Rectification of share register remains available where title vests by law and transfer-deed formalities cannot defeat registration

Rectification of the register of members remained available notwithstanding an earlier remedy under section 111(3), because the jurisdiction under section 155 was treated as independent and the earlier proceeding did not bar statutory rectification. Where shares vested by operation of law, section 108(1) formalities for voluntary transfers did not apply, and the company could not insist on a stamped transfer instrument or import the lost-deed requirement into the proviso governing transmission by law. The refusal to register on that basis was unjustified, and the register was directed to be corrected in favour of the shareholder, with costs for the delay.

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Issues: (i) Whether a petition for rectification of the register of members was maintainable under section 155 of the Companies Act, 1956 despite the availability or earlier invocation of the remedy under section 111(3) of that Act; (ii) Whether the company could insist on compliance with the formal requirements of section 108(1) of the Companies Act, 1956 when the petitioner's title to the shares had vested by operation of law.

Issue (i): Whether a petition for rectification of the register of members was maintainable under section 155 of the Companies Act, 1956 despite the availability or earlier invocation of the remedy under section 111(3) of that Act.

Analysis: The jurisdiction under section 155 was treated as independent of the remedy under section 111. The prior filing of an appeal under section 111 did not bar recourse to rectification proceedings where the company continued to refuse registration. The earlier proceeding had not resulted in a binding registration and its abandonment did not deprive the petitioner of the statutory remedy to secure entry of its name in the register.

Conclusion: The petition under section 155 was maintainable, and the objection based on section 111(3) failed.

Issue (ii): Whether the company could insist on compliance with the formal requirements of section 108(1) of the Companies Act, 1956 when the petitioner's title to the shares had vested by operation of law.

Analysis: Section 108(1) was held to govern transfers by act of parties requiring an instrument of transfer, while its first proviso dealt with a lost transfer deed. The second proviso preserved the company's power to register a person whose title had been transmitted by operation of law. Since the petitioner's title arose by statutory vesting under section 7 of the Life Insurance Corporation Act, 1956, the company could not insist on a stamped instrument of transfer or on importing the stamp requirement of the first proviso into the second proviso. The refusal to register on that ground was therefore unjustified.

Conclusion: The company could not insist on transfer-deed formalities under section 108(1), and registration had to be effected in favour of the petitioner.

Final Conclusion: The register of members was directed to be rectified in favour of the petitioner, and costs were awarded against the company for the unjustified delay in recognising the petitioner's statutory title.

Ratio Decidendi: Where title to shares vests by operation of law, the company's power to register the transferee under the relevant proviso cannot be defeated by insisting on the formalities applicable to voluntary transfers or to a lost instrument of transfer, and rectification under the Companies Act remains available despite the existence of the appellate remedy concerning refusal of registration.

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