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1959 Supreme(Bom) 5

IN THE HIGH COURT OF BOMBAY
Desai K.K. , J.
Appellants: Jayashree Shantaram Vankudre
Vs.
Respondent: Rajkamal Kalamandir Private Ltd
Decided On: 28.06.1955

The summary procedure under section 155 of the Companies Act is not appropriate for matters involving complicated questions such as forgery and fabrication of documents.

Headnote:

COMPANIES ACT - RECTIFICATION OF REGISTER - SECTION 155 - SUMMARY PROCEDURE - WHEN NOT ALLOWED.

Fact of the Case:

Petitioner and her husband floated a private limited company. Petitioner was registered as a shareholder in respect of 251 ordinary shares. Disputes arose between the petitioner and her husband. Petitioner filed a petition under section 155 of the Companies Act for rectification of the register of shares, alleging that the transfer of her shares to the respondent was forged and fabricated.

Finding of the Court:

The court held that the summary procedure prescribed under section 155 of the Companies Act is not appropriate for matters involving complicated questions such as forgery and fabrication of documents.

Issues: Whether the summary procedure under section 155 of the Companies Act is appropriate for matters involving complicated questions such as forgery and fabrication of documents.

Ratio Decidendi: The court held that the summary procedure under section 155 of the Companies Act is not appropriate for matters involving complicated questions such as forgery and fabrication of documents because: * Such matters require discovery and inspection. * They are more appropriately tried in a regular suit. * The remedy of a regular suit is available to the petitioner.

Final Decision: The petition was dismissed with liberty to the petitioner to file a regular suit.

JUDGMENT - 1. On December 31, I947, the petitioner and one Shantaram then being wife and husband floated respondent No. I company as a private limited company. The petitioner was registered as a shareholder in respect of 25I ordinary shares (of respondent no. I company) being the subject- matter of this petition. The petitioner and the said Shantaram both continued to act as and were directors of respondent No. I company on July I, I955.

2. From the deed of transfer dated June 28, I955, a copy whereof is annexed as exhibit 2 to the affidavit in reply made on behalf of respondednt No. I company, it appears that the petitioner had signed the deed of transfer in respect of these 25I ordinary shares of the company. In the register of shares of respondent No. I company as on July I, I955, these shares were transferred and registered in the name of respondent No.2 From the minutes of the meeting of the directors held on July I, I955, it appears that the petitioner and the said Shantaram were both present at the said meeting and the application for transfer of the shares from the name of the petitioner to respondent No. 2 was resolved to be accepted and the shares were resolved to be transferred to the name of respondent No.2.

3. I understand from counsel that there have been disputes and differences between the petitioner and the said Shantaram since July I, I955. This petition appears to be one of the litigations arising in consequence of such disputes. In paragraph 7 of the petition the petitioner has referred to a suit which she has filed against respondent No. I company and the said Shantaram. In the written-statement in that suit the minutes of the meeting of the directors held on July I, I955, were referred to and annexed. It is the petitioners case that she was never present at such meeting and that no such meeting of directors was held on July I,I955. The petitioners contention is that the minutes are fabricated for the purpose of depriving the petitioner of the shares in question and of her position as a director of respondent No. I company. The petitioner denies having at any time executed a deed of transfer of the kind which is annexed as exhibit 2 to the affidavit in reply made on behalf of respondent No. I company. The petitioner, however, does not deny the signature of the deed of transfer. The petitioners case is that the contents of the deed of transfer which bears her signature are forged and fabricated. In the affidavit in reply made on behalf of respondent no. I company all these allegations are denied.

4. Mr. Khambatta on behalf of respondent No. I company has contended that the procedure prescribed under section I55 of the Indian Companies Act is a summary remedy and should not be allowed to be resorted to in matters involving complicated questions such as have arisen in this petition. He contends that questions of forgery and fabrication of documents are not proper to be tried under the summary procedure of an application under section I55 of the Companies Act. He has in that connection referred me to various textbooks. In Volume VI of Halsburys Laws of England the summary of the purport of the English decisions in this connection appears in article 448. The relevant observations in that article are as follows (page 2I8) :

"The application may be made by the person aggrieved.......It may be by motion or summons or by action commenced by writ. If the court thinks that the case by reason of its complexity or on the ground that there are matters requiring investigation or otherwise, could more satisfactorily be dealt with by an action, the court will decline to make an order on a motion, without prejudice to the right of the applicant to institute an action for ratification. An action may, without any direction by the court, be instituted for rectification of the register, a course which should be followed where there is much complexity, or where other relief is required."

5. Mr. Khambatta and Mr. Mody both have r





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