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of <h1>Court dismisses rectification application under Companies Act, stresses need for thorough examination of disputed facts.</h1> <h3>Surendra Kaur Versus Singh Engg. Works (P.) Ltd.</h3> Surendra Kaur Versus Singh Engg. Works (P.) Ltd. - [1977] 47 COMP. CAS. 638 (ALL.) Issues:1. Rectification of the register of a company under section 155 of the Companies Act, 1956 due to transmission of shares.2. Whether the application is maintainable considering complicated questions of title.Analysis:1. The judgment pertains to an application seeking rectification of the register of a company under section 155 of the Companies Act, 1956, for the transmission of shares held by a deceased individual to the applicants. The deceased, Sardar Gurcharan Singh, held 1,500 shares in the respondent-company, and upon his death, the company transferred the shares to a trust based on a will purportedly executed by the deceased. The applicants, widow, and children of the deceased, contested the validity of the will and claimed that the shares should be transmitted to them instead. The company maintained that the transmission to the trust was valid as per the will and that the applicants had not taken steps to challenge the will's validity through the court.2. The applicants alleged that the will was forged and sought rectification of the register to transfer the shares to them. However, the court held that the dispute over the will's validity raised complex factual issues that could not be resolved through affidavits. Citing the case of Mahendra Kumar Jain v. Federal Chemical Works Ltd., the court emphasized that when the petitioner's title to shares is seriously disputed, as in the present case, section 155 could not be applied, and the matter should be resolved in a civil court. The court found that the case involved multiple disputed facts regarding the will's authenticity, making it unsuitable for rectification under section 155.3. Additionally, the court rejected the application based on the principles outlined in Indian Chemical Products Ltd. v. State of Orissa, stating that the directors' decision to transfer the shares to the trust, instead of the applicants, was not capricious or in bad faith. The court also clarified that the scope of appellate power under section 111 of the Companies Act was co-extensive with the court's power under section 155, as highlighted in Harinagar Sugar Mills Ltd. v. Shyam Sunder Jhunjhunwala. Ultimately, the court ruled that due to the complicated questions of title and the unresolved issues surrounding the will's validity, the application for rectification was not maintainable, and the applicants were advised to seek resolution through appropriate legal channels.In conclusion, the court dismissed the application for rectification of the company's register under section 155 of the Companies Act, emphasizing the need for a comprehensive examination of the disputed facts regarding the will's authenticity and the transmission of shares to the trust. The judgment highlights the importance of addressing complex title disputes through the appropriate legal forums, such as civil courts, rather than seeking rectification under section 155 in cases involving contested factual issues.
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