1965 (2) TMI 30 - HC - Companies Law

Summary

Issues:
1. Rectification of share register under section 155 of the Companies Act, 1956.
2. Dispute over ownership and transfer of shares within a family-owned company.
3. Bar of limitation in filing the petition.
4. Complexity of questions of title and maintainability of the petition.

Analysis:

The judgment pertains to an application for the rectification of the share register of a company under section 155 of the Companies Act, 1956. The petitioner claimed ownership of specific shares in the company but discovered discrepancies in the share register, leading to the dispute. The company, a family concern, contended that the petitioner held shares as a benamidar for his father and voluntarily transferred them to other family members. The issues framed included the transfer of shares, compliance with statutory requirements, limitation period, and the complexity of title-related questions.

The court first addressed the issue of maintainability based on the complexity of the title dispute. It was argued that the petitioner's title to the shares was seriously disputed, necessitating a detailed investigation involving conflicting oral and documentary evidence. The court emphasized that section 155 provides a summary remedy, but if complicated questions of fact and law are involved, the matter should be adjudicated in a civil court. Citing precedents, the court highlighted that a separate action would be appropriate for intricate matters, and the summary jurisdiction should not be exercised in such cases.

Referring to previous judgments, the court reiterated that disputed questions of fact should not be resolved summarily under section 155, as they are more suited for a full trial with discovery of documents. Considering the contentious nature of the petitioner's title and the need for a comprehensive examination of facts, the court declined to exercise its power under section 155. Consequently, the petition was deemed not maintainable, and the petitioner was advised to pursue appropriate legal action in a civil court for resolution.

In conclusion, the court dismissed the petition, refrained from awarding costs, and allowed the petitioner to seek redress through the civil court. By emphasizing the need for a detailed examination of disputed facts and the limitations of summary jurisdiction, the judgment underscores the importance of appropriate forums for resolving complex legal disputes related to share ownership and transfers within companies.