9911796707
TMI Blog1964 (6) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... ent No. 2, his mother, who is the petitioner, and his three sons and daughter, who are the respondents Nos. 3, 4, 5 and 6. After the death of Gour Gopal, the share register of the company was rectified on November 29, 1962, by striking out the name of Gour Gopal Saha as the holder of the said 1,940 shares and inserting the names of his said heirs and legal representatives as the holders of the said shares jointly. This rectification was done on the basis of an application dated January 21, 1960, by the respondent No. 2 for self and as mother and natural guardian of the said minor sons and daughter and also by the petitioner. The name of the respondent No. 2 has been recorded first and that of the petitioner last as the joint holders. It is alleged in the petition that the name of the respondent No. 2 has been recorded first in order to enable her to exercise voting rights in respect of the entire lot of shares by reason of the provisions in article 63 of the articles of association of the company. It is further alleged that by reason of such registration, the petitioner is not entitled to vote at any meeting of the company or to take part in the affairs of the company. Such registr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he holding was joint. The respondent No. 2 was called upon to agree to a partition, "amongst others" of the said 1940 shares and to agree to allotment of 324 shares in the name of the petitioner. On May 27, 1963, the solicitors of the respondent No. 2 wrote to the petitioner's solicitors that their client had no objection to the division of the shares and allotment to the petitioner of the shares to which she might be entitled on such division, subject to payment by the petitioner of her share of income-tax paid in respect of the said shares. This letter was answered by the petitioner's solicitors on June 12, 1963, by which they requested that an account of the income-tax alleged to have been paid in respect of the shares might be sent to them. On June 27, 1963, the solicitors for the respondent No. 2 informed the petitioner's solicitor that 1/6th share of income-tax, wealth-tax and estate duty paid in respect of the shares amounted to Rs. 16,317.11 np. including Rs. 1,890.23 nP. for interest. Particulars of this payment were asked for by the petitioner's solicitor and these particulars were furnished by the solicitors for the respondent No. 1 by their letter of July 8, 1963. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the name of the petitioner. The company is prohibited from registering a transfer unless it has received the instrument of transfer as required by section 108. I shall revert to this question later in this judgment. Mr. Ghose next contended that the powers of the court under section 155 are wide enough to decide the question of title and direct rectification of the share register. Undoubtedly the court has the power to decide any question of title in an application under section 155. But in this case there is no dispute with regard to the title. It is conceded by the respondent No. 2 that the petitioner is entitled to 1/6th of the shares left by the deceased holder. But in order to give relief to the petitioner the question that has to be decided is not a question of title but a question of allotment in severalty to the petitioner of 1/6th of the shares which stood in the name of the deceased holder. In order to do that, this application has to be converted into an action for partial partition of the estate of the deceased holder and thereafter a decree should be passed allotting a particular lot of 324 shares to the petitioner. There is sanction in Hindu law for a partial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ch. 225 . This was a case in which two persons were joint holders of shares. In this case also the articles provided that the first named holder was to be entitled to vote and the second named holder could neither vote nor be appointed proxy for a poll. It was held in an action brought by the joint holders against the company that in order to enable the joint holders effectually to exercise their voting power in all circumstances, they were entitled to have their holdings split into two joint holdings with their names in different orders and that the register of the company must be altered accordingly. It is to be noticed, however, that this was not an application under section 32 of the Companies (Consolidation) Act, 1908, which provided for rectification of the share register. The remedy was sought for in a regular suit which was tried as a witness action. Again it is to be noticed that in this case both the joint holders agreed that their holding should be split into two joint holdings in order to enable either of them to exercise voting rights and be appointed proxy. Then again in this very action an order was made in an interlocutory application by Astbury J. by which the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to rectification arose only incidentally, and the rectification that was directed was merely an incidence of the right declared in his favour by the decree, namely, that by reason of the fraud he was entitled to have his name removed from the register of members of the company. Mr. Ghose next referred to a decision of this court in Ramesh Chandra Mitter v. Jogini Mohan Chatterjee [1920] 1 ILR. 47 Cal. 901 . In this case a shareholder applied under section 38 of the Indian Companies Act, 1913, for removal of his name from the share register of the company. It was held that the powers of the court were