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of <h1>Court Confirms Maintainability of Petition Under Companies Act</h1> The court overruled the respondents' objection, confirming the maintainability of the petition under section 155 of the Companies Act. The court asserted ... Powers of Court to rectify register of members Issues Involved:1. Jurisdiction of the court under section 155 of the Companies Act, 1956.2. Maintainability of the petition against non-directors and non-shareholders under section 155.3. Court's discretion to entertain a petition under section 155 involving disputed questions of fact.Detailed Analysis:1. Jurisdiction of the court under section 155 of the Companies Act, 1956:The primary issue was whether the court has jurisdiction to entertain a petition under section 155 of the Companies Act, 1956, when it involves complex and disputed questions of fact. The petitioners sought rectification of the register and reliefs under sections 397 and 398 of the Companies Act. The respondents argued that a composite petition for reliefs under section 155 and sections 397 and 398 would not lie because the relief under sections 397 and 398 is available only to a member whose membership is not in dispute. The court overruled this contention, admitting the petition for relief under section 155 and keeping the prayer for relief under sections 397 and 398 in abeyance until the relief under section 155 is determined.The court examined whether it should exercise jurisdiction under section 155, which is often described as summary jurisdiction, particularly when the petition involves serious allegations of fraud, forgery, undue influence, and conspiracy. The court noted that section 155 does not indicate that jurisdiction is limited to cases where relief can be granted in a summary manner. The language of sub-section (3) of section 155 explicitly allows the court to decide any question relating to the title of any person who is a party to the application, whether the question arises between members or alleged members, or between members or alleged members and the company.The court concluded that section 155 confers comprehensive jurisdiction, enabling the court to examine all questions, complex or otherwise, relating to the title to shares and other necessary or expedient questions in connection with the application for rectification.2. Maintainability of the petition against non-directors and non-shareholders under section 155:The court addressed whether a petition under section 155 is maintainable against persons who are neither directors nor shareholders. It was argued that the court should not entertain the petition if it involves disputed questions of fact, especially when the question of title to shares depends on disputed questions involving and touching the transfer of shares.The court observed that section 155 allows the court to decide any question relating to the title of any person who is a party to the application, whether the question arises between members or alleged members, or between members or alleged members on the one hand and the company on the other. This indicates that the court's jurisdiction is not limited to disputes between current members and the company but extends to any party involved in the application for rectification.The court further noted that there is no language in section 155 that excludes the decision of questions of title to shares that may arise in an application for rectification. The court has the power to decide any question which it is necessary or expedient to decide in connection with the application for rectification, thereby affirming the maintainability of the petition against non-directors and non-shareholders.3. Court's discretion to entertain a petition under section 155 involving disputed questions of fact:The court considered whether it should exercise discretion to entertain a petition under section 155 when it involves disputed questions of fact. The respondents contended that the court should not permit the petitioners to seek relief by invoking the summary remedy under section 155, especially when the question of title to shares involves allegations of fraud, forgery, undue influence, and conspiracy.The court emphasized that the jurisdiction conferred by section 155 is not of a summary nature and does not preclude a full and thorough inquiry into the title to shares. The court has the discretion to decide whether to entertain the petition or direct the parties to seek relief through a civil suit. However, the court noted that merely because complex and intricate questions of title are raised, the court should not decline jurisdiction under section 155.The court concluded that even complex and complicated questions of title can be appropriately examined in a petition for rectification made under section 155. The court's jurisdiction under section 155 is comprehensive and allows the court to examine all necessary questions to grant or refuse the main relief sought in the petition.Conclusion:The court overruled the preliminary objection raised by the respondents, affirming that the petition under section 155 is maintainable and that the court has the jurisdiction to entertain and decide the petition, including all complex and disputed questions of fact. The petition was set down for final hearing, with costs to be considered based on the outcome of the petition.
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