Mohan, J.
1. These appeals arise out of the common judgment of Ramaprasada Rao J., as he then was, rendered in company petitions Nos. 27 to 31 of 1976. A common question arose in all those petitions. The nature of relief was for rectifying the register of members of five incorporated companies, namely, Shardlow India Ltd., India Pistons Ltd., Tractors and Farm Equipment Ltd., Bimetal Bearings Ltd. and Reichhold Chemicals India Ltd.
2. The rectification sought for was for the removal of the name of Associated Printers (Madras) Ltd. from the share register of each of the above companies. A further relief was prayed for to effect that the petitioner before the learned single judge, the appellant before sub, should be substituted as the holder of such shares in the place of the said Associated Printers (Madras) Ltd.
3. The third respondent in the appeals was the third respondent before the learned judge in all a the company petitioners. He is none other than the brother of the petitioner before the learned single judge and the appellant before us. Since it was agreed between the parties that the pleadings in C.P. No. 31 of 1976, if referred to, would be enough to focus the controversy which is identical in all case, the learned judge noted that excepting in the matter of variance of the number of shares and the value there of, the point of law being one and the same, it would be sufficient to confine the consideration only to the pleadings in C.P. No. 31 of 1976.
4. The short are as follows :
Mr. Anantharamakrishnan, a leading industrialist, died on April 18, 1964, leaving his widow, two sons and two daughters. the third respondent is the eldest son. On the death of the said Anantharamakrishnan, his estate became liable to pay estate duty in the sum of over Rs. 150 lakhs. There were other liabilities also. Principally, the estate of Anantharamakrishnan consisted of agricultural lands in Tirunelveli District and shares in various companies including the five companies figuring as the first respondent before the learned single judge as well as before us,. On December 15, 1964, a letter was addressed to the Assistant Controller of Estate Duty to the following effect by the sons and the daughters including the appellant herein.
'We are the other accountable persons to the estate of the late Sri S. Anantharamakrishnan. Sri. A. Sivasailam has rendered the estate duty account. We agree to abide by the accounts so rendered by him and any explanation furnished by him with regard to estate duty matters will be binding on us.'
5. The third respondent being the eldest son, as stated above, took over the administration of the estate of his deceased father. According to him, the administration was taken over pursuant to the oral consent given by all the other her is including the petitioner. He had also secured a power of attorney from the co-heirs. The third respondent's case is that he entered upon the administration and management of the estate with the full knowledge and consent of the other heirs. He had to borrow money from time to time from third parties including the second respondent, Associated printers (Madras) Pvt. Ltd. There was an understanding at the time of such burrowing between the third respondent and the second respondent that the loan would be repaid either in cash or by transfer of shares of the estate in some other companies to and in favour of the second respondent company.
6. In March, 1974, the third respondent transferred 10 shares of the deceased, Anantharamakrishnan, in the first respondent company in favour of the second respondent company. The value of the shares stood at Rs. 583. The details of the transfer are as follows :
----------------------------------------------------------------------Name of company No. of shares Value per share PriceRs. Rs.----------------------------------------------------------------------1. Shardlow India 100 10 1,010Ltd.2. Reichhold 10 100 583Chemicals IndiaLtd.3. Tractors and 100 10 897Equipment Ltd.4. Bimetal 400 10 9, 644Bearings Ltd.5. India Pistons 1 10 50Ltd.---------------------------------------------------------------------Total : 12,184---------------------------------------------------------------------
7. The stand of the third respondent was that the transfer of shares from one company to another was effected by him bona fide and as administrator of the estate. It was not intended to defeat the rights of the estate. It was not intended to defeat the rights of any one. A letter to this effect was written on August 26, 1974, by the third respondent to the appellant and it reads as follow :
'Madam,
Reference our letter of the 10th June, I am detailing the position below.
The shares in Reichhold Chemicals India Ltd., Bimetal Bearings Ltd., Shardlow India Ltd., Tractors and Farm Equipment Ltd. and India Pistons Ltd. in the name of father were transferred to Associated Printers (Madras) Private Ltd. On 8th March, 1974, in partial liquidation of the amounts due to them by the estate. Details of the shares with the price realised are given below :
----------------------------------------------------------------------Name of company No. of shares Value per share priceRs. Rs.----------------------------------------------------------------------1. Shardlow India 100 10 1,010Ltd.2. Reichhold 10 100 583Chemicals IndiaLtd.3. Tractors and Farm 100 10 897Equipment Ltd.4. Bimetal Bearings 400 10 9,644Ltd.5. India Pistons 1 10 50Ltd.---------------------------------------------------------------------Total : 12,184--------------------------------------------------------------------- In this connection, I wish to advise that these shares were transferred at the values determined under the Wealth-tax Rules, 1957.
As regards filing of wealth-tax returns for the assessment year 1974-75 (valuation date 31st March, 1974), the assets detailed in the attached sheet will form part of the estate.
The following liabilities are to be borne equally the legal heirs and should thus be claimed as a deduction in their individual wealth-tax returns.
Rs.1. Sri Paramakalyani Education Society 13,32,147.202. Higginbothams P. Ltd. 2,40,000.003. Associated Publishers (Madras) P. Ltd. 3,67,613.464. The Madras Advertising Co. P. Ltd. 1,50,000.005. Associated Printers (Madras) P. Ltd. 3,28,550.17 The other amounts due as on March 31, 1974, namely, Rs. 13,902.40 will be shown in the hands of the estate for which a separate return will be filed. Please let us have your acknowledgment of receipt of this letter.'
8. On September 4, 1974, the appellant before us wrote to the third respondent as follows :
'Now that the estate duty has been fully discharged. I shall be pleased if you will render account showing the total assets and liabilities of the estate as on March 31, 1974. This information is required to enable me to submit my wealth-tax returns. The particulars given in your letter Ref. nil, dated August 26, 1974, are not sufficient and my auditor has required this information to be obtained from you.
I also request you to send me copies of the wealth and income-tax returns submitted for the year ended March 31, 1974.
The income and expenses statement of the estate for this period may also be sent.
I shall be grateful if these informations are furnished as early as possible.'
9. To this, a reply was issued on September 23, 27, 1974, enclosing a copy of the estate account for the period July 1, 1973, to June 30, 1974. The said reply is extracted below :
'With reference to your letter of the 4th September, I am sending her with copies of the wealth-tax and income-tax returns of the estate for the assessment year 1974-75.
Apart from the assets and liabilities mentioned in the wealth-tax return, there are no other assets relating to the estate. You will observe from the covering letter to the Wealth-tax Officer relating to the wealth-tax return that shares in Amalgamations P. Ltd. were already transmitted to the five legal heirs. The wealth-tax assessments are pending from assessment year 1965-66 and the wealth-tax liability, if any, would be know when a ruling on the basis of valuation of shares in Amalgamations P. Ltd. is given by the Central Board of direct Taxes with whom this matter is pending.
