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TMI Blog1935 (8) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court shall settle a list of contributories, with power to rectify the register of members in all cases where rectification is required in pursuance of the Act. Section 184 thus incorporates Section 38, under which, inter alia, if the name of a person is fraudulently or without sufficient cause entered in the register of members of a company, the person aggrieved, or any member of the company, may apply to the Court for rectification of the register. On an application under that section the Court has power to decide any question relating to the title of the aggrieved person to have his name omitted from the register, and generally to decide any question necessary or expedient to be decided for rectification of the register. The exercise of the jurisdiction given by this section is discretionary, having regard to the person who is the applicant before the Court, and to all the facts and circumstances of the case. The list of contributories of this company was filed on 28th February, 1935. No other contributory except Balubhai Khimchand appeared on the settling of the list, and the list was settled by the order of the Court dated 28th June, 1935, except with regard to the 200 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds on which rectification of the register is applied for: ( a ) that this contributory is only a nominee in respect of the two hundred shares, and ( b ) that the transfer of the shares to his name is invalid and void. The ground of his being only a nominee was put forward by him first, but it was abandoned by his counsel at the hearing. The company, and now the liquidator, is not concerned with the person paying the consideration but with the person who has signed the transfer form as purchaser and whose name is entered as owner of the shares in the share register. Even if Balubhai Khimchand was the nominee of Jivanchand Dharamchand in respect of the two hundred shares, the company was not informed about it. Moreover, the shares were entered in his name with his knowledge and consent, and prima facie he is the contributory who is liable in respect thereof. The second ground, namely, that the transfer is invalid, is the only one which is now relied upon. The form of transfer is provided for in Article 34 of the articles of association of the company. Such a form was executed by the parties concerned on 13th November, 1933. The upper portion has been torn off. But it is clear f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Govindji Sheth has not signed the resolution. With regard to Dr. Damany, one of the directors, there is an endorsement on the resolution that the circular was presented to him, but he declined to sign it. Under Article 111 a resolution passed without a meeting of the board of directors is valid if it is signed by all the directors, and as this was not signed by all the five, the resolution was invalid. On that very day, however, viz., 13th April, 1934, a letter was written on behalf of the contributory to the company that a considerable time had elapsed and that he was surprised at the delay in the transferring of the shares to his name, and that if the shares were not transferred within 24 hours from the receipt of the letter, they should be returned to the attorneys on his behalf. The shares were transferred in the register of shares on 14th April, on which date the transfer fee was received by the company according to the endorsement on the transfer form. Thereafter there was a meeting of the directors on 19th April when the circular resolution of 13th April was confirmed, and a resolution was passed that the two hundred shares standing in the name of Mr. Mavji Govindji Sheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cle 35 the directors may at any time in their absolute and uncontrolled discretion and without assigning any reason decline to register a proposed transfer of shares, but there is nothing on the record to show why the registration was delayed till 14th April. It appears that the company received a threatening letter from Balubhai's attorneys on 13th April, asking the company to return the shares if they were not transferred in the register within 24 hours, and the transfer was completed by the 14th. The agreement of transfer was made in November 1933, and no action of the directors was necessary to validate it, though, as I have stated before, they could in their discretion refuse to accept the transfer. The mere delay in registration does not justify an assumption that there was a refusal to register the transfer before 14th April. In my opinion the irregularity, if any, of the meeting of 19th April for want of notice to all the directors does not invalidate a transfer duly made. The transfer was registered on 14th April, and at the date of the winding up there was upon the register a transferee who was legally liable to the company in respect of the shares; cf. Symon's case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner on 6th October, 1934, to consider whether the company should be wound up or not, he voted as the owner of two hundred and fifty shares, including the two hundred in dispute. He knew that Mavji Govindji Seth also voted as the owner of the same two hundred shares, and yet he took no proceedings till long after the winding up to have this position cleared up. The register is not absolutely conclusive, but it is, in my opinion, necessary not only from the point of view of the law but as a matter of policy to see that it is as conclusive as it can be made consistently with a proper interpretation of the Act. In Ex parie Barret; Mosley Green Coal and Coke Co., In re, certain shares of a company were taken in the name of B at the instance of C who was the real owner of the shares. Then there was a certain arrangement made between C and the directors, not within their powers, nor confirmed by the company, under which the shares were to be transferred into C's name. In the subsequent winding up proceedings, however, B's name was put up as the contributory. An objection was taken on his behalf, but without success. At p. 618, the Lord Chancellor observes as follow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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