unlimited under section 38 to determine questions necessary for decision in an application for rectification. But it was held also that in a simple case where immediate rectification was essential, it might be desirable to apply under section 38 ; but if the case was complicated, an action should be brought. This decision upholds the principle that the court in dealing with an application for rectification should not go into complicated questions which might arise, but should deal only with simple cases that could be disposed of conveniently in an application for rectification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be entitled to the notice of the company's meeting and also to vote at any general meeting of the company. A similar provision has been made by article 63. Mr. Chaudhuri submitted that, as a member, the petitioner was bound by the articles of the company, and merely because her name did not appear first among the joint holders, she could not claim rectification in respect of a separate lot of 324 shares. It was further argued that by reason of the provisions in the articles, the company could not remove the grievance made out in the petition, by rectifying the share register in order to enable a joint holder to exercise his or her voting rights. Mr. Chaudhuri next submitted that his client had stated in paragraph 6 of the affidavit-in-opposition affirmed by her on March 2, 1964, that the petitioner was a party to the application for mutation of the names of the joint holders on the death of Gour Gopal. For the first time in paragraphs 4 and 5 of the affidavit-in-reply affirmed by the petitioner on March 20,1964, she alleged that she had no knowledge of the application for mutation of the names of heirs and legal representatives of Gour Gopal and that she did not authorise S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany and also of persons who claim to have become members are also controlled by the statute. A company can be brought to book, only if it has committed a default or an act of omission in respect of a duty imposed upon it by the statute or its articles. If, therefore, an instrument of transfer is not lodged by a transferee of shares strictly in compliance with section 108, it cannot be said that the company has any obligation to register the transferee, or that by reason of refusal to register the company has committed a default as contemplated by section 155(1)(b). An application under section 155 can be made by a party when the company has acted in violation of the terms and conditions laid down in that section. The applicant must satisfy the court that the company has committed a breach of duty or a default as contemplated by that section. Unless, therefore, there is evidence of a breach of duty or default, an application under section 155 cannot be sustained. The petitioner's right to apply under section 155(1)(b) would arise only if there has been default on the part of the company in registering her name as a member in the share register of the company. But in this case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess the parties agreed to a mutual partition and allotment of 324 shares to the petitioner, the petitioner would claim a partition of the entire estate of Gour Gopal. Mr. Sen next referred to another letter from the petitioner's solicitor dated August 26, 1963, which is also annexed to the petition, in which it was contended that premises No. 84, Chowringhee Road, formed part of the estate of Gour Gopal as this was purchased by him in the benami name of his wife. Besides the above property, there was a piece of land at Paikpara being premises No. 61, Paikpara Road, and also at Digha, all of which were claimed to form part of the estate of Gour Gopal. In the last paragraph of that letter, it was claimed that unless there was agreement for amicable partition of the estate left by Gour Gopal, which included all the properties mentioned above, and also cash and jewelleries and the shares, a suit would be filed for partition. Mr. Sen contended that the letters in which partition has been claimed of the entire estate of Gour Gopal have been annexed to the petition, and the petitioner was relying upon those letters for the purpose of this application. The shares are not, according to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id 324 shares, as she was entitled to the same. But assuming that the company is bound to recognise the petitioner's claim to 324 shares, has the company the power to make a division of the shares among several joint holders and also to make an allotment of a specified number of shares to one of the joint holders, and thereafter register such a joint holder as the holder of the shares to be allotted in severalty ? Then again, is the company bound to recognise the petitioner's claim to 324 shares to which she claims to be entitled, as one of the heirs and legal representatives of the deceased holder ? It seems to me that, without a proper adjudication, the company is not bound to recognise the claim of one of the joint holders to a particular lot of shares. The company cannot take upon itself the duty of adjudicating upon the rights of several persons who claim to be entitled to the shares which were registered in the name of the deceased member, and which, after the death of the member, were registered in the names of the heirs of the deceased member as joint holders. Further, even assuming that the company is bound to recognise the ratio of the division among the heirs, namely, 1/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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