Companies Act Section 59 — Rectification of register of members
CHAPTER IV SHARE CAPITAL AND DEBENTURES
Commercial / Corporate
Summary
Sub-section (1) allows a person whose name has been wrongly added to or removed from a company's register of members, or where there is a delay or failure in recording a change of membership, to appeal for correction of the register. The appeal can be made by the affected person, any member of the company, or the company itself, and it must be filed with the Tribunal, or with a competent court outside India that the Central Government has specified by notification for foreign members or debenture holders living outside India.
Sub-section (2) states that after hearing the parties to the appeal, the Tribunal may either dismiss the appeal or order the company to register the transfer or transmission of shares within ten days of receiving the order. Alternatively, the Tribunal may direct rectification of the records of the depository or the register, and in that case, it can also order the company to pay damages for any loss suffered by the aggrieved party.
Sub-section (3) clarifies that this section does not restrict a security holder's right to transfer their securities, and any person who acquires such securities is entitled to voting rights, unless those voting rights have been suspended by an order of the Tribunal.
Sub-section (4) provides that if a transfer of securities violates the Securities Contracts (Regulation) Act, 1956, the Securities and Exchange Board of India Act, 1992, this Act, or any other law in force, the Tribunal may, upon an application from the depository, company, depository participant, security holder, or the Securities and Exchange Board, direct a company or depository to correct the violation and rectify its register or records.
Official Text
(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 the 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 restrict 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 is 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, 1992 (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* * * * *.