Court affirms shareholder rights to register access under Companies Act, failure to provide info is offense. The court held that the list of registered shareholders is part of the 'register of members' required under the Companies Act. As shareholders are ...
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Court affirms shareholder rights to register access under Companies Act, failure to provide info is offense.
The court held that the list of registered shareholders is part of the "register of members" required under the Companies Act. As shareholders are entitled to request a copy by paying fees, failure to provide such information constitutes an offense. The court emphasized the statutory obligation to maintain accurate shareholder records and dismissed the petition seeking to quash proceedings under section 163(5) of the Companies Act.
Issues: Interpretation of section 163(5) of the Companies Act, 1956 regarding the obligation to provide information to shareholders.
Analysis: The petition sought to quash proceedings under section 163(5) of the Companies Act, 1956, initiated by the first respondent, a shareholder of the petitioner-company, for not receiving a copy of the list of registered shareholders. The first respondent alleged that the petitioners deliberately avoided providing the information, constituting an offense under section 163(5). The petitioners contended that as the list of registered shareholders is not open to inspection under section 163(1), proceedings under section 163(5) are not sustainable. On the other hand, the first respondent argued that the "register of members" mentioned in section 163(1) includes the list of registered shareholders, entitling shareholders to request a copy by paying the necessary fees.
The court referred to relevant sections of the Companies Act, emphasizing that every shareholder is a member of the company as per section 41(3), and a company must maintain a "register of members" containing necessary details as per sections 150 and 151. The court highlighted that shareholders' names must be available in the "register of members." Section 163(1) allows members to inspect registers without a fee and request copies by paying prescribed fees, with a mandate to furnish copies within ten days of the request as per section 163(4).
The court concluded that since the names of shareholders must be in the "register of members" as per statutory requirements, the contention that the list of registered shareholders is not a register to be maintained under section 163(1) was not accepted. Consequently, the court found no grounds to quash the complaint, leading to the dismissal of the petition.
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