9911796707
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Issues:
Rectification of share register under Section 38 of the Companies Act; Dispute over ownership of shares after the death of the original shareholder; Validity of a resolution for payment in lieu of shares; Winding up petition and claims for outstanding amounts; Dispute between parties regarding the resolution's legality; Complicated legal questions and pending civil suits; Discretion of the court in rectifying the share register. Analysis: The judgment involves an application for rectification of the share register under Section 38 of the Companies Act, where the petitioner claimed ownership of 2000 shares after his father's death. The company, however, disputed the petitioner's entitlement, citing a resolution agreeing to payment in lieu of shares. This resolution was challenged for being 'ultra vires' by the company, leading to a series of legal actions including a winding-up petition and civil suits to determine the validity of the resolution and share transfer. The court noted the complexity of the legal disputes between the parties, with multiple suits and conflicting claims regarding the resolution's legality and share ownership. Given the pending civil suits and the gravity of the issues in contention, the court held that the application for rectification of the share register could not be decided summarily. The court emphasized the discretionary nature of rectification powers and cited legal precedents indicating that in cases of disputed ownership or unresolved legal questions, it is more appropriate for parties to seek resolution through civil suits rather than summary proceedings under the Companies Act. In light of the legal principles and precedents, the court dismissed the application for rectification of the share register, highlighting the need for a comprehensive resolution of the legal disputes through civil suits. The judgment underscores the importance of a thorough legal examination and resolution of complex ownership and validity issues in a more appropriate forum than summary proceedings under the Companies Act.
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