A copy of the estate account for the period 1st July, 1973, to 30th June, 1974, with Amalgamations P. Ltd. is sent herewith.'
10. On October, 21/25, 1974, the appellant's husband, as power of attorney-holder, replied to the third respondent that the appellant was very sorry and surprised to be informed that the shares held by their father in the various companies have been sold by the third respondent in alleged satisfaction of debts due to Associated Printers (Madras) P. Ltd. He also stated that she was surprised that she was never informed about alleged debt and that she would have paid the amount if any amount was really due and kept the shares herself. According to her, the third respondent did not even choose to offer the shares to a co-owner who is entitled to a pre-emptive right to purchase the same. Therefore, the transfer of the shares was illegal and was not binding on her. By the said letter, she also offered to purchase the shares at the rates mentioned in the letter of the third respondent to the extent that was due to her. The third respondent was called upon to arrange to have them retransferred to her name within a week failing which necessary steps would be taken in that regard.
11. A similar letter was issued to the second respondent-Associated Printers (Madras) P. Ltd. and the other companies wherein the stand taken was that the transfer was made without the consent of the appellant and as such, it was null and void. To this letter, Shardlow India Ltd. replied to the appellant by its letter dated March 24, 1975, as follows :
'We are in receipt of your letter dated 13th March, 1975, and in reply wish to state that this company had received a valid request from Mr. A. Sivasailam, on behalf of the estate of the late Sri. S. Anantharamakrishnan, for transfer of the shares in favour of Associated Printers (Madras) P. Ltd.
The directors, in their discretion as conferred under the articles, entertained the request and transferred the shares. The company is not concerned with individual differences and the same cannot render void a validly effected transfer.
The question of rectification of the register of members, therefore, does not arise. There is no mistake in the register which requires rectification.'
12. On April 2, 1975, again the appellant called up Shardlow India Ltd. to rectify the register. The said company, by its reply dated April 29, 1975, took the stand that the transfer had been properly effected acting in accordance with the provisions of the articles of association and, therefore, it was unable to comply with her request. It was under these circumstances that the company petitions, C.P. Nos. 27 to 31 of 1976, came to be filed.
13. Under section 155 of the Companies Act, 1956, the appellant launched these petitions for rectification of the share register of the first respondent company :
(i) by removing the name of the second respondent as the holder;
(ii) substituting the petitioner's (appellant herein) name as the holder of the shares; and
(iii) declaring that she would be entitled to hold the shares in her own name.
14. In the petitions, a stand was taken that the third respondent had no authority or power to transfer any assets belonging to the estate of the father without her knowledge or consent specifically and that any such transactions are not binding on her. The third respondent had, by virtue of his overwhelming authority and control over the said companies, either prevented the name of the petitioner being properly entered in the books or otherwise transferred or disposed of the shares belonging to her late father in which she is entitled to 1/5th share, to companies controlled by the third respondent.
15. In the counter-affidavit filed on behalf of the first respondent, the principal stand taken was that section 155 of the Companies Act provides only a summary remedy. It is intended only to adjudicate upon questions arising under the said Act between members. The petitioner does not claim to be a member of the respondent-company. She claims to be one of the heirs of a deceased member. The third respondent had explained that he administered the estate and signed the transfer document with the knowledge, connivance and acquiescence of the petitioner. In a petition of this nature, complicated questions of law and disputed questions of fact cannot be determined. The third respondent acted as de facto administrator and manager of the estate of the deceased Anantharamakrishnan with the consent of the other co-heirs. It is incorrect to say that the first respondent is under the control of the third respondent.
16. The articles of association give absolute power to the first respondent to refuse to register a transfer. As the petitioner has not lodged a transfer in her favour for registration, the question of refusal has not arisen. The registration of shares in favour of the second respondent is binding on the petitioner as an heir of the deceased, Anantharamakrishnan. The transfer has been registered bona fide and in accordance with law. In view of the fact that the petitioner is a co-owner, she is not entitled to any relief.
17. The third respondent, in his counter, took the stand that the estate of Anantharamakrishnan was liable to pay estate duty to the tune of Rs. 150 lakhs. In the course of the administration of the estate, the borrowings from some of the companies including the second respondent had to be repaid either in cash or by transfer of shares. In his capacity as the administrator, transfers were effected bona fide. Not only the petitioner, the other heirs of the deceased, Anantharamakrishnan, were aware of the management of the estate by the third respondent. In fact, they had acted on such management, derived benefit thereunder, connived thereat and acquiesced therein. Therefore, they are estopped. Again, the stand taken is that section 155 of the Companies Act, being a summary remedy, it cannot be invoked for the present purpose. In exercising such jurisdiction, the court cannot partition the shares of the deceased shareholder. The petitioner is not entitled to have a partial partition of the estate with regard to the shares alone.
18. The management of the estate of the deceased father of this respondent had been done with the consent of all the heirs including the petitioner which consent was oral. No succession certificate, probate, letters of administration or any other representation to the estate of the deceased was taken as it was found not necessary. This respondent was acting as a de facto administrator with knowledge, connivance and acquiescence of the legal heirs including the petitioner. The estate duty was a statutory liability which had to be discharged.
19. In the counter-affidavit, the details of the borrowing from each of the companies are also furnished. There were also debts incurred during the lifetime of Anantharamakrishnan himself. The transfer of shares was made in the best interests of the estate in his capacity as the administrator of the estate. The transfer was made only to a 100 per cent. subsidiary of Amalgamations P. Ltd. in which the petitioner has one-fifth shareholding. Therefore, the petitioner cannot be said to be prejudicially affected by such transfer of shares whose value is insignificant, namely, Rs. 12,184. This clearly shows that these petitions had been filed with ulterior motives.
20. In the reply affidavit, the petitioner reiterated her stand.
21. Ramaprasada Rao J. held that there was no evidence to show that the third respondent was controlling all the directors in the concerned companies; nor did he have a sway over them so as to lead them to the goal which he desired. The learned judge further found that it was only on April 20, 1972, that the petitioner-appellant herein decided to cancel the power of attorney in favour of the third respondent and further decided to handle the matter directly. The question, therefore, would be whether the third respondent could continue to act.
22. In determining this question, the learned judge took the view that the estate in the hands of the third respondent was impressed with the character of a constructive trust and unless the dealings of the possessor of the estate are illegal and void ab initio and not to the benefit of the co-owners of the estate, there could not be no rightful challenge. In so far as it was not decided that the transfers in question were effected to pay off the pre-existing debts of the deceased, Anantharamakrishnan, or to pay off public dues such as estate duty or wealth-tax, it could not be held to be illegal or in any way prejudicial to the other heirs, more so, when the third respondent was acting as administrator. This would be the position even if section 94 of the Indian Trusts Act is applied.
