Locus standi in oppression proceedings depends on continuing shareholding; statutory member records prevailed, and the petition failed.

In proceedings under sections 397 and 398 of the Companies Act, 1956, locus standi depends on the petitioner's continuing membership of the company. The Court accepted evidence of a signed share transfer form, resignation letter, board approval, and corresponding entries in the register of members and annual return, treating those statutory records as prima facie proof of transfer. As no rectification application was filed and the petitioner could not satisfactorily rebut the documents or explain the signatures, the transfer was held valid and the petitioner was found to have ceased to be a shareholder. The petition therefore failed at the threshold for want of locus standi.

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Issues: Whether the petitioner had locus standi to maintain the application under sections 397 and 398 of the Companies Act, 1956, in view of the alleged transfer of his shares and resignation from directorship.

Analysis: The petitioner's right to maintain the composite petition depended on his continuing status as a shareholder. The evidence accepted by the Court showed execution of the share transfer form and resignation letter, board approval of the transfer, and corresponding entries in the register of members and annual return. Under the statutory scheme, membership is judged by entry in the register of members, and the register and returns constitute prima facie evidence until rebutted. The petitioner did not file any rectification application and offered no satisfactory explanation as to how his signatures appeared on the transfer documents. The Court also found no material discrepancy sufficient to discredit the opposite parties' witnesses, and held that the transfer complied with the statutory requirements, including stamping and cancellation of adhesive stamps.

Conclusion: The petitioner had ceased to be a shareholder and therefore lacked locus standi to maintain the petition.

Final Conclusion: The application failed at the threshold because the petitioner was not shown to be a member of the company when the proceeding was instituted.

Ratio Decidendi: In proceedings under sections 397 and 398 of the Companies Act, 1956, locus standi depends on continuing membership of the company, and entries in the register of members supported by statutory records are prima facie conclusive unless effectively rebutted or rectified.

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