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1940 (6) TMI 13 - DSC - Companies LawMemorandum of association Special resolution and confirmation by CLB required for alteration of
Issues:
1. Correct construction of the company's articles of association. 2. Jurisdiction to rectify articles of association. 3. Registration of shares in the name of a deceased member's legal heir. Analysis: 1. Correct Construction of Articles of Association: The case involved a dispute regarding the construction of a company's articles of association. The company was formed to take over a business and had specific share capital structure. The Court examined the articles and concluded that the widow of a deceased member was entitled to the ordinary shares held by her late husband. The Court held that, based on the construction of the articles, the widow had a legal right to the shares, and thus, she should be registered as the holder of the ordinary shares. 2. Jurisdiction to Rectify Articles of Association: The Court deliberated on the jurisdiction to rectify the company's articles of association. The defendants sought rectification, claiming that the articles did not reflect the true intention of the signatories. However, the Court held that there is no statutory provision allowing for the rectification of articles of association of a company. The judgment emphasized that once the documents are registered, they become binding, and any alterations must be made through statutory procedures. The Court rejected the claim for rectification, stating that the statutory contract formed by registration did not allow for rectification outside of the statutory powers. 3. Registration of Shares in Name of Deceased Member's Legal Heir: The Court addressed the issue of registering shares in the name of a deceased member's legal heir. Despite certain clauses in the company's articles, the Court held that the widow, as the legal heir, had the right to be registered as the holder of the shares. The judgment cited legal principles and previous cases to support the widow's entitlement to the shares and ordered the rectification of the company's register of members to reflect her ownership. In conclusion, the Court allowed the plaintiff's appeal, dismissed the defendants' cross-appeal, and ordered the defendants to pay the plaintiff's costs. The judgment set aside the previous orders and granted the relief sought by the plaintiff in accordance with the Court's findings on the correct construction of the articles of association and the registration of shares in the name of the deceased member's legal heir.
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