Rectification of register of members u/s 59 of the Companies Act, 2013
Table of Contents
Section 59 of the Companies Act, 2013
- 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.
- 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.
- 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.
- 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.
Register of Members
Section 88 of the Companies Act requires every company shall keep and maintain the following registers. It includes records of members, debenture holders, other security instrument holders
The register of members of a company contains names, addresses, occupations, if any etc. only of members of the company.
Any person, whose name is entered in the register of members of a company, considered to be its member, although he may not own the shares which are shown in his name in the register of members.
On the contrary, a person, whose name is not entered in the register of members is not considered as member of the company even though he may have done everything to entitle him to be put on the register of members.
Prior Provisions of Companies Act
- Section 430 bars jurisdiction of civil courts for matters under NCLT’s scope
- S.38, Indian Companies Act 1913 – Courts had jurisdiction.
- S.155, Companies Act 1956 – High Courts have jurisdiction to order for rectify registers.
- S.111, 1956 Act (post-1988 Amendment) – Company Law Board (private companies).
- S.111A, 1956 Act (post-1996 Depositories Act) – CLB for public companies
NCLT Rules and SEBI Overlap
Rule 70(4) & (5), National Company Law Tribunal Rules, 2016
Tribunal can grant interim orders regarding injunctions, payment of dividend, allotment of bonus or rights shares, as it deems fit .On a petition u/s 59, it can also decide questions of title and incidental matters.
The concept of ‘summary jurisdiction’ was emphasised by the Supreme Court concerning Section 155 of the 1956 Act in Ammonia Supplies Corporation Pvt Ltd v Modern Plastic Containers Pvt Ltd, (1998) 94 Comp Cas 310.
NCLT cannot take over SEBI’s role. NCLT jurisdiction is summary; SEBI handles regulatory violations like takeover breaches, insider trading. IFB Agro Industries Ltd. v. SICGIL India Ltd., (2023) 4 SCC 209
Section 59 itself does not grant such wide powers, therefore the rules may be ultra vires. Overlaps SEBI jurisdiction as section 59(4) covers contraventions of SCRA 1956, SEBI Act 1992, SEBI Regulations.
Grounds for rectification u/s 59
Section 59 of the Companies Act, 2013 confers powers on the Tribunal or a competent court outside India specified by the Central Government by notification in respect of foreign members or debenture-holders residing outside India to order rectification of register of members of a company if an appeal is made by the aggrieved person or by any member of the company or the company on any of the following grounds:
- where the name of a person is without sufficient cause, entered in the register of members of a company;
- where his name, after having been entered in the register, is omitted without sufficient cause; or
- where default is made or unnecessary delay takes place in entering in the register of members the fact
- of any person having become, or ceased to be, a member of the company.
Case Laws
Ref. Anil Gupta v. Delhi Cloth & General Mills Co. Ltd., (1983) 54 Com Cases 301 (Delhi)
It is pertinent to note that though the time limit for filing an application for rectification of register of members has not been specified in the Act, the provisions of Article 137 of the Limitation Act would apply and in consequence, the application for rectification must be made within three years from the date on which the right occurs.
Bhupendra Patel v. Hotel Satyaketu Pvt. Ltd., 2017 SCC OnLine NCLT 10291 : MANU/NC/0832/2017 : NCLT - Ahmedabad
Where the petitioners failed to produce their share certificates, it could not be said that they had not transferred their shares in favour of respondents and thus, petitioners were not entitled to the relief for rectification of Register of Members of respondent company.
IFB Agro Industries Ltd. v. SICGIL India Ltd., (2023) 4 SCC 209
Acquisition increased shareholding beyond 5%, petition filed under S.111A (old law) for rectification. NCLT cannot declare acquisition void (that’s SEBI’s jurisdiction).
The NCLT allowed company petition for rectification of Members Register. The Tribunal directed the appellant company to buy-back its shares which were held by respondent company.
Reinforced S.59 as summary power under the provision, not for adjudicating takeover/insider trading violations.
Shashi Prakash Khemka v. NEPC Micon Ltd., 2019 SCC OnLine SC 223 : (2019) 212 Comp Cas 385 (SC)
“After Companies Act 2013, it is not in dispute that were to arise today, the civil suit remedy would be completely barred and the power would be vested with the NCLT under section 59 of the said Act.”
Held that as the civil suit remedy was completely barred and the power was vested with the Tribunal under Section 59, although the cause of action had arisen at a stage prior to the enactment of the Companies Act, 2013, relegating the parties to civil suit now would not be the appropriate remedy.
History
References
- The Companies Act, 2013 (Act 18 of 2023), § 58, 59, 430.
- The Companies Act, 1956.
- National Company Law Tribunal Rules, 2016
- K R Chandratre, Rectification of Register of Members of a Company: Supreme Court re-confirms Summary Jurisdiction of NCLT under Section 58/59 of Companies Act, 2013, CSJ (2023), https://www.icsi.edu/media/webmodules/CSJ/November/11.pdf, (last accessed Aug 25 2025).
- C.M. Bindal, Corporate Law - Rectification of Register of Members in a Public Company Manupatra Articles, https://articles.manupatra.com/article-details/Corporate-Law-Rectification-of-Register-of-Members-in-a-Public-Company (last accessed Aug 25, 2025).
- IFB Agro Industries Ltd. v. SICGIL India Ltd., (2023) 4 SCC 209
- Bhupendra Patel v. Hotel Satyaketu Pvt. Ltd., 2017 SCC OnLine NCLT 10291
- Ammonia Supplies Corporation Pvt Ltd v Modern Plastic Containers Pvt Ltd,
- (1998) 94 Comp Cas 310.
- Shashi Prakash Khemka v. NEPC Micon Ltd., 2019 SCC OnLine SC 223 : (2019) 212 Comp Cas 385 (SC).
- Ref. Anil Gupta v. Delhi Cloth & General Mills Co. Ltd., (1983) 54 Com Cases 301 (Delhi).
