9911796707
TMI Blog1935 (8) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... a ) the name of any person is fraudulently or without sufficient cause entered in or omitted from the register of members of a company; or ( b ) default is made or unnecessary delay takes place in entering on the register the fact of any person having ceased to be a member, the person aggrieved, or any member of the company, or the company, may apply to the Court for rectification of the register. (2) The Court may either refuse the application, or may order rectification of the register and payment by the company of any damages sustained by any party aggrieved, and may make such order as to costs as it in its discretion thinks fit. (3) On any application under this section the Court may decide any question relating to the title of any pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant articles of association of the company dealing with transmission of shares are Articles. 41 and 42, and, in view of the difference of opinion which has arisen, I propose to set them out in full: "41. The executors or administrators of a deceased member (not being one of several joint holders) shall be the only persons recognised as having any title to the shares registered in the name of such member, and in case of death of any one or more of the joint-holders of any shares, the survivors shall be the only persons recognised by the company as having any title to or interest in such shares. Nothing herein contained shall operate to release the estate of a deceased joint-holder from any liability in respect of any shares jointly held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances in which it comes before me. Before deciding this issue, it is not, I think, inappropriate to observe that Articles 41 and 42 of this company's articles of association substantially reproduce, though not in quite the same language. Clauses 21 and 22 of Table A, Indian Companies Act, which itself follows closely Clauses 20 and 21 of the Table A of the English Companies Act of 1929. It appears to me that these clauses, while appropriate to a system such as that prevailing in England under which a legal title from a deceased person can only be traced either through probate or through letters of administration, are hardly so appropriate to a system under which legal title by devolution may be obtained apart altogether from and without ei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justified by the articles. The right of transfer and the phenomenon of transmission of share are (subject to the articles and in the case of a private company to certain statutory provisions) inherent. But where by the contract of membership restrictions and conditions have been imposed in the articles themselves and those restrictions and conditions are insisted upon by the company. I do not think that the company can in insisting upon them be held to act 'without sufficient cause' within the meaning of Section 38, Indian Companies Act. The short answer in the present case is to my mind to be found in Article 41. Whether it be appropriate or not to the system of devolution of interest on death prevailing in this country, that article pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any in taking its present view is doing so, I am informed, purely as a matter of principle in order to ascertain with some authority exactly what its position is. In the circumstances I am unable to see any reason why, whatever the consequences may be, the company can be compelled to depart from its own articles. It is, however, said by Mr. P.B. Sen on behalf of the petitioners that this produces an absurdity. I am inclined to the view that it does. But I cannot see in that any ground upon which I can compel the company to act contrary to its own articles or whereby I can substitute for Articles 41 and 42 provisions which I do not find therein. It is Mr. Sen's contention that in the present case, the case being one of a joint Hindu family ..... X X X X Extracts X X X X X X X X Extracts X X X X
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