Bachawat, J. - (1.)This is an appeal by the Vidyasagar Cotton Mills Ltd. from an order directing rectification of its share register. The subscribed capital of the company consists of 1158 cumulative preference shares and 70,277 ordinary shares. The company is managed by its managing agents Messrs. United Commercial Agents (Private) Limited. 11,825 fully paid up ordinary shares and 591 fully paid up cumulative shares of the company stood in the name of the Mohamad Bashir. Mohamad Basir died intestate on the 11th March, 1960 leaving behind him his widow Nazmunnessa Begum and other persons as his heirs. Nazmunnessa as administratrix to the estate of Mohamad Basir applied for rectification of the share register by placing her name there in place of Mohamad Basir. It appears that Nazmunnessa in her own right is the holder of 7,800 fully paid up ordinary shares and her son Mohamad Riaz is the holder of another 7,881 fully paid up ordinary shares. Mohamad Basir, Nazmunnessa and one Manzoor Ahmed were the directors of the managing agents company. Upon the death of Mohamad Basir, on or about the 14th March, 1960 Nazmunnessa was appointed the managing director of the managing agents company and Manzoor Ahmed as the nominee of the managing agents company became an ex officio director of the appellant company. On the 17th March, 1960 Nazmunnessa was co-opted as the director of the appellant company in place of Mohamad Basir. Nazmunnessa, Manzoor Ahmed and several other persons are at present the directors of the appellant company. On the 24th December, 1960 the Board of directors of the appellant company resolved to hold the annual general meeting on the 9th February, 1961. Nazmunnessa was a party to this resolution. The notices of the meeting issued by order of the board stated that amongst other persons Nazmunnesa offered herself for reappointment as a director, and that the share transfer book of the appellant company would be closed from the 26th January to the 9th February, 1961. On the 20th January, 1961 Nazmunnessa obtained a grant of the letters of administration to the estate of Mohamad Basir. On the same date her attorneys wrote to the appellant company requesting registration of the shares formerlyheld by Mohamad Basir in her name. The original sharescrips, the original letters of administration as also a separate notice signed by Nazmunnessa intimating her election to be registered as the holder of the shares were duly lodged with the appellant company. The letter dated the 20th January was received by the appellant company on the 21st January. The 21st, 22nd, 23rd and 26th January were holidays. It may be mentioned that in the letter dated the 20th January Nazmunnessa's attorneys stated that the shares held by Mohmad Basir were a substantial portion of the ordinary shares of the company having voting rights and that Nazmunnessa desired that her name should be recorded in the register of the company in time to enable her to vote at the next general meeting of the company to be held on the 9th February. Nazmunnessa as the managing director of the managing agent of the company purported to call a meeting of its board of directors on the 25th January to consider her application for rectification of the share register. There is some dispute as to what precisely happened at the meeting. The case of the appellant company is that the meeting had not been duly convened because Manzoor Ahmed and Altap Hossain two of the directors had not been given due notice of the meeting and also because the requirements of Article 45 of the Articles of Association of the company had not been complied with. In spite of this meeting the appellant was unable to obtain rectification of the share register. The share register remained closed from the 26th January up to the 9th February. The closure was not in accordance with law because the requisite notice under Section 154 (1) of the Companies Act, 1956 had not been given. On the 28th January the appellant company wrote to Nazmunnessa's attorneys stating that her application would be placed at the next meeting of the board of directors. The letter added that the share transfer book of the company had been closed from the 26th January up to the 9th February both days inclusive as the annual general meeting of the company was due to be held on the 9th February. It appears that the company had in the meantime received two letters one from Manzoor Ahmed dated the 29th December, 1950 and another from his advocate dated the 27th January, 1961 claming that Manzoor Ahmed was entitled to registration of his name in the register of members as a co-sharer of the shares standing in the name of Mohamad Basir. Nazmunnessa moved her application for rectification of the share register on the 30th January. It appears that she received the letter of the appellant company dated the 28th January after her application was filed in Court. On the 8th February, S. P. Mitra, J., passed an order restraining the company and its directors from holding the annual general meeting on the 9th February except for the purpose of adjourning the same and directing the company to hold a meeting of its board of directors on the 14th February for the purpose of considering the application of Nazmunnessa for rectification of the share register and taking a final decision thereon and giving liberty to the further affidavits. An appeal by the company from this order has been dismissed. Further affidavits were filed pursuant to the directions given in the order dated the 8th February. From those affidavits it appears that Manzoor Ahmed had applied on the 14th February for revocation of the grant of letters of administration of the estate of Mohamad Basir deceased to Nazmunnessa. On the 14th February a meeting of the board of directors was held pursuant to the order dated the 8th February. The meeting resolved that the application of Nazmunnessa be adjourned till the decision of the Court in respect of Manzoor Ahmed's application for revocation of the letters of administration. We are informed by learned counsel on both sides that Manzoor Ahmed's application for revocation of the grant of the letters of administration was dismissed on the 10th April, 1961. An application by Manzoor Ahmed for his addition as a party to the application of Nazmunnessa for rectification of the share register was dismissed by S.P. Mitra, J. on the 24th April, 1961. On the 28th September, 1961 the application of Nazmunnessa was allowed and the Court directed rectification of the share register by inserting her name as holder of the shares standing in the name of Mohamad Basir, deceased in his place and stead.
