TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Company's Decision Upheld in Son's Succession Dispute</h1> <h3>VERMNRM Kasi Viswanathan Chettyar Versus Indo-Burma Petroleum Co., Ltd.</h3> The court dismissed the petition for rectification under Section 38 of the Companies Act, ruling in favor of the company's decision not to enter the ... Power of court to rectify register of members Issues:Rectification of register under Section 38 of the Companies Act regarding the entry of a deceased member's successor, interpretation of the company's articles of association on transmission of shares, requirement of succession certificate for entry in the register, and the legal implications of joint Hindu family property devolution.Analysis:The judgment deals with a civil miscellaneous application under Section 38 of the Companies Act regarding the rectification of the register of a company to replace the name of a deceased member with that of his son, the applicant. The deceased member was part of a joint Hindu family, and the shares in question were considered part of their undivided joint family property. The company, relying on its articles of association, particularly Articles 41 and 42, refused to enter the applicant's name without a succession certificate. These articles specify that only the executors or administrators of a deceased member are recognized as having title to the shares, and the company has discretion under Article 42 to consider other claimants. The court noted the company's stance of seeking clarity on the applicant's title and observed that the articles mirrored provisions in the Indian Companies Act related to transmission of shares.The judgment delves into the interpretation of Section 38 of the Companies Act, emphasizing that the company's adherence to its articles of association does not constitute acting without sufficient cause unless there is fraud involved. The court highlighted that the company's directors are bound by the articles, and their actions are considered valid if in accordance with the provisions. In this case, the court found that the company's refusal to recognize the applicant's claim without a succession certificate was justifiable under the articles. The court noted that while the situation might seem absurd, it lacked the authority to compel the company to deviate from its articles or introduce new provisions.Furthermore, the judgment addressed the argument presented by the applicant's counsel regarding the impossibility of obtaining letters of administration or a succession certificate in cases involving joint Hindu family property. The court refrained from deciding on this issue, stating that it was not necessary for the current case and expressed reluctance to make a determination that might be subject to future legal scrutiny. The court concluded that, despite potential complexities in obtaining legal documentation, the company was within its rights to adhere to its articles, and thus, the petition for rectification was dismissed. The company did not seek costs, and the judgment upheld the company's position based on the existing legal framework and contractual obligations outlined in its articles of association.
TaxTMI 
TaxTMI 
