Equitable rectification of share registers may be refused where allotments were accepted, fully paid, and later challenged by a participating applicant.

Rectification of a company's register is a discretionary equitable remedy under Section 155 of the Companies Act, 1956, and will not be granted merely because allotments are alleged to exceed authority or involve minors. The court treated long-standing allotments, full payment by allottees, and the company's own acceptance of the position as factors against disturbing the register. It further noted that a minor is not barred, on that ground alone, from being a transferee or holder of fully paid-up shares, and that the doctrine of indoor management protects persons dealing in good faith. The petition was also rejected on equitable grounds because the applicant had participated in the allotments and later sought to upset an established state of affairs.

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Issues: (i) whether the register of members was liable to be rectified by removing the names of the allottees in respect of the impugned share allotments, including allotments said to have been made in excess of the authorised limit and to minors; (ii) whether the petition should be declined on equitable grounds because the petitioner was a consenting participant in the allotments and the application was mala fide.

Issue (i): whether the register of members was liable to be rectified by removing the names of the allottees in respect of the impugned share allotments, including allotments said to have been made in excess of the authorised limit and to minors.

Analysis: Section 155 of the Companies Act, 1956 confers a wide power of rectification, but the power is discretionary and is to be exercised on equitable considerations. The allotments complained of were made long before the petition, the allottees had paid full value, and the company itself was not seeking to upset the existing position. The Court also held that a minor was not, on that ground alone, barred from being a transferee or holder of fully paid-up shares. The doctrine of indoor management supported the position of persons dealing with the company in good faith, because outsiders are entitled to assume that internal corporate formalities have been duly performed.

Conclusion: The alleged irregularities did not compel rectification, and the names of the allottees were not ordered to be removed from the register.

Issue (ii): whether the petition should be declined on equitable grounds because the petitioner was a consenting participant in the allotments and the application was mala fide.

Analysis: The petitioner had presided over or attended the meetings at which the allotments were made and raised no objection at the relevant time. The Court treated this conduct as acquiescence and held that a party who was involved in the impugned transactions could not later seek to disturb an established state of affairs, particularly where no prejudice to the company or the shareholders was shown and the application appeared aimed at reversing an unfavourable shift in control.

Conclusion: The petition was rightly refused on equitable grounds as mala fide and unsupported by any enforceable equity.

Final Conclusion: Rectification of the register was declined, and the existing shareholding position was left undisturbed.

Ratio Decidendi: Rectification of a company's register is a discretionary equitable remedy, and it will be refused where the applicant was party to the impugned allotments, no prejudice is shown, and the transactions were accepted by the company and the allottees in good faith under the doctrine of indoor management.

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