1. This is application filed under S.155 of the Companies Act. S.155 of the Companies Act gives power to this Court to rectify the register of members. S.150 mandates that every company shall maintain a register of its members. S.150 provides that,

"(1) Every company shall keep in one or more books a register of its members, and enter therein the following particulars :-

(a) the name and address, and the occupation, if any, of each member;

(b) in the case of a company having a share capital, the shares held by each member, distinguishing each share by its number, and the amount paid or agreed to be considered as paid on those shares;

(c) the date at which each person was entered in the register as a member; and

(d) the date at which any person ceased to be a member: Provided that where the company has converted any of its shares into stock and given notice of the conversion to the Registrar, the Register shall show the amount of stock held by each of the members concerned instead of the shares so converted which were previously held by him.

(2) If default is made in complying with sub-section (1), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to fifty rupees for every day during which default continues."

Section 109 of the Companies Act provides that,

A transfer of the share or other interest in a company of a deceased member thereof made by his legal representative shall, although the legal representative is not himself a member, be as valid as if he had been a member at the time of the execution of the instrument of transfer."

In this case, the petitioner and the 2nd respondent claim that they are the legal heirs of Ramavarma Valiakoil Thampuran. Thampuran has left a Will, which is an Annexure to the petition, marked Ext. A-5, and by virtue of this Will, the shares held by Thampuran in the Malayalam Plantations (Holdings) Limited (UK) have been bequeathed to the petitioner and the 2nd respondent. It is also provided in the Will that they are entitled to the shares in the ratio of 2:1.

2. Thampuran had 3750 shares in the Malayalam Plantations (holdings) Limited (UK). We are now concerned only with regard to these shares held by the said Thampuran. Thampuran died on 29th December 1975. There is no dispute that the said shares have to be devolved as a bequest by virtue of the Will to the petitioner and the 2nd respondent.

3. The case of the petitioner is that she is entitled to an order from this court under S.155 of the Companies Act to rectify the share register of the 1st respondent, Messrs. Harrisons Malayalam Ltd.

4. Now, I shall advert to the case of the petitioner as to how Messrs. Harrisons Malayalam Ltd. came into existence and how the petitioner is entitled to claim the right to become a shareholder of the said company when Thampuran had shares only in the Malayalam Plantations (Holdings) Limited (UK). Messrs Harrisons and Crosfield (UK) Limited were acting as Agents and Secretaries of the Malayalam Plantations (Holdings) Limited (UK). By Annexure A-3, it is seen that exercising the power under S.209(1) of the Companies Act (English Act), 1948, Messrs. Harrisons and Crosfield (UK) Limited had acquired the shares held by Thampuran in the Malayalam Plantations (Holdings) Limited (UK), and that the said company, Malayalam Plantations (Holdings) Limited (UK)., have received on behalf of the shareholder, Thampuran, as purchase consideration, shares of Harrisons and Crosfield (UK) Limited. Further, it is seen stated that Thampuran had 340 ordinary shares of 1 each in the Harrisons and Crosfield (UK) Limited and cash representing proceeds of sale of fractious, 3. It is clear from Annexure A-3 that the legal heirs of Thampuran, viz., Setu Lakshmi Bayi, the wife, the petitioner and the 2nd respondent, have got entitlement to the above said shares. In the same Annexure it is further stated that they are prepared to arrange for the transfer of Harrisons and Crosfield (UK) Limited ordinary shares held in trust for them on receipt of the Malayalam Plantations (Holdings) Limited (UK.) share certificates. The letter concludes by saying that " a certificate for such ordinary shares Will then be issued to you, and if applicable, a cheque in respect of the proceeds of the sale of any fractions due to you". Ia response to this Annexure A-3, the petitioner had replied to the Malayalam Plantations (Holdings) Limited (UK) by Annexure A-4 and said that the certificates which required to be submitted as stated in Annexure A-3 were as stated in Annexure A-3 were with the Malayalam Plantations (Holdings) Limited (UK) and so, certificates of shares of Messrs. Harrisons and Crosfield (UK) Limited may be sent to the petitioner without delay.

