Transmission of shares on death cannot be refused under transfer articles and may be rectified in the members' register.

Transfer of shares under the Companies Act, 1956 is distinct from transmission by operation of law on a member's death, and the executor, as legal representative under the Indian Succession Act, is entitled to have the deceased's shares entered in the register unless the articles specifically bar such transmission. Articles dealing only with voluntary transfers between living persons cannot justify refusal of registration of transmitted shares. An improper refusal to register transmission amounts to a default or omission in maintaining the register, so rectification under section 155 is maintainable. The company's refusal was unlawful and the register had to be corrected.

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Issues: (i) Whether the executors of a deceased member were entitled to have their names entered in the register of members in respect of the deceased's shares, notwithstanding the company's articles; (ii) Whether an application under section 155 of the Companies Act, 1956 was maintainable against an illegal refusal to register transmission of shares.

Issue (i): Whether the executors of a deceased member were entitled to have their names entered in the register of members in respect of the deceased's shares, notwithstanding the company's articles.

Analysis: Sections 108 to 111 of the Companies Act, 1956 distinguish between transfer and transmission of shares. Transfer under section 108 is an inter vivos transfer between living persons, whereas transmission by operation of law covers devolution on death. Under section 211 of the Indian Succession Act, the executor is the legal representative for all purposes and the deceased's property vests in the executor. The articles relied on by the company dealt with voluntary transfer between living persons and did not provide a basis to refuse transmission on death. Article 7(h) recognized legal representatives as the persons having title to the deceased member's interest.

Conclusion: The executors were entitled to registration as members in respect of the deceased member's shares, and the refusal by the company was unlawful.

Issue (ii): Whether an application under section 155 of the Companies Act, 1956 was maintainable against an illegal refusal to register transmission of shares.

Analysis: Section 155(1)(b) permits rectification where default is made or unnecessary delay occurs in entering in the register the fact of a person having become or ceased to be a member. An improper refusal to register is within the scope of such default, because the provision is wide enough to cover omission or failure to perform the statutory duty of registration.

Conclusion: The application under section 155 was maintainable.

Final Conclusion: The refusal to register the executors was set aside and the company was directed to rectify its register of members accordingly.

Ratio Decidendi: A company cannot refuse transmission of shares devolving by operation of law on the death of a member unless its articles specifically confer such power, and an illegal refusal to register such transmission is amenable to rectification under section 155 of the Companies Act, 1956.

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