Rectification of debenture register allowed where a proved transfer must be reflected despite winding up

The Companies Act was construed to permit rectification of the register of debenture holders where the statutory scheme requires the register to reflect the true holder of transferable debentures; that power was not displaced by a winding up order. The court held that the absence of a specific pre-1960 provision did not exclude rectification where the provisions on transfer and register maintenance read together supported correction of the record. On the facts, the transfer of 50 debentures was proved by admissions, witness evidence, and documents, and the surrounding circumstances did not render it colourable. The appellant was therefore entitled to be entered in the register.

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Issues: (i) whether an application for rectification of the register of debenture holders was maintainable under the Companies Act, including after a winding up order; and (ii) whether the transfer of 50 debentures in favour of the appellant was proved and genuine.

Issue (i): whether an application for rectification of the register of debenture holders was maintainable under the Companies Act, including after a winding up order

Analysis: The statutory scheme required a register of mortgages to be maintained and the words used in section 123 contemplated not merely the original mortgagee but also persons entitled by transfer. The provisions dealing with transfer and rectification were construed together to advance the object of the Act. The absence of a specific pre-1960 provision for debenture-holder rectification did not exclude the court's power where the register of mortgages had to reflect the true position. The pendency of winding up did not suspend these statutory duties, and the company had no independent right to refuse a registration required by law.

Conclusion: The application for rectification was competent and maintainable, including in winding up.

Issue (ii): whether the transfer of 50 debentures in favour of the appellant was proved and genuine

Analysis: The transferor's admission, the testimony of the appellant's witness, and the surrounding documentary materials established the transfer. The circumstances treated as suspicious were explained: transfer before formal allotment was not legally impossible where allotment was certain, inclusion of the debentures in the transferor's return was consistent with the register remaining uncorrected, and payment in cash did not by itself negative the transaction. The material on record did not justify treating the transaction as colourable.

Conclusion: The transfer was proved and genuine.

Final Conclusion: The order refusing rectification could not stand, and the appellant was entitled to have its name entered in the register in respect of the 50 debentures.

Ratio Decidendi: Where the statutory scheme requires a register to reflect the true holder of transferable debentures, the court may order rectification to record a proved transfer, and such relief is not defeated merely because the company is in liquidation.

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