Share transfer compliance controls register rectification where disputed title cannot replace statutory transfer requirements.

A company cannot alter the register of members on disputed claims of title alone when the statutory requirements for an inter vivos share transfer are not met. A valid transfer requires compliance with the prescribed transfer process, including a duly stamped and executed transfer instrument and delivery of share certificates, or a lawful transmission by operation of law. Private arrangements between parties and ex parte assertions of beneficial ownership do not justify omitting the registered holder's name from the register. On the stated facts, the omission was without sufficient cause and the register was liable to rectification in favour of the petitioner.

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Issues: Whether the company was justified in transferring the petitioner's shares to the second respondent and omitting the petitioner's name from the register of members without sufficient cause, so as to warrant rectification of the register under the Companies Act, 1956.

Analysis: A transfer inter vivos of shares requires compliance with the statutory scheme governing transfer, including a duly stamped and executed instrument of transfer and delivery of the share certificates. The company could not act on ex parte assertions of title or on private arrangements between the parties when no transfer form was submitted by the registered holder and no lawful transmission by operation of law was shown. The provision barring notice of trusts in the register also prevented the company from treating disputed beneficial claims as a substitute for the prescribed transfer process. On the facts, the company had no sufficient basis to alter the register in favour of the second respondent.

Conclusion: The company had omitted the petitioner's name from the register of members without sufficient cause, and the petitioner was entitled to rectification of the register and consequential reliefs.

Final Conclusion: The petition succeeded, and the register of members was directed to be corrected in favour of the petitioner with costs.

Ratio Decidendi: In a transfer of shares inter vivos, a company cannot alter the register of members merely on disputed claims of title; unless the statutory requirements for transfer are satisfied or a lawful transmission is shown, omission of the registered holder's name is without sufficient cause and the register is liable to rectification.

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