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59 Rectification of register of members.

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CHAPTER IV

Section 59 of Companies Act 2013

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, the Securities and Exchange Board of India Act, 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.

5.     If any default is made in complying with the order of the Tribunal under this section, the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees, or with both.

Short Notes:

  • This section came into force from September 12, 2013.
  • It seeks to provide that if the name of any person has been entered in or has been omitted from the register of members without sufficient cause, the member or person aggrieved may appeal to the Tribunal or to a competent court outside India in respect of foreign members or debenture holders.
  • The Tribunal may either dismiss the appeal or direct for rectification of register, transfer or transmission.
  • The Tribunal may also direct to pay damages to the aggrieved party.
  • The section also provides that this section shall not restrict the right of a holder of shares or debentures, to transfer such shares or debentures and any person acquiring such shares or debentures shall be entitled for voting rights unless suspended by the Tribunal.
  • The Tribunal may direct any company or depository to set right any contravention and rectify register.
  • The section further provides that if any default is made in complying with the order of the Tribunal, the company and every officer who is in default shall be punishable with fine and imprisonment.

 

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