23. It was further held by the learned judge viewing the matter from the point of view of section 304 of the Indian Succession Act that all payments made in the course of due administration are saved even in the case of a person wrongfully acting as executor.
24. Section 108 of the Companies Act bars the entertainment of a request for transfer of shares by an incorporated company because the request is not by all the co-owners, but only by one disgruntled and dissatisfied co-sharer. The authority in this regard is Mannalal Khetan v. Kedar Nath Khetan [1977] 47 Comp Cas 185 (SC). The petition was also premature.
25. In any event, the third respondent acted as de facto trustee or at any rate as an administrator. As such administrator de son tort, his action is valid.
26. The petitioner could not be hold to be a person aggrieved because she was not a member of the company. In fine, he held that section 155 of the Companies Act being a summary remedy, the question of title cannot be gone into. If the case of the petitioner were to be accepted, it would result in allotment of shares in severalty. The same is not feasible and he refused to exercise the discretion and dismissed the petition. It is under these circumstances that the present appeals arise.
27. Mr. Vedantham Srinivasan, learned counsel, appearing for the appellant, after detailing the facts, would state that this is not a case of transfer of a share. It only means 'transmission' in consequence of death of any member. In this case, such transmission of shares did occur on the death of Anantharamakrishnan, the father of the appellant and the third respondent. Such a transmission clause is found in article is found in article 21 of the articles of association of the first respondent-company. The various requirements under the said article remain unsatisfied in this case. Therefore, the transfer cannot stand in the eye of law. The learned single judge had completely missed this vital aspect of the matter.
28. Equally, there is no scope for the application of section 108 of the Companies Act. That will arise only if the title of the appellant is in question. Here, it cannot be denied that, on the death of Anantharamakrishnan, the appellant become entitled to one-fifth share. On the death of a Hindu male dying intestate, the heirs succeed to the estate as tenants-in-common under the provisions of section 19 of the Hindu Succession Act and not as joint tenants. As such, the appellant had every right to question the action of the third respondent, more so, when the authority of the third respondent had been cancelled on June 12, 1972. Under these circumstances, section 108 of the Companies Act cannot be a bar for the relief prayed for. A clear authority on this is K. P. Antony v. Thandiyode Plantations P. Ltd. . A special remedy had been provided under section 155 of the Companies Act and it cannot be said that it involves any complicated questions of law or disputed questions of fact when the title is not disputed. It is perfectly open to the appellant to invoke section 155 of the Companies Act. In support of this submission, reliance is placed on Shakuntala Rajpal v. Mckenzie Philip (India) P. Ltd. .
29. In so far as section 22 of the Hindu Succession Act gives a right of pre-emption to co-sharer to acquire the property, the appellant offered to buy the shares on payment, and in order to defeat the rights, a transfer had been effected, without the consent and knowledge of the appellant when actually if the appellant had been informed about the nature of debts, she would have paid off the value of the shares and kept them herself. At least, for the sake of sentiment, certainly, the transfer is clearly void. The learned judge was not correct in relying on either section 94 of the Indian Trusts Act or section 304 of the Indian Succession Act.
30. Dr. Chitaley, appearing for the third respondent, would urge that the petitioner is certainly not interested in the rectification of the register of the company but would only be anxious in the purchase of the shares. In this case, the transfer is for the benefit of the estate, as seen from the details furnished in the counter-statement. The necessity for the borrowings had also been set out fully.
31. Since the debts were incurred prior to the debts incurred by Anantharamakrishnan, the question is, if the administrator acts improperly, is there any remedy under section 155 of the Companies Act. In this case, the transfer of shares was made only to a 100 per cent. subsidiary of Amalgamations Ltd., in which the petitioner has also 1/5th share. It is the common case, as pointed out by the learned trial judge, that the estate duty liability of Anantharamakrishnan came to Rs. 150 lakhs. Section 155(1A) of the Companies Act talks of transfer without sufficient cause. Where there is such sufficient cause, it is not open to contend otherwise. Sub-section (3) of the said section does not apply because if it is the case of the appellant seeking to establish a title, it cannot be done in the absence of the other co-shares, because it is well-settled now that the proceedings under section 155 are in the nature of a summary trial. In support of this submission, learned counsel relies on Hemlata Saha v. Stadmed Pvt. Ltd. [1964] 34 Comp Cas 875 (Cal). Therefore, the company court has no power to partition and divide the shares. This case arose after the amendment. As held therein, an allotment can be done only in an action for partition.
32. Again, in Mahendra Kumar Jain v. Federal Chemical Works Ltd. , it was held that where title to the share was disputed, section 155 of the Companies Act could not apply and the parties were referred to a suit, since section 155 proceedings were summary in nature.
33. In Daddy S. Mazda v. K. R. Irani : 78CWN872 , a serious charge of forgery in the company records arose and it was held that, without letting in evidence, section 155 cannot be invoked. This respondent would take it that his position is that of an intermeddler. Even then, whether his actions could be questioned is the point to be determined. Learned counsel referred to section 2(11) of the Code of Civil Procedure containing the definition of 'legal representative' who would include a person who would intermeddle with the estate of the deceased. Again, the Estate Duty Act, under section 2(12)(ii), takes within it an 'intermeddler'. As to what is the position of the executor or administrator of the estate of a deceased and whether and whether he could be considered as a legal representative is dealt with in Mulla's Hindu Law, fifteenth edition, page 376A. That is exactly the position here.
34. Even assuming that this respondent is an executor de sen tort as pointed out in Halsbury's Laws of England, fourth edition, volume 17, in para 758, the lawful acts of an executor would bind the estate. But, on the same line of reasoning, section 94 of the Indian Trusts Act which deals with the constitution of trustees, or section 304 of the Indian Succession Act, which talks of payment in due course, is held to be binding.
35. Article 21 of the articles of association of the company, which is relied on by the other side, is a transmission clause. Hence, it has no application.
36. No doubt the transfer form has not been correctly filled in. But the signature as against the transferor shows as an executor. With regard to the method of transfer, all that the law lays down is that an instrument of transfer must be executed. Otherwise, there are no restrictions for transfer, except the one imposed by the article. The appellant, in effect and substance, questions the authority of the administrator to administer the estate. He cannot do so after having had the benefit of the third respondent's administration. Whether such a challenge is permissible under section 155 of the Companies Act is the real question. His submission is that the same is not permissible.
