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TMI Blog1966 (12) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... 99 to 4398, which at present stand in the name of Gordhanbhai Ishwarbhai Patel should be entered in his name and the register of members of the company rectified accordingly. As these two petitions raise common questions of fact as well as law, this judgment will govern both these petitions. It is necessary in considering these two petitions to state a few facts. Gordhanbhai Ishwarlal Patel, who will hereafter be referred to as Gordhanbhai, was one of the promoters of the company. He was the paternal uncle of both these petitioners. The company is a private limited company. It would appear that the said Gordhanbhai was entitled to 4994 equity shares of the company in consideration of his having assigned his business to the company with all its assets and some of the liabilities. By a letter dated 2lst December, 1957, he requested the company to allot these 4994 equity shares of Rs. 100 each to certain persons mentioned in that letter. Under the said letter, 300 shares were to be allotted to Navinchandra, petitioner in Petition No. 9 of 1966 and 300 shares were to be allotted to Prafulkumar, petitioner in Petition No. 10 of 1966. These allotments along with others came to be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both the petitioners. The company resists these petitions on the ground that, since the allotments were in favour of minors, they were void and the company was entitled to repudiate the said allotments. It is contended that the names of the petitioners were deleted from the register of members and the entry of the name of Gordhanbhai made instead according to instructions of the said Gordhanbhai. It is further contended that on the day that these allotments were cancelled, 600 shares were given to the 2nd respondent, Ratilal, the father of the petitioners, in lieu of the shares which were previously allotted in favour of his sons and therefore no prejudice is caused to the petitioners by reason of the cancellation of the allotments. Respondent No. 3, who is the managing director of the company, has supported the contention of the company. On these pleadings and after hearing the parties on 20th September, 1966, we framed two issues, viz. : "( i )Whether the names of the petitioners in each of the petitions after having been entered in the register of members of respondent No. 1 company have been, without sufficient cause omitted therefrom ? and ( ii )Whether the petitions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of these 600 shares before the allotments were cancelled by the company, and the name of Gordhanbhai entered on the shares. Since both the parties are not anxious to agitate the question of title, we have not gone into the same in these proceedings. The first question, therefore, which arises for consideration is whether the company omitted the names of the petitioners from its register of members in April, 1960, without sufficient cause. Shri Madon, in our view, is right in his contention that the original allotment made in favour of the petitioners was invalid because the allottees were minors and that the company was entitled to repudiate the allotment. But even assuming that was so, we do not think the company was entitled to proceed to delete the names of the petitioners from its register of members and rectify the register in respect of these 600 shares in favour of the deceased, Gordhanbhai without approaching the proper court in that behalf, especially as the interest of the minors was involved. In our view the company was not, in law, justified in deleting the names of the petitioners in the way it did and the omission of their names from the register of members is con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court, however, did not pursue the matter further on the question of applicability of article 181 because it held that even if article 181 was to apply to the application for rectification in that case, it was within time. The Supreme Court, however, observed that if article 181 did not apply then the only article that could apply "by analogy" would be article 120, under which also the application in that case was within time. Now Shri Ramanathan contends that article 181 would not apply in view of the observations of the Supreme Court, and the proper article to apply would be article 120, and he relies in support of his arguments on the decision of the Madras High Court in the same case, Jawahar Mills Ltd. v. Sha Mulchand and Co. [1949] 19 Comp. Cas. 138 , where rectification was sought on the ground that the forfeiture of shares by the company was illegal. Shri Ramanathan also relies on the observations of the Supreme Court in appeal from that decision, referred to earlier, that article 120 would apply to cases of rectifications "by analogy", if article 181 is not applicable. Shri Madon has suggested that the decision of the Madras High Court and of the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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