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Issues Involved:
1. Rectification of the share register. 2. Legal representative's entitlement to shares. 3. Court's power under Section 155 of the Companies Act, 1956. 4. Default or unnecessary delay in registering shares. Detailed Analysis: 1. Rectification of the Share Register: The appeal by Vidyasagar Cotton Mills Ltd. concerns an order directing the rectification of its share register to include Nazmunnessa Begum's name in place of Mohammad Bashir. Mohammad Bashir's shares were to be transferred to Nazmunnessa as his legal representative after his death. The court found that Nazmunnessa, as the administrator of Bashir's estate, had the right to have her name entered in the share register, as she provided all necessary documentation, including the original letters of administration. 2. Legal Representative's Entitlement to Shares: The court recognized Nazmunnessa as the legal representative of Mohammad Bashir, as per Section 211 of the Indian Succession Act, which vests all property of the deceased in the legal representative. Regulation 25 of Table A of Schedule I of the Companies Act, 1956, states that only the legal representative can be recognized by the company as having any title to the deceased's shares. The court affirmed that Nazmunnessa had established a clear legal right to be registered as a member in place of Mohammad Bashir. 3. Court's Power Under Section 155 of the Companies Act, 1956: The court addressed the contention that it lacked the power under Section 155 to order rectification in cases of share transmission. It was argued that Section 155(1)(b) only allowed rectification for members whose names were improperly omitted from the register. However, the court interpreted Section 155(1)(b) broadly, stating that it covers cases where there is default or delay in entering the name of any person entitled to shares by transfer or transmission. The court emphasized that the section should be construed to include the registration of legal representatives and transferees. 4. Default or Unnecessary Delay in Registering Shares: The court examined whether there was default or unnecessary delay in registering Nazmunnessa's name. It was found that the board of directors had ample opportunity to consider her application but failed to act. The court noted that unnecessary delay occurs if a transfer to which no objection can be made is not confirmed by the directors at the first meeting at which it could be confirmed. The court concluded that the board had arbitrarily and capriciously omitted to make the entry, resulting in both default and unnecessary delay. Conclusion: The court dismissed the appeal, affirming the order for rectification of the share register to include Nazmunnessa's name. The court held that she had a clear legal right to the shares and that the board of directors had improperly delayed the registration. The appeal was dismissed with costs, and the judgment was certified for two counsel.
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