summary

Issues Involved:
1. Rectification of the register of members of five incorporated companies.
2. Authority of the third respondent to transfer shares.
3. Applicability of Section 155 of the Companies Act, 1956.
4. Rights of the appellant as an heir and co-owner.
5. Administration of the estate of the deceased by the third respondent.

Issue-wise Detailed Analysis:

1. Rectification of the Register of Members:
The appellant sought rectification of the register of members of five companies by removing the name of Associated Printers (Madras) Ltd. and substituting her name as the holder of the shares. The court noted that the relief sought was identical across the petitions, focusing on the pleadings in C.P. No. 31 of 1976.

2. Authority of the Third Respondent to Transfer Shares:
The third respondent, the eldest son of the deceased, administered the estate and transferred shares to Associated Printers (Madras) Ltd. The appellant argued that the third respondent had no authority to transfer assets without her consent. The court found that the third respondent acted as a de facto administrator with the knowledge and consent of the other heirs, including the appellant, and the transfers were made in the course of due administration to discharge debts and estate duty.

3. Applicability of Section 155 of the Companies Act, 1956:
The court held that Section 155 provides a summary remedy for rectification of the register and is not intended to adjudicate complicated questions of law or disputed facts. The court found that the appellant's claim involved complex issues of title and administration, which could not be resolved under Section 155. The court cited precedents to support the view that Section 155 is not suitable for cases involving serious disputes of fact or law.

4. Rights of the Appellant as an Heir and Co-owner:
The appellant claimed a right to one-fifth of the shares as an heir of the deceased. The court acknowledged this right but noted that the appellant's primary concern appeared to be the purchase of the shares rather than rectification of the register. The court also noted that the appellant's right of pre-emption under Section 22 of the Hindu Succession Act could not be enforced through Section 155.

5. Administration of the Estate by the Third Respondent:
The court found that the third respondent acted as an administrator de son tort, managing the estate with the consent of the other heirs. The court held that the third respondent's actions were lawful and binding on the estate, as they were made in the course of due administration to discharge debts and estate duty. The court also noted that the appellant had benefited from the administration and could not now challenge the authority of the third respondent.

Conclusion:
The court dismissed the appeals, holding that the remedy under Section 155 of the Companies Act could not be invoked in this case. The court found that the third respondent acted lawfully as an administrator de son tort and that the appellant's claims involved complex issues of title and administration that could not be resolved through a summary proceeding under Section 155. The court also noted that the appellant's primary concern was the purchase of the shares, and her right of pre-emption could not be enforced through Section 155.