Lt. Gen. (Retd.) MAHMUD AHMAD AKHTAR vs ALLIED DEVELOPERS (PVT — 2022 CLD 718 LAHORE-HIGH-COURT-LAHORE

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Lt. Gen. (Retd.) MAHMUD AHMAD AKHTAR VS ALLIED DEVELOPERS (PVT.) LTD. S. 152---Power of Court to rectify register---Scope---If the name of any person is fraudulently or without "sufficient cause" entered in or omitted from the Register of Members, the aggrieved person can apply to the Court for rectification of Register and the Court after enquiring into the matter may order rectification of Register if it is satisfied that the aggrieved person is entitled to such relief. Ss. 152 & 76--- Power of Court to rectify register---Transfer of shares and debentures--- Scope--- Petitioners invoked original jurisdiction of the High Court under S. 152 of the Companies Ordinance, 1984 for rectification of register of shareholders---Contention of petitioners was that their father at the time of his death was holding 1400 shares of the respondent company but when they approached Securities and Exchange Commission of Pakistan (SECP) for transfer of shares they fell in knowledge about illegal transfer of 1400 shares---Validity---Perusal of report filed by the SECP and the contents made by the petitioners clarified that the shares of the deceased were illegally and fraudulently transferred---Record was silent about the mode of transfer or instrument through which 1400 shares were transferred in accordance with S. 76 of the Companies Ordinance, 1984 requiring a duly stamped transfer deed executed by the deceased along with the original share stamps---No transfer deed or any original script of copies thereof was filed with the petition at any later stage---Requirement of S. 76 of the Companies Ordinance, 1984 was not complied with, which was mandatory in nature and in absence of such compliance no transfer of shares was effective---Petition was allowed. Ss. 152 & 7---Power of Court to rectify register---Jurisdiction of the Court---Scope---Literal study of S. 152 read with S. 7 of the Companies Ordinance, 1984 provides a right of an aggrieved person to make an application before the High Court for the purposes of rectification of register of members or register of debenture holders of a company in a case where name of a person is fraudulently or without sufficient cause was entered in or omitted from said registers---On such application, the High Court is also empowered to decide any question relating to the title of any person who is party to the application and generally may decide any question which is necessary or expedient to decide for rectification of the registers---Accordingly, the High Court has power to either refuse the application or order rectification of registers on payment of any damages to be paid by the company to the aggrieved person and make order as to the costs in its discretion. S. 152---Power of Court to rectify register--- Scope---By virtue of S. 152 of the Ordinance, the Court may decide any question relating to the title of any person who is a party to the application to have his name entered in or omitted from the register, whether the question arises between members or debenture-holders or alleged members or debenture-holders, or between members or alleged members, or debenture-holders or alleged debenture-holders, on the one hand and the company on the other hand; and generally may decide any question which it is necessary or expedient to decide for rectification of the register---Since S. 152 of the Ordinance has provided a special remedy to resolve disputes erupting between the Company and the members under the Ordinance, the High Court being the court of "original jurisdiction" under the Ordinance is empowered to entertain the application for correction/rectification of the register of members. S. 152---Power of Court to rectify register---Scope---Section 152 of the Ordinance empowers the Court to decide any question relating to "rectification" of the Register---Any question raised within the peripheral field of rectification, it is the High Court under S. 152 alone which has the exclusive jurisdiction---Plain reading of the word "rectification" itself connotes some error, which has crept in requiring correction---Error would only mean everything as required under the law has been done yet by some mistake the name is either omitted or wrongly recorded in register of the Company. Ss. 152 & 9---Power of Court to rectify register---Procedure of the Court---Scope---application shall be preferred before the High Court by the aggrieved person or any member of the Company for "rectification" of the register---Though S. 152 of the Ordinance gives wide power to the High Court to rectify the register of members, yet the jurisdiction of the High Court is summary in nature, as emerges in S. 9(3) of the Ordinance. S. 7---Jurisdiction of the Court---Scope---Jurisdiction exercised by the High Court under the Ordinance is original jurisdiction, in the sense that the petitions or applications under the various provisions of the Ordinance are entertain-able by the High Court as the Court of first instance. Preamble & S. 6---Procedure of the Court and appeal---Scope---Preamble of the Companies Act, 2017 protects the interests of shareholders, creditors, other stakeholders and general public and provides an alternate mechanism for expeditious resolution of corporate disputes---However, S. 6(11) of the Act clearly states that the company matters have to be decided within a period of 120 days and the Court concerned shall fix the date and S. 6(7) of the Act speaks about allocation of time for hearing the case.

Lt. Gen. (Retd.) MAHMUD AHMAD AKHTAR vs ALLIED DEVELOPERS (PVT — 2022 CLD 718 LAHORE-HIGH-COURT-LAHORE

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