The main legal point established in the judgment is the binding nature of the Articles of Association, the limitations on challenging the validity of amendments, and the Court's discretion in entering a finding on the validity of amendments considering the potential impact on past transactions.

1. These are appeals under sub-section (4) of S.155 of the Companies Act, 1956 (the Act), directed against the decision by our learned brother M. P. Menon, J., in C. P. Nos. 8 to 30 of 1980, which were petitions under S.155 of the Act and R.9 of the Companies (Court) Rules, 1959 (the Rules), for rectification of the register of Members of the 1st respondent-Company (the Travancore Rubber and Tea Company Limited) by removing the name of the second respondent in the respective petitions from the Register of Members in respect of equity shares alleged to have been purchased by the respective petitioners from the 2nd respondent in the respective petitions at the prevailing market rate through the brokers and in respect of which, share transfer deeds duly executed by the transferors and the transferees, together with the share certificates relating to the said shares, were forwarded to the registered office of the Company for registering the transfers and duly entering the names of the respective petitioners in the Register of Members of the Company as the holders of those shares. It has been averred that the Company instead of registering the said transfer of shares and entering the names of the respective petitioners as the owners of the said shares, by its letter dated 29-1-1980 informed the respective petitioners that the transfer applications were considered by the Board of Directors of the Company at its meeting; and that the Board had declined to register the transfer of shares in exercise of the powers conferred on the Board under Art.24 of the Articles of Association of the first respondent Company read with S.111 of the Act; in consequence the 1st respondent Company returned the share certificates relating to the said shares to the petitioners.

2. Issue Nos.1 and 2 formulated for trial by the learned Judge (Issues 3 to 6 not being relevant for our present purpose) read as follows:

"(1) Are the petitioners competent to challenge the validity of Art.24 (as amended in 1965) of the first respondent-Company's Articles of Association in these proceedings? and

(2) If so, is Art.24 (as amended in 1965) invalid as alleged?"

3. The 1st respondent-Company was incorporated under the Travancore Companies Act, IX of 1114. Ext. Al contains the Articles of Association of the Company as it stood prior to 1965; and Regulation No. 20 thereof was in the following terms:

"20. The Directors may refuse to register any transfer of a partly paid share (a) where the Company has a lien on the share; or (b) where it is not proved to their satisfaction that the proposed transferee is a responsible person; or (c) where the Directors are of opinion that the proposed transferee (not being already a member) is not a desirable person to admit to membership, but the Directors shall not be bound to state their reason for refusing to register any transfer. Notice of refusal to transfer shall be given to both parties to the deed or application for transfer within two months after the decision of the Board of Directors is made."

4. M/s. Aspinwall & Company (Travancore) Ltd., were originally the Managing Agents of the Company; and it appears that some time prior to 1965 that arrangement was terminated. This change in regard to the managing agency and the far-reaching changes brought about in the Company Law by the Companies Act, 1956, made the Directors think that the Articles of Association, as a whole, had to be recast and replaced by a new set of Articles. Accordingly, they gave notice of the following Special Resolution for the 21st Annual General Meeting of the Company, held on 24-6-1965:

"Resolved that the Regulations contained in the printed document submitted to this Meeting and for purposes of identification signed by the Chairman of the Meeting, be and are hereby approved and that such Regulations be and are hereby adopted as the Articles of Association of the Company for and to the exclusion of all existing Articles."

The notice also stated:

"An E