37. It is further submitted by learned counsel that, in the petition, it is not challenged that the transfer of shares was not in the proper course of administration of the estate, and the only challenge is to the authority of the third respondent. That the section is of summary nature is evidenced from the fact that sub-section (4) provides for appeal only on a question of law.
38. With regard to transmission of shares, Palmer's Company Law, twenty-third edition, page 495, paragraph 39-34 sets out the procedure. That will squarely apply.
39. Lastly, it is submitted that it is the case of a judge having discretion but failed to exercise the same, how could it amount to substantial question of law, enabling this court to interfere.
40. Mr. Vedantham Srinivasan, in his reply, submits that the principle of English law of administrator de son tort does not arise. As submitted earlier, under the Hindu law, when a Hindu male dies intestate, the heirs take the estate as tenants-in-common. That is clear from section 19 of the Hindu Succession Act, As such tenant-in-common, the petitioner has every right to question the actions of the third respondent; more so when his authority had been revoked. To a wrong-doer, the court cannot extend its protection.
41. Section 155 of the Companies Act is not summary in nature. It has been so laid down in Gulabrai Kalidas Naik v. Laxmidas Lallubhai Patel of Baroda : (1977)GLR42 . It states that all questions in relation to transfer, right to transfer and heirship should be decided by a court. With regard to transmission, Schedule I, Table A of the Companies Act deals with the same. Therefore, that alone will be applied. The company has a fiduciary duty to recognize only the legal representative. Otherwise, no title can pass. Shakuntala Rajpal v. Mckenzie Philip (India) P. Ltd. [1986] 60 Comp Cas 545, lays down so. Whether there is a transfer by operation of law, one cannot bring in concepts like administrator de son tort, etc. That is clearly unwarranted.
42. We will now proceed to deal with the respective submissions raised on either side. We have already set out the facts in detail to show as to low the transfer of shares came to be effected by the third respondent in favour of the second respondent and how it was protested. One thing is clear that, during his lifetime, Anantharamakrishnan had incurred debts as follows :
Rs.Higginbothams Ltd. 2,40,000Madras Advertising Co. Ltd. 1,00,000Associated Publishers (Madras) Ltd. 1,25,000
43. The counter-statement of the third respondent states that these figures represent only the principal amount borrowed without adding interest thereon. Similarly, there was also liability to pay estate duty to the tune of about Rs. 150 lakhs. They undoubtedly being legal liabilities had to be discharged and there is no escape from the same. The third respondent is the eldest son who took over the estate for the purpose of administration. It is in this connection that the letter dated December 15, 1964, addressed to the Assistant Controller of Estate Duty, Madras-34, assumes importance. According to him, with the oral consent of the other co-shares, he entered upon the administration. Such administration was fully with the knowledge not only of him, but also of the other two co-sharers. It is in the course of such administration that the transfer came to be effected for the purposes of equation. It requires to be carefully noted that the transfers were only to a 100% subsidiary of Amalgamations Ltd. in which the appellant had 1/5th share. All that the appellant would state is that the third respondent had no authority to transfer the shares in the manner he had done and called upon him to have the shares retransferred in which event done and called upon him to have the shares retransferred in which event she would have purchased the same. As a matter of fact, in the letter dated October 25, 1974, it is categorically stated :
'You will, I am sure, remember that she is entitled to 1/5th share of the estate and as such she is a co-owner in the entire estate. She is surprised that you never informed her about this alleged debt and she would have paid the amount, if any, really due and kept the shares herself. Your did not even choose to offer the shares to a co-owner who is entitled to a pre-emptive right to purchase the same.'
44. Therefore, rightly, it is urged by Mr. Chitaley that throughout the appellant is thanking only in terms of purchases of shares. This pre-emptive right is based on the right found in section 19 read with section 22 of the Hindu Succession Act, 1956. Section 22 reads as follows :
'(1) Where, after the commencement of this Act, an interest in any immovable property of an intestate, or in any business carried on by him or her, whether solely or conjunction with others, devolves upon two or more heirs specified in class I of the Schedule,and any one of such heirs proposes to transfer his or her interest in the property or business, the other heirs shall have a preferential right to acquire the interest proposed to be transferred.
(2) The consideration for which any interest in the property of the deceased may be transferred under this section shall, in the absence of any agreement between the parties, be determined by the court on application being made to in this behalf, and if any person proposing to acquire the interest is not willing to acquire it for the consideration so determined, such person shall be liable to pay all costs of or incident to the application.
(3) If there are two or more heirs specified in class I of the Schedule proposing to acquire any interest under this section, that heir who offers the highest consideration for the transfer shall be preferred.
Explanation. - In this section 'court' means the court within the limits of whose jurisdiction the immovable property is situate or the business is carried on, and includes any other court which the State Government may, by notification in the Official Gazette, specify in this behalf.'
45. But, this is a case of administration of an estate by the eldest coparcener. It is only in the courses of such administration that he had chose to transfer. We are clearly of the opinion that the rightness or wrongness of the said transfer cannot be questioned within the narrow scope of section 155 of the Companies Act. That section (prior to the amendment) may be extracted now :
'155. Power of court to rectify register of members. - (1) If -
(a) the name of any person -
(i) is without sufficient cause, entered in the register of members of a company, or
(ii) after having been entered in the register is, without sufficient cause, omitted therefrom; or
(b) defaults is made, or unnecessary delay takes place, in entering on the register the fact of any person having become, or 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 reject the application or order rectification of the register; and in the latter case, may direct the company to pay the damages, if any, sustained by any party aggrieved.
In either case, the court in its discretion may make such order as to costs as it thinks fit.
(3) On an application under this section, the court -
(a) may decide any question relating to the title of any person who is a party to the application to have his name entered in or omitted from the register, whether the question arise between members or alleged or between members or alleged members on the one hand and the company on the other hand; and
(b) generally, may decide any question, which it is necessary or expedient to decide in connection with the application for rectification.
(4) From any order passed by the court on the application, or on any issue raised therein and tried separately, an appeal shall lie on the ground mentioned in section 100 of the Code of Civil Procedure, 1908 (5 of 1908) -
(a) if the order be passed by a District Court, to the High Court;
(b) if the order be passed by a single judge of a High court consisting of three or more judges, to a Bench of that High Court.
(5) The provisions of sub-sections (1) to (4) shall apply in relation to the rectification of the register of debenture holders as they apply in relation to the rectification of the register of members.'
