Share transfer refusal and rectification remedies are independent; limitation under article 137 governs section 155 petitions.

Refusal to register a share transfer was held unsustainable where the board lacked competence to decline transfer in the stated circumstances, and rectification of the register was warranted. The remedies under sections 111 and 155 of the Companies Act, 1956 were treated as independent and alternative, so the availability of an appeal did not bar rectification proceedings. In the absence of a specific limitation period under section 155, article 137 of the Limitation Act, 1963 applied; petitions filed within three years were within time, and objections based on laches or limitation failed. The board resolution was set aside and the register was directed to be rectified.

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Issues: (i) whether the company board's refusal to register the transfer of shares was sustainable in law and whether rectification of the register was warranted; (ii) whether the availability of an appeal under section 111 barred a petition for rectification under section 155; (iii) whether the petitions were liable to be rejected on the ground of laches or limitation.

Issue (i): whether the company board's refusal to register the transfer of shares was sustainable in law and whether rectification of the register was warranted.

Analysis: The petitions were filed under section 155 of the Companies Act, 1956 for rectification of the register of members after the board refused the transfer applications. The Court noted that in an identical situation involving the same respondent-company, refusal to transfer shares had already been held to be beyond the competence of the board of directors. On that footing, the impugned refusal could not be sustained.

Conclusion: The refusal to register the transfer of shares was unsustainable and rectification of the register was warranted in favour of the petitioners.

Issue (ii): whether the availability of an appeal under section 111 barred a petition for rectification under section 155.

Analysis: The Court treated the remedies under sections 111 and 155 of the Companies Act, 1956 as independent and alternative. The existence of one remedy did not exclude the other, and the failure to pursue the appellate remedy did not by itself render the rectification petitions non-maintainable.

Conclusion: The objection based on alternative remedy was rejected.

Issue (iii): whether the petitions were liable to be rejected on the ground of laches or limitation.

Analysis: The Court held that the Companies Act, 1956 did not prescribe a specific limitation period for applications under section 155. It applied the residuary period under article 137 of the Limitation Act, 1963 to such applications and held that the petitions, filed within three years, were in time. The delay therefore did not defeat the petitions.

Conclusion: The objection based on laches and limitation was rejected.

Final Conclusion: The board resolution refusing transfer was set aside, the register of members was directed to be rectified by entering the petitioners' names, and costs were awarded to the petitioners.

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