Rectification of register of members
📚 Law Minded summary
The register of members decides who legally owns shares, so this section provides the way to correct it when it is wrong.
Anyone whose name has been entered without good reason, or wrongly left out or removed, can apply to the Tribunal. It can order the register rectified and damages paid.
Where shares were transferred or transmitted in breach of the law, the Tribunal can direct the company to set the transfer aside.
(1) If the name of any person is, without sufficient cause, entered in the register of members of a company, or after having been entered in th e register, is, without sufficient cause, omitted there from, or if a default is made, or unnecessary delay takes place in entering in the register, the fact of any person having become or ceased to be a member, the person aggrieved, or any member of the company, or the company may appeal in such form as may be prescribed, to the Tribunal, or to a competent court outside India, specified by the Central Government by notification, in respect of foreign members or debenture holders residing outside India, for rectification of the register.
(2) The Tribunal may, after hearing the parties to the appeal under sub -section (1) by order, either dismiss the appeal or direct that the transfer or transmission shall be registered by the company within a period of ten days of the receipt of the order or direct rectification of the records of the depository or the register and in the latter case, direct the company to pay damages, if any, sustained by the party aggrieved.
(3) The provisions of this section shall not restri ct the right of a holder of securities, to transfer such securities and any person acquiring such securities shall be entitled to voting rights unless the voting rights have been suspended by an order of the Tribunal.
(4) Where the transfer of securities i s in contravention of any of the provisions of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Securities and Exchange Board of India Act, 1 (15 of 1992) or this Act or any other law for the time being in force, the Tribunal may , on an application made by the depository, company, depository participant, the holder of the securities or the Securities and Exchange Board, direct any company or a depository to set right the contravention and rectify its register or records concerned. 1* * * * *.