46. Sub-section (1)(a) clearly talks of 'without sufficient cause'. In this case, it cannot be contended that there was no sufficient cause. It would equally follow that sub-section (3) cannot apply because the question of title cannot be decided in the absence of the other co-shares. It is only a disgruntled co-sharer who has come forward to claim right in the shares. We do not know how she could be definite before a partition by metes and bounds takes place. But will ultimately deal with the question of allotment of shares. In this context, Hemlata Saha v. Stadmed P. Ltd. : AIR1965Cal436 , is relied on. This case arose after the amendment of section 155, wherein the headnotes (of AIR) read thus :
'An allotment in severalty of the shares can only be done in an action for partition, unless the parties agree to amicable partition. The company cannot take upon itself the obligation to divide and allot the shares among the several joint holders and indeed, under Companies Act, 1956, it has no power to do so. To hold that the company can, at the request of one joint holder of shares, insert his or her name as the separate holder of a particular lot of those shares, would be to introduce entirely unwholesome principles which may be capable of causing serious mischief and prejudice. If it is recognised that the company has the power to make an allotment in severalty of a lot of shares held jointly, it will amount to recognition of a power in the company to alter its register of members at any time and at the request of any joint holder of shares. Such a power the company does not posses and it is for the purpose of avoiding the serious mischief that may be caused to members of a company, by giving to the party, that the mandatory provisions of section 108 have been introduced. Ramesh Chandra Mitter v. Jogini Mohan Chatterjee, AIR 1920 Cal 789; ILR [1920] Cal 90 and Siemens Bothers and Co. Ltd. v. Burns [1918] 2 Ch 324 relied on. Burns v. Siemens Brothers Dynamo Works Ltd. [1919] 1 Ch 225 distinguished. Reese River Silver Mining Co. Ltd. v. Joseph Mackrill Smith [1969] LR 4 HL 64 explained.
A company cannot rectify its share register by recording a transfer unless an instrument of transfer has been furnished by the transferee as required by section 108 of the Act. Until such an instrument of transfer has been furnished, a company owes no duty or obligation to the transferee. Where, 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) of the Act.'
47. However, as we observed above, Mr. Vedantam Srinivasan would urge that the pre-emptive right of a coparcener, conferred under section 22 of the Hindu Succession Act cannot be taken away.
48. We will now refer to the Hindu Succession Act, First of all, we find no application to this section, because it does not say how and when the right of preference is to be exercised . Secondly, at any rate, that cannot be a matter to be agitated under section 155 of the Companies Act.
49. In Mahendra Kumar Jain v. Federal Chemical Works Ltd. , it is stated thus :
'It is well settled that section 155 confers a jurisdiction of a summary nature and that it contemplates a relief which is available at common law as well. The primary remedy is the remedy under the general law. The remedy under the companies Act is a summary remedy. The object of this provision is not to supersede or oust the remedy at common law. As observed by Shah J. in Rao Saheb Manila Gangaram Sindore v. Western India Theatres Ltd. [1963] 33 Comp Cas 828 (Bom) :
'..... this procedure is resorted to by persons aggrieved by the refusal of the directors of a company to rectify the register and enter the name of the transferee in place the name of the transferor of shares in the register of members, but it is recognised by a long line of judicial decisions that the court is not bound to give relief under that proceeding if it finds that complicated questions of facts and law involved. It has got the power to direct the party concerned to a civil court and to file a proper action for the purpose of securing the relief which he seeks in the summary proceeding.' Primarily, the civil court has jurisdiction to decide such matters and it is only by way summary remedy that section 155 come in. If the petition's title is not seriously questioned and the matter is such as could be decided on affidavits, there will be no objection to a person applying for the summary remedy.
In Sussex Brick Co., In re [1904] 1 Ch 598 it was held that where facts requiring consideration are complicated and not simple, a separate action alone would be the proper remedy.
In Ex Parte, Shaw [1877] 2 QBD 463 (CA), the dictum was that 'it is a matter of discretion whether the court or judge will exercise the summary jurisdiction. In a complicated or doubtful case, the jurisdiction ought not to be exercised, but when the legal title in the application is clear, the order ought to be made.'
The same view has been adopted by the Calcutta, Madras, Pepsu and Hyderabad High Courts in :
Mahadeo Lal Agarwala v. New Darjeeling Tea Co. Ltd., : AIR1952Cal58 , T. A. K. Mohideen Pichai Taraganar v. Tinnevelly Mills Co. Ltd. : AIR1928Mad571 , Panna Lal Sood v. Jagatjit Distilling and Allied Industries Ltd. [1952] 22 Comp Cas 343 (Pep) and Mohamed Athar v. Narsingh Das Jaju, AIR 1953 Hyd 127.
In Dhelakhat Tea Co. Ltd., In re [1958] 28 Comp Cas 62 (Cal) P. B. Mukharji J. help (at p. 66) : '..... disputed question of fact should not be tried in a summary procedure in an application for rectification of the share register under section 155 because they are more appropriate subject for a trial in a suit on evidence after a full discovery of documents and inspection.'
50. In this case, the rights of the appellant with reference to his shares are yet to crystallise, we will now refer to daddy S. Mazda v. K. R. Irani : 78CWN872 , wherein, at pages 43 and 44, it was held :
'The main question involved in this appeal is where serious disputed questions of fact are involved in an application under section 155 of the Act, is it open to the court to make an order for rectification without taking evidence on the disputed questions of fact or without relegating the parties to a suit In other words, in a case where prima facie serious disputed question of fact are raised by the petitioner himself in an application under section 155 of the Act, is it open to the court to proceed to adjudicate upon the disputes without taking in to consideration oral and documentary evidence on the question of the disputes raised The decision of this appeal would depend upon the answer to this question.'
51. It was answered as follow (at page 53) :
'In our view the intensity, the depth and the sweep of the allegations are such that it is not possible for the court to come to any conclusion about the truth of the allegation except upon evidence which can be tested by cross-examination of witnesses. There can be doubt that the allegations relate to serious disputed question of fact and such disputes can only be resolved by oral testimony tested by cross-examination and by no other means. To hold that disputes such as those raised in the application can and ought to be resolved on averments made in the affidavits would defeat the purpose and object of the summary procedure prescribed by section 155 of the Act. The principle to be followed by courts in such cases are well-settled and the trial court has taken notice of those principles. But, having taking notice of those principles, the trial court ought not to have directed rectification of the share register having regard to the serious disputes raised by the parties with regard to the title to the shares.
Counsel for the appellants is right in his contention that the discretion of the court should not have been exercised in favour of the respondent directing rectification of the share register of the company in a summary proceeding under section 155 of the Act, having regard to the serious disputed question of fact involved and also the serious charges of fraud, forgery and impersonation made by the respondent. We cannot, however, accept the appellant's contention that the parties should be relegated to a suit, as,in our view, the same object can be achieved if the application is directed to be tried on evidence after discovery and inspection of documents by the parties. The purpose of having adjudicated upon taking in to consideration, the evidence adduced by the parties, both oral and documentary.'
