Rectification of Company Register: Kerala HC rules on share entitlement, transmission formalities

The High Court of Kerala, in an internal appeal, addressed issues related to rectifying the register of members of a company under section 155 of the Companies Act, 1956. The case involved the entitlement to shares bequeathed under a will, compliance with formalities for share transmission, a scheme of arrangement involving foreign and Indian companies, and the definition of "business liabilities" in shareholding. The court ruled in favor of the petitioners, emphasizing compliance with share transfer formalities and recognizing their entitlement as legatees of Thampuran to have their names entered in the company's share register.

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Issues:
1. Interpretation of section 155 of the Companies Act, 1956 in rectifying the register of members of a company.
2. Determination of entitlement to shares under a will and compliance with formalities for transmission of shares.
3. Analysis of a scheme of arrangement and amalgamation involving foreign and Indian companies.
4. Definition of "business liabilities" in the context of shareholding in a company.
5. Consideration of legal entitlement to have names entered in the share register of the company.

The High Court of Kerala, in an internal appeal, dealt with rectifying the register of members of a company under section 155 of the Companies Act, 1956. The case involved the entitlement to shares bequeathed under a will by Rama Varma Thampuran. The court noted the absence of disputes regarding the devolution by bequest. The judge observed the possibility of shares being transmitted to the legatees and emphasized the need for compliance with formalities for the actual transfer of shares. The court analyzed a scheme for the acquisition of assets by an Indian company from a foreign company, highlighting the requirement for Indian residents to hold a specific percentage of the share capital. The court discussed the amalgamation of companies and the transfer of business liabilities. The judgment emphasized the importance of understanding the purpose and context of the scheme and arrangement. The court concluded that the petitioners were entitled to have their names entered in the share register of the company as legatees of Thampuran. The appeal was successful, and the court issued the order accordingly.

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