Mohan Ram Prasad Devineni Vs Biochemical & Synthetic Products Private Limited (NCLAT Chennai)
NCLAT Chennai held that direction for issuance of valid share certificate doesn’t fall within the scope of section 59 of the Companies Act. Accordingly, order rejecting application u/s. 59 as not maintainable justified. Thus, company appeal is dismissed.
Facts- The Appellant before this Appellate Tribunal is the Applicant in the proceedings under Section 59 of the Companies Act, 2013, which were registered as C.P. No. 3/59/HDB/2024 before the learned NCLT, Hyderabad Bench. The proceedings initiated by the Appellant, by invoking Section 59 of the Companies Act, 2013, were ultimately rejected on the ground of non-maintainability.
Conclusion- Held that Section 59 of the Companies Act is exclusively limited to the rectification of the register of members. In the present case, however, the relief sought pertains to a direction for issuance of a valid share certificate, which does not fall within the scope of Section 59 of the Companies Act. There is no anomaly in the findings recorded by the Ld. Tribunal. Since there is no privity of contract as employer and employee between the Applicant and Respondent No. 1, and as the matter involves complex questions of fact requiring scrutiny of evidence before arriving at a conclusion, a proceeding under Section 59, which is summary in nature, cannot be invoked. Hence, the rejection of the application by the impugned order dated 07.03.2025, holding the proceeding under Section 59 of the Companies Act to be not maintainable, does not suffer from any apparent error warranting interference. Accordingly, the company appeal lacks merit and is hereby dismissed.