52. But, this case is clearly distinguishable in view of the serious allegations of 'fraud.' Therefore, on the basis of this ruling, it cannot be contended that it is not summary in nature.
53. One other ruling on this point is Gulabrai Kalidas Naik v. Laxmidas Lallubhai Patel of Baroda [19787] 48 Comp Cas 438 (Guj). There, the learned judge lays down (at page 445) :
'It must be made distinctly clear that there is nothing in the language of section 155 which even remotely suggests that jurisdiction conferred upon the court is of a summary inquiry, and that it precludes or for bids a full thorough inquiry in respect of the title to shares claimed one way or the other. On the contrary, there is clear inherent evidence in the provisions contained in sub-section (3) to show that the jurisdiction is not of summary or limited nature. Now, if wider jurisdiction is conferred on the court, would it be proper to limit it to make it fruitless by a process of interpretation It was then said that a long line of decisions has clinched the issue and the matter is no more res integra. The matter having been examined on principle, I would now turn to the authorities relied upon on either side to show whether the conclusion reached by me on the language of section 155 is in any way in conflict with the legal position which was more often repeated to me to be a settled legal position.'
54. But, we are obliged to note the following observations (at page 456) :
'A. H. Mehta, however, said that, a part from the authorities herein before discussed by me, the point is no more res integra and is finally clinched by a decision of the Supreme Court in Public Passenger Services Ltd. v. M. A. Khader [1966] 36 Comp Cas 1. The pertinent. Observation specifically relied upon reads as under (page 6) :
'Counsel for the appellant contended that the relief under section 155 is discretionary, and the court should have refused relief in the exercise of its discretion Now, where by reason of its complexity or otherwise the matter can more conveniently be decided in a suit, the court may refuse relief under section 155 and relegate the parties to a suit. But the point as to the invalidity of the notice dated January 20, 1957, could well be decided summarily, and the courts below rightly decided to give relief in the exercise of the discretionary jurisdiction under section 155. having found that the notice was defective and the forfeiture was invalid, the court could not arbitrarily refuse relief to the respondents.' Now, with great respect, it is not possible to agree with Mr. Mehta that the question that the remedy under section 155 is of summary nature and that as soon as complex or complicated question are raised. the party ought to be relegated to a suit is concluded by this decision. In the initial part of the question there is submission of counsel. While disposing of the contention the court observed that where a matter can be more conveniently decided in a suit the court may refuse relief under section 155. It is more a matter of convenience and less a matter touching on the jurisdiction. The form in which the contention is now raised was not canvassed before the supreme Court and a passing observation was made that jurisdiction under section 155 is of a summary nature. True,even the passing observation of the Supreme Court is binding and may conclude the point, yet the ratio is not to the effect that as soon as a complex or complicated question in raised in a petition under section 155, the court becomes functus officio. Hence, it is not possible to accept the submission of Mr. Mehta that the matter is no more res integra and this court cannot undertake examination of the contention whether section 155 is only limited to cases where relief can be granted in a summary way.'
55. This case is distinguishable for two reasons :
(i) Because it is a case of forgery, which unravels everything;
(ii) The learned judge found, as seen from page 458 : 'Therefore, again with respect, I find no complicated or complex question raised in this petition.'
56. Section 155(4) also describes that the remedy under section is of summary nature. the said sub-section reads :
'From any order passed by the court on the application, or on any issue raised therein and tried separately, an appeal shall lie on the grounds mentioned in section 100 of the Code of civil Procedure 1908.'
57. If, therefore, only on a question of law, an appeal would arise, that is a point as to the nature of jurisdiction exercised by the original authority.
58. The positive stand of the third respondent is that he dealt with the estate as an administrator de son tort. No doubt, a letter was given on December 15, 1964, stating :
'We agree to abide by the accounts so rendered by him and any explanation furnished by him with regard to estate duty matter will be binding on us.'
59. This came to be revoked on June 12, 1972. The complaint of the appellant is that in spite of such revocation, without informing her, the transfer of shares had been made. It is important to note at this stage that in the petition filed before the learned single judge, it is not challenged any where that the transfer of shares was not in due course of administration of the estate, but what is challenged is the authority to transfer. Even in the grounds of appeal, grounds Nos. 2 and 3 read as follows :
'2. The learned company judge has erred in holding that respondent No. 3 was authorised to borrow moneys or to administer the estate of the late Anantharamakrishnan forgetting that he was given a very limited render accounts by her letter dated December 15, 1964, and to do no other thing on her behalf.
3. The finding that the petitioner gave oral consent to the third respondent to enter upon the administration of the estate of the late S. Anantharamakrishnan and incurred debts and entered in to arrangements for repayment of loans by transferring shares to the second respondent company is contrary to record and is unsupportable in the teeth of the revocation of the limited authority given to respondent No. 3 in and by the letters of the appellant-petitioner dated April 20, 1972, and October 25, 1974, expressly prohibiting respondent No. 3 from acting for her on and from April 20, 1972.'
60. Where, therefore, as executor de son tort, if shares had been transferred what is the position in law It is in this view that we refer to section 2(11) of the Code of Civil procedure :
''legal representative' means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased and where a party sues or is sues in a representative character the person on whom the estate devolves on the death of a party so suing or sued.'
61. The Estate Duty Act, 1953 (Central Act 34 of 1953), in section 2(12)(ii) reads :
''legal representative' means a person, who in law represents the estate of a deceased person, and includes - ...
(ii) as regards any obligation under this Act, any person who takes possession of, or intermeddles with, the estate of a deceased person or any part thereof,' (emphasis (Here printed italics.) supplied).
62. Mulla's Hindu Law, fifteenth edition, paras 376 and 376A read :
'376. Vesting of estate in Hindu executor or administrator. -
The executor or administrator of a deceased Hindu is his legal representative for all purposes, and all the property of the deceased vests, in him as such....
376A. Power of Hindu executor or administrator to dispose of property. - ..... (2) A Hindu administrator has power to dispose of the property of the deceased vested in him (section 376 above).'
63. In Halsbury's Laws of England, fourth edition, volume 17, in para 758, it is stated :
'Effect of acts of executor de son tort. - 758. Lawful acts bind the estate. - Generally speaking, all lawful acts done in the professed administration of the estate, by a person purporting to act as personal representative which a rightful executor would have been bound to perform in due course of administration, bind the estate ....
A person who takes possession of or intermeddles with the property of a deceased person without the authority of the personal representatives or the court is, as regards any liability for payment of death of death duties or capital transfer tax, a 'personal representative' within the definition contained in the Administration of Estates Act, 1925.'