(2.)In view of Article 1 of the Articles of Association of the company and in view of Section 28 of the Indian Companies Act 1956 regulations 25 to 28 of Table A of Schedule I of the Act regulating the registration of the transmission of shares must be deemed to be the part of the Articles of the company, there being nothing in its articles to exclude or modify those regulations. Article 24 of the Articles of Association defined the powers of its board of directors in case of transfer of shares and reads thus. The Board may subject to the right of appeal conferred by Section 111 decline to register any transfer of shares upon which the company has a lien, and in the case of shares not fully paid up and may decline to recognise any instrument of transfer unless a free of Rs.2/- is paid to the Company in respect thereof and the instrument of transfer is accompanied by the certificate of the shares to which it relates and such evidence as the Board may reasonably require." Under Article 28, the company has a lien on all shares whether fully paid or not for the debts, liabilities and engagements of the members concerned.
(3.)The shares in dispute admittedly stood in the name of Mohamad Basir. In view of regulation 25 of Table A upon his death his legal representative is the only person who may be recognised by the company as having title to his interest in the shares. Nazmunnessa has obtained a grant of letters of administration to the estate of Mohamad Basir and by Section 211 of the Indian Succession Act she is his legal representative for all purposes and all his property vests in her as such. The legal representative of a decision member is the legal owner of the shares held by the deceased, but he does not become a member of the company until his name is put on its register of members. Subject to the powers of the company to decline registration of his name as a member, the legal representative of the deceased member is entitled as between him and the company to registration of his name as a member of the company in respect of the shares held by the deceased. Indeed, under regulation 25 of the Table A no other person can be recognised by the company as having any title to or interest in the shares. Nazmunnessa duly elected to be registered as the holder of the shares as required by regulation 26(1) of the Table A. Under regulation 26(2) of Table A the board of directors had in such a case the same right to decline or suspend registration as it would have if Mohamad Basir had transferred the shares before his death. In view of Article 24, the board could, therefore, decline to register the transmission of the shares in cases where the company had a lien on the shares and also where such evidence as they might reasonably require was not produced. Nazmunnessa lodged with the company the original grant of the letters of administration to the estate of Mohamad Basir. The board could not reasonably require production of any other evidence in proof of her representative title and in fact did not require any further evidence. At no stage of the proceedings in the Court below the company claimed that it had a lien on the shares of Mohamad Basir. There is no pretence of any such claim either in the correspondences or in the resolutions of the board of directors of the company or in the several affidavits filed on behalf of the company. As between the company and herself Nazmunnessa has established a clear legal right to be put on the register of members in place and instead of Mohamad Basir, deceased. It is true that Manzoor Ahmed made a claim for registration of his name as a co-sharer in respect of the self-same shares, but on the face of it that claim could not be entertained by the company. The case of Manzoor Ahmed is that the shares were purchased in the name of Mohamad Basir out of joint funds belonging to Mohamad Basir and Manzoor Ahmed's father. Such a claim does not appear to have been made by Manzoor Ahmed during the life time of Mohamad Basir. The claim, assuming it to be genuine, was that Mohammad Basir held one-half of the shares as a trustee for Manzoor Ahmed. If Manzoor Ahmed succeeds in establishing his claim in a Court of law, he will be entitled to obtain an order upon Nazmunnessa to convey and transfer one half of the shares to him. Mohamad Basir was the legal owner of the shares. Under Section 153 of the Indian Companies Act, 1956 no notice of any trust, express or implied or constructive, can be entered in the register of members. In view of regulation 25 of Table A only Nazmunnessa as the legal representative of Mohamad Basir can be recognised by the company having any title to or interest in the shares. It is not pretended that Manzoor Ahmed is his legal representative. In these circumstances Nazmunnessa has fully made out her title to the shares and her right to have her name entered as a member in the register of members.