5. In the petition it is not stated that pursuant to this letter they have received the shares of Messrs. Harrisons and Crosfield (UK) Limited. From the records available in this case, it is difficult for this Court to proceed on the basis that the petitioner and the 2nd respondent have obtained the share certificates of Messrs. Harrisons and Crosfield (UK) Limited and thus the petitioners have become members or shareholders of Messrs. Harrisons and Crosfield (UK) Limited, In this respect, I have to refer to Annexure A-2 which is Ext. A-3. In this Annexure, Messrs. Harrisons and Crosfield (UK) Limited have indicated that they have received the Malayalam Plantations (Holdings) Limited (UK) share certificates for 3750 shares, but they said that they wanted the completed indemnity and letter of request also. The letter of request referred to in Ext. A-3 should be the letter of request from Malayalam Plantations (Holdings) Limited (UK) for the transfer of shares since at that time those shares were held in trust by the Malayalam Plantations (Holdings) Limited (UK). I am not in a position to say with certainty from the records available in the case that there was a transmission of the shares held by Valiakoil Thampuran in Malayalam Plantations (Holdings) Limited (UK; in favour of the petitioner and the 2nd respondent. Of course, the possibility is that those shares have been converted into shares of Messrs. Harrisons and Crosfield (UK) Limited and so, those shares might have been transmitted to the legatees under the Will of Thampuran, namely, the petitioner and the 2nd respondent. Anyhow, from the records available in the case, I feel that the petitioner and the 2nd respondent have got entitlement for 340 ordinary shares of 1 each in Messrs. Harrisons and Crosfield (UK) Limited. Ofcourse, the petitioner and the 2nd respondent have to comply with the formalities required for the actual transmission/transfer of shares. "Whether the petitioner and the 2nd respondent have complied with the formalities required for actual transmission/transfer of shares cannot be said with certainty. I am bound to consider what it is that constitutes membership in a company. This is a point of first importance in the law of Companies and it can be answered only with reference to the relevant provisions of the Companies Act.

6. Section 41 of Companies Act, gives the definition of member. It includes the subscribers of the memorandum of a company and every other person who agrees in writing to become a member of a company and whose name is entered in its register of members. In the case of members other than subscribers to the memorandum two essential conditions have to be satisfied to constitute a person a member. (1) An agreement in writing to become a member and (2) an entry on the register. These two conditions are cumulative. Both these conditions have to be satisfied and if both these conditions are not satisfied the person in question cannot claim the status of member! The position in English Act is also almost idealical.

7. Messrs. Harrisons and Crosfield (UK) Limited had large assets and liabilities in India. Since a foreign company was holding large assets in India, as a policy measure, a scheme was evolved for the purpose of acquiring the assets of Messrs. Harrisons and Crosfield (UK) Limited by an Indian Company and for that purpose Messrs. Harrisons and Crosfield (India) Limited was formed and the assets and the business liabilities of Messrs. Harrisons and Crosfield (UK) Limited in India Were taken over by Messrs. Harrisons and Crosfield (India) Limited and this was done after satisfying the provisions of the Indian Companies Act by filing C. P. 24 of 1979 and obtaining an order from this Court. Copy of the order passed by this Court with a scheme of arrangement and amalgamation has been produced and marked as Ext. R-1. As per the scheme it is clear that in Messrs. Harrisons and Crosfield (India) Limited 60 per cent of the issued share capital should be held by the Indian residents and the remaining 40 per cent of the issued share capital by Messrs. Harrisons and Crosfield (UK) Limited. This 40 per cent of the issued share capital was given on the basis of the valuation of the assets and liabilities of Messrs. Harrisons and Crosfield (UK) Limited in India. This I say since in the scheme it is made clear thus:

"Within six months after the operative date, the Indian Company will issue shares for cash to Indian residents at par to ensure that 60 per cent of the issued capital is held by the Indian residents. In issuing and allotting shares to the Transferor Company, the Indian Company will see that the equity participation of the Transferor Company in the Indian Company shall not exceed 40 per cent of the issued capital and the balance 60 per cent will be issued and allotted to persons resident in India. At no time after the lapse of six months from the operative date the non resident interest in the equity capital of the Indian Company shall exceed 40 per cent."

Subsequent to the incorporation of Messrs. Harrisons and Crosfield (India) Limited, by an order of this Court in C. P. 13 of 1983, a scheme of arrangement and amalgamation was passed whereby Messrs. Harrisons and Crosfield (India) Limited was amalgamated with Malayalam Plantations (India) Limited and by that amalgamation, Messrs. Harrisons and Crosfield (India) Limited ceased to exist and the name "Malayalam Plantations (India) Limited" has been changed to Messrs Harrisons Malayalam Limited, the 1st respondent in this petition.

8. The question that has to be considered in this case is whether from the aforsaid facts and circumstances, the petitioners claim for rectification of, the share register of Messrs. Harrisons Malayalam Limited can be allowed or not. The counsel for the petitioner submitted that all assets and liabilities of Messrs. Harrisons and Crosfield (UK) Limited in India have now virtually vested with Messrs. Harrisons Malayalam Limited and so, he submits that since the petitioner and the 2nd respondent had some shares in Messrs. Harrisons and Crosfield (UK) Limited by virtue of transmission in their favour of the shares of their father in Malayalam Plantations (Holdings) Limited (UK), the share register of the 1st respondent has to be rectified declaring that the petitioner and the 2nd respondent are holding shares in the 1st respondent company. Of course, it is true that all the business liabilities in India of Messrs. Harrisons and Crosfield (UK) Limited have been, as I said earlier, now taken over by Messrs. Harrisons Malayalam Limited.