64. About 'executor de son tort intermeddling' Williams, Mortimer and Sunnucks on executors, Administrators and probate, 16th edition, at page 92, state :
'Executor de son tort - intermeddling. - A person not lawfully appointed executor or administrator and without title to a grant may by reason of his own intrusion upon the affairs of the deceased be treated for some purposes as having assumed the executorship. Such an intermeddler is called a tort executor or an executor de son tort (i.e., on his own wrong). The same terms is used whether the deceased died testate or intestate, for the law knows no such appellation as 'administrator de son tort.'
65. We may now see the position under the India Succession Act. In Paruk's Indian succession act, seventh edition, defining 'Executor de son tort' it is stated thus :
'Definition of executor de son tort. - An executor de son tort is one who takes upon himself the office of an executor or intermeddles with the estate of the deceased without having been appointed an executor and without having obtained a grant from a competent court. He is not necessarily a wrong doer and his possession cannot always be regarded as wrongful at its inception. Shivaprasad Singh v. Prayagkumari Debee, : AIR1935Cal39 dissented from in Masireddi Suryanarayana v. Akula Anasuyamma, : AIR1963AP298 . The mere taking away of a portion of the property of the deceased when there is a legal representative present does not make that person an executor de son tort : Satya Ranjan Roy Choudhry v. Sarat Chandra Biswas AIR 1926 Cal 825. But a very sight circumstance of intermeddling will make him an executor de son tort : Prayag Kumari Debi (Rani) v. Siva Prosad Singh, : AIR1926Cal1 ; Navazbai v. Pestonji Ratanji ILR [1897] 21 Bom 400. The term is equally applicable in the case of an intestacy as there is no such term as an administrator de son trot : Khitish Chandra Acharjya Chowdhry v. Radhika Mohan Roy ILR [1908] Cal 276, Magaluri Garudiah v. Narayana Rungiah ILR [1881] Mad 359, Halsbury's Laws of England, 4th edition, volume 17, para 702. In order to constitute a person executor de son tort there must be no rightful executor or administrator. Therefore, if a person who is named in the will as executor acts before taking out probate, he is not an executor de son tort : Mr. Balak Bala Dassi v. Jadu Nath Das : AIR1931Cal45 .
Liability of executor de son tort. - A person can only be an executor de son tort as long as he intermeddles with the estate. The assumption of authority or an intention to exercise the functions of an executor or administrator will be regarded as executor de son tort and will render him liable : Chintaman Dhundiraj v. Sadguru Narayan Maharaj Datta Sansthan, : AIR1956Bom553 .'
66. In this case, therefore, as rightly held by the learned single judge, in the absence of any denial that the shares in question were transferred in order to pay off the pre-existing debts of the late Anantharamakrishnan or to pay off public dues such as estate duty or wealth-tax, it could never be surmised or much less inferred that the dealings of the third respondent as an administrator of the estate in his capacity as the eldest member of the family is illegal or deemed to prejudice other heirs or co-shares of the estate. We are in entire agreement with this finding of the learned single judge. even if is a case of a constructive trust, section 94 of the Indian Trusts act would come to the help of the third respondent. That section reads :
'In any case not coming within the scope of any of the preceding sections, where there is no trust, but the person having possession of property has not the whole beneficial interest therein, he must hold the property for the benefit of the persons having such interest, or the residue there of (as the case my be), to the extent necessary to satisfy their just demands,'
67. Article 21 of the company, on which reliance is placed by Mr. Vedantam Srinivasan, talks of transmission of shares. The said article is to the following effect :
'Any person becoming entitle to shares in consequence of the death or insolvency of any ember upon producing such evidence that he sustained the character in respect of which he proposes to act under this clause or of his title, as the board think sufficient, may with the consent of the Board (Which they shall not be under any obligation to give) be registered as a member in respect of such shares or may, subject to the regulations as to transfer herein contained, transfer such shares. this clause is herein after called the 'transmission clause'.'
68. In our considered view that has no application because this is a case of transfer by an administrator de son tort. In this connection we may note the transfer form :
SHARE TRANSFER FORM----------------------------------------------------------------------Transfer fromTransferor (s)(name (s) in full) Mr. S. Anantharamakrishnan(preferably typewritten orin block capitals)----------------------------------------------------------------------
69. But, this alone cannot be pressed into service without resort to what is obtainable below :
Signatures of transferor (s) (Sd.) K. Sivasailam (For the estate of the
late Sri
S. Anantharamakrishnan
for Associated Printers
(Madras) Private Ltd.)
Signature (s) of transference(s) (Sd.) ...............Director
70. It has come to be signed as transferor for the estate of the late Anantharamakrishnan. Therefore, as an administrator of the estate, he had signed the same. Only if it is a transfer of company shares, schedule I, Table 8 or articles 25 of the articles of association of the company would apply.
'25 (a) Shares in the company shall be transferred in the following form or in any usual or common form which the Board shall approve : 'I, A. B of ............................... in consideration of the sum of Rs..................paid to me by C.D. of ......................... (hereinafter called the transferee), do hereby transfer to the transferee the share or shares numbered........to ......inclusive in the under -taking called...............to hold unto the said transferee, his executors, administrators and assigns, subject to the several condition on which I held the same immediately before the execution hereof, and I, the transferee, do hereby agree to take the said share subject to the conditions aforesaid.'
As witness out hands this......day of.......19.......Witness to the signature of, etc.....
(b) A fee not exceeding one rupee may be charged upon any registration under the transmission clause hereinafter contained and also upon the registration of any transfer, and shall if required by the Board, be paid before registration.
(c) Every instrument of transfer shall be left at the office duly stamped for registration accompanied by the certificated of shares proposed be transferred and such other evidence as the board may require to prove the title of the transferor or his right to transfer the shares. The Board may waive the production of the certificate upon evidence satisfactory to them of its loss or destruction.
(d) All instruments of transfer which shall be registered shall be retained by the company, but any instrument of transfer which the board may decline to register shall (except in any case of fraud) be returned to the person depositing the same.
(e) (i) On the death of a member, the survivor or survivors where the member was a joint holder, and his legal representatives where he was a sole holder shall be the only person recognised but the company as having any title to his interest in the shares.
(ii) Nothing in the above clause shall release the estate of a deceased joint holder from any liability in respect of any share which had been jointly by him with other persons.'
71. But, as we have seen above, this is not a case of transmission.
72. We will now look at Shakuntala Rajpal v. Mckenzie (India) p. Ltd. where the headnote reads :
'The provisions of section 155 of Companies Act, 1956, are meant to provide speedy and inexpensive remedy to heirs and transferees of shares where the companies choose to adopt a recalcitrant attitude. It is true that the court has discretion to refuse to consider a matter if it raises complicated questions of fact but that does not mean that there is an automatic bar to the relief being given under section 156 simply because one of the parties chooses to raise a defence and call it a complicated one, while the judge finds that the matter is such that he could decided on the material on record without any difficulty. It cannot be said that the judge would be committing any irregularity or illegality if he decides a disputed question of fact on the basis of documentary evidence on record, finding that it was not necessary to have the matter tried as a suit separately.