9. The chief question that I have to answer is whether if the petitioner and the 2nd respondent have not the shares of Malayalam Plantations (Holding) Limited (UK) transferred to them as the shares of Messrs. Harrisons and Crosfield (UK) Limited, can those shares be treated as the shares of the 1st respondent company. Counsel for the petitioner submitted that it can be done so since all the liabilities of Messrs Harrisons and Crosfield (UK) Limited have been taken over by Messrs. Harrisons Malayalam Limited in respect of Indian business. The question is whether that provision is comprehensive enough to say that the shares held by Indian residents in Messrs. Harrisons and Crosfield (UK) Limited also have been taken as liabilities of Messrs. Harrisons and Crosfield (India) Limited for the first instance and then by Messrs. Harrisons Malayalam Limited. I find it difficult to accept the contention of the counsel for the petitioner. Assuming that the petitioner succeeds in establishing that the shares held by her father in Malayalam Plantations (Holdings). Limited (UK) have been converted into shares of Messrs. Harrisons and Crosfield (UK) Limited and those shares have been transmitted to the petitioner, and the 2nd respondent even in that case, it is difficult to say that the shares held by the petitioner in Messrs. Harrisons and Crosfield (UK) Limited have to be treated as the shares of Messrs. Harrisons Malayalam Limited as one of the business liabilities of Messrs. Harrisons and Crosfield (UK) Limited in India. The Shares held by Indian citizens in Messrs. Harrisons and Crosfield (UK) Limited may perhaps constitute a liability of that company. But, it can never be said that it is a business liability. What is the true position of a shareholder in a company If the company earns profits and declares dividend, certainly, the shareholder is entitled to participate in it and get his share of dividend. In the event of winding up, his right is to participate in the distribution of companys assets in accordance with the rights given to him under the articles. He acquires no other interest in the assets of the company. See Bacha F. Guzdar v. Commr. of I. T., Bombay AIR 1955 Cal. 74. "A share in a company cannot properly be likened to a sum of money settled upon and subject to executory limitations to arise in the future; it is rather to be regarded as the interest of the shareholder in the company, ensured, for the purposes of liability and dividend, by a sum of money but consisting of a series of mutual covenants entered into by all the shareholders inter se in accordance with S.16 of the Companies Act, 1862, and made up of various rights and liabilities contained in the contract, including the right to a certain sum of money. (Vide Balances Trustee v. Steel Brothers and Co. Limited) 1901 (1) Ch. 279

10. "What is taken over by the Indian Company is the assets and business liabilities of M/s. Harrisons and Crosfield (UK) Limited in India and so in any event it can not be said that the Indian Company has taken over all the shares held by Indian citizens in Messrs. Harrisons and Crosfield (UK) Limited. The counsel for the 1st respondent submitted that there is no bar for Indian citizens to hold shares in a U. K. Company and in fact, so many Indian citizens are having shares in Messrs, Harrisons and Crosfield (UK) Limited. In this view, the contention of the petitioner is not sustainable I hold that even if the petitioner has got the shares of her father transferred to the petitioner and the 2nd respondent and that those were shares of Messrs. Harrisons and Crosfield (UK) Limited, the petitioner and the 2nd respondent cannot claim shares in Messrs. Harrisons Malayalam Limited and so, this Court is not in a position to rectify the share register of 1st respondent.

11. The counsel for the 1st respondent also submitted before me that there is no clear evidence in this case that the petitioner has obtained shares of Messrs. Harrisons and Crosfield (UK) Limited and if they have not obtained shares of Messrs. Harrisons and Crosfield (UK) Limited, they cannot have any claim at all. To meet this argument, the counsel for the petitioner submitted that S.155 of the Companies Act has got a wider scope and width and that this Court can make an investigation as regards the question whether the petitioner and the 2nd respondent have obtained shares of Messrs. Harrisons and Crosfield (UK) Limited. I feel that from the papers produced, though it is not conclusive, the possibility to a near certainty is that they have got the entitlement to hold shares in Messrs. Harrisons and Crosfield (UK) Limited. As I said earlier, that alone is not sufficient for me to act under S.155 of the Companies Act and rectify the share register. I do not want to say anything more on this aspect of the case. " .

The petition deserves to be dismissed and I do so. No costs.