The MP company was incorporated by S and his brother, K, in 1951 each holding 50 shares of the value of Rs. 100 pr share. At time, three brothers of S and were minors. As and when each of them attained majority, he was allotted shares. Their mother was also given shares and as a result, in the mid-sixties, S had 167 out of 1,000 shares. S was the chairman of the board of directors and K was the managing director. S died in 1968. The other brothers admitted that S's widow and her sons and daughters were entitled to the 167 shares but the shares were not transferred to them. Instead, formalities like production of estate duty clearance and succession certificate were insisted upon. It was then agreed that S's widow would become the shareholder in his place but the shares were not transferred to her. In the meantime, S's widow died and it was contended on behalf of the company that the sons and daughters of S were not entitled to have the shares transferred to then. S's mother had not claimed any share in S's estate but a controversy was raised after sixteen years that she was entitled to a share. Meanwhile, fresh shares had been issued and a group which could be termed the Aggarwal group had been inducted as shareholders as shareholders as a result of which the percentage of shareholding of the petitioners was reduced to less than 5% as against 167/1000 when S died. On a petition by the heirs of S for rectification of the share register and cancellation of the new shares :
Held, (i) that the controversy was a simple one and could be adjudicated upon under section 155;
(ii) that in the case of transmission of shares by operation of law, estate duty clearance certificate should not be insisted upon. Moreover, the status of the petitioners as children of S had not been disputed, and in the circumstances, the respondents should not have insisted upon asking for succession certificate or estate duty clearance. It had been mutually agreed that S's widow would become the shareholder in his place. The respondents could not take advantage of the agreement to obstruct the rights of the petitioners when S's widow had died. The respondents had not taken the stand at any stage in the proceedings that S's mother had a share in the estate of S. The facts showed that S's mother had never claimed such share. It should, therefore, be taken that she had relinquished her rights in S's estate. The petitioners were, therefore, entitled to the registration of the 167 shares of S in their names;
(iii) that till 1980, the company had been a closely knit family concern. It was in the nature of a partnership, and any alteration in the share structure naturally required the consent and/or approval of all. So also, the induction of new members. The petitioners were not allowed to have a say in all this as they were wrongfully kept excluded and were not treated as members. However, rights had risen in favour of the Aggarwal group as a result of the issue of fresh shares. In order to set matters right, the petitioners should be given the choice to subscribe to the shares in proportion to their shareholding at all stages when additional shares were allotted.'
73. But, this is not a case of transmission of shares, as we have pointed out above.
74. Palmer's Company Law, twenty-third edition, in paragraph 39-43, says as follows :
'Where a member of a company dies, his shares vest in his executors or administrators and the estate is liable for calls if the shares are not fully paid. The executors or administrators, in whom shares have so become vested, are entitled to be registered as the holders of the shares, in the absence of provisions in the articles to the contrary but the executors or administrators do not ipso facto become members of the company, nor is the company entitled, without their consent, to register them as members.'
75. We will now look at section 108 of the Companies Act. That lays down that a transfer is not be registered except on production of the instrument of transfer. It is only such a form came to be signed by the third respondent on behalf of the estate, as seen above.
76. Halsbury's Laws of England, fourth edition, volume 7, page 216 in para 396 states :
'An instrument of transfer must be executed; but otherwise there are no restrictions on transfer except such as are imposed by the articles.'
77. Concerning this, K. P. Antony v. Thandiyode Plantations P. Ltd. lays down as follows (headnote) :
'The order passed by the court under section 155 of the Companies Act, 1956, on a petition for rectification of the register of members of a company, is not based on any summary decision. From a reading of clauses (a) and (b) of section 155(3), section 2(1), and section 158, it is clear that it is not possible to file a separate suit in the ordinary civil court for obtaining relief of rectification of the register of members of a company. In case of resort to a civil court, the provisions in section 156 may even be defeated.
Where the petitioner has still to establish his titled to shares in the company, non-compliance with section 108 of the Companies Act, 1956, is not fatal to his petition under section 155. The question of compliance with the provisions of sections 108 will arise only if it is found that the petitioner has title to the shares in question ....'
78. On this basis it is argued that section 108 of the Companies Act is no bar. But, we would like to note the following passage in paragraph 50-14 of Palmer's Company Law, twenty-third edition :
'It is a corollary from the principle that the register of members is to be the creditors' guarantee, showing them to whom and to what they have to trust, that the register should be properly kept and that the names appearing therein should be the names of the persons really for the time being liable to the creditors. But, if there is an error in the register this cannot be rectified by the company without applying to the court. Accordingly, section 116 of the 1048 Act provides a summary mode of rectifying the register from time to time by application to the court in two classes of cases :
(1) Where the name of any person is without sufficient cause entered in or omitted from the register of members.
(2) Where default is made or unnecessary delay takes place in entering on the register the fact of any person having ceased to be a member.
This jurisdiction is exercisable after as well as before winding-up, and is frequently exercised. It may be invoked by the company, or by the person aggrieved (whether a member or not) or by any member. The following are a few illustrative cases in which orders have been made : where the applicant was induced to take shares by misrepresentation, where the company improperly neglected to register a transfer where shares had been issued to the applicant as paid up without filling a contract in compliance with what is now section 52 of the Act of 1948. Where shares were improperly forfeited; where the company, acting on a forged transfer, had removed the name of the applicant, the real owner; where there was a dispute between the vendor and purchaser of shares; where shares had been irregularly allotted to an applicant; where the signatory of an underwriting letter not constituting a contract had been placed on the register; where a shareholder, who had made an ultra vires surrender of his shares to the company, claimed to have his name reinstated.'
79. The Kerala decision reported in K. P. Antony v. Thandiyode Plantations P. Ltd. [1987] 62 Comp Cas 553 is distinguishable because here the transfer is effected at the request of the administrator de son tort and certainly the company cannot be expected to go into the questions of title, before registering the transfer. We have seen in the previous paragraph as to when rectification can be made.
80. In fine, we hold that this is a case in which the appellant is attacking the transfer of shares on the ground that the third respondent has no authority to do so, after having had the benefit of the administration of the estate. Whatever may be her other rights, with which we need not deal having regard to the scope of section 155, this is a case in which we are firmly convinced that the remedy under section 155 cannot be invoked.
81. In the result, we dismiss the appeals; however, there will be no order as to costs.