B.S Dhillon, J.:— Puran Devi, petitioner, owns 10 shares of Rs. 100 each fully paid up in New Khalsa Roadways Company (P.) Ltd. She has filed a petition under section 155 of the Companies Act, 1956 (hereinafter referred to as “the Act”). for the rectification of the register of the company. The company in question was registered as a private limited company on August 24, 1957, with the memorandum and articles of association, a copy whereof is annexure “A” to the petition. The authorised capital of the company was rupees one lakh, which was divided into 1,000 shares of Rs. 100 each. Initially, allotment for shares of Rs. 51,000 was made and subsequently allotment was made for the balance of shares worth Rs. 49,000 on March 5, 1971. Out of the balance of shares worth Rs. 49,000 capital shares allotted to Gurnam Singh, Kanwaljit Singh, Sucha Singh and Inderjit Singh, sons of Sawan Singh, respondents, were to the extent of ten shares each. Sawan Singh, respondent, was allotted another 210 shares and his wife, Chanan Kaur, 172 shares. It has been alleged in the petition that Gurnam Singh, Kanwaljit Singh, Sucha Singh and Inderjit Singh, sons of Sawan Singh, were minors at the time when shares were allotted to them on March 5, 1971, and except Gurnam Singh, the other respondents are still minors. It has been claimed that, according to article 9 of the articles of association of the company, no share can be allotted to a minor. Hence, the allotment of shares to the four minors made on March 5, 1971, was illegal. It has further been averred in the petition that Sawan Singh and his group consisting of his wife, sons and other relatives, transferred 600 shares to respondents Nos. 5 to 11 without complying with the provisions of article 21 of the articles of association of the company. It is alleged that Sawan Singh and his relatives did not notify their intention of transferring the shares to the directors of the company nor did the board of directors offer the shares to the existing shareholders of the company including the petitioner and thus it has been claimed that this transfer is in violation of article 21 of the articles of association. The averments made in the petition have been denied in the written statement filed on behalf of the respondents. A preliminary objection has been taken that petition under section 155 of the Act is not maintainable. It has been pleaded that the petitioner could move the Civil Court for getting the relief. It is claimed that the rectification petition can only be made to correct an error or defect or mistake and in the present petition the averments made are of invalidity of allotment and transfer of shares; the said question essentially relates to the civil rights of the parties and, therefore, the petition was not maintainable. As regards merits, the averments made in the petition have been denied. On the pleadings of the parties, the following issues were framed:

1. Whether the present petition is not maintainable?

2. Whether the petition is not triable and the petitioner should be directed to seek remedy in a civil court?

3. Whether the allotment of shares in favour of respondents Nos. 1 to 4, who are minors on March 5, 1971, was invalid?

4. Whether the transfer of shares made in the meeting of the board of directors held on May 27, 1971, was illegal? If so, what is the effect?

5. What relief is the petitioner entitled to?

2. The petitioner in support of the petition, examined P.W 1, Naginder Singh, Head Master, Khalsa High School, Baddon, District Hoshiarpur, and P.W 2, Shrimati Shanti Devi, Head Mistress, to prove the ages of Gurnam Singh, Sucha Singh, Kanwaljit Singh and Inderjit Singh, respondents.

3. The other witness produced by the petitioner in support of the petition is Sawan Singh, respondent, who transferred his shares along with those of his relatives. This witness deposed that he, as the managing director of the company till 1971, held share capital of Rs. 19,000, his wife held share capital of Rs. 5,000 and he purchased additional shares worth Rs. 30,000 whereas his wife purchased additional shares of Rs. 17,000 and his four sons subscribed the share capital of Rs. 1,000 each because of the additional allotment of shares made in 1971. According to his statement, Mota Singh, respondent, is his friend and on his request he transferred 600 shares of Rs. 100 each of the total face value of Rs. 60,000 to him out of his own holding. He deposed that he never informed the board of directors of his intention to transfer his shares and no notices were issued in that regard. This witness was confronted with the documents signed by him transferring the shares. He had to admit his signatures on the said documents. The first document put to him is dated May 7, 1971. He admitted his signatures on the same. He, however, stated that the said document purported to bear thumb impression of Chanan Kaur, his wife, whereby she resigned from the chairmanship of the company. He admitted his signatures on another document of the same date in English by which the charge of the office of chairmanship and that of the managing directorship was handed over by him and Chanan Kaur. The said signatures are marked exhibits R-1 and R-4. He denied that any meeting of the board of directors was held on May 27, 1971, and he had attended the same. When confronted with his signatures on the minutes book, exhibit R-5, he admitted the same to be his, but stated that no such meeting ever took place. In this meeting the board of directors was authorised to transfer his shares and those of his wife and his sons. He denied that the said proceedings were written on the proceedings book of the board of directors on page 14. He admitted signatures, exhibit R-6, to be his on the said proceedings. He, however, admitted that a proceedings book was maintained by the company for its meetings and one such minutes book was maintained for recording the proceedings of the meeting of the board of directors. He stated that he appended his signatures at the instatnce of Mota Singh, respondent, and he was in drunken condition when he put his signatures on these documents. He also admitted his signatures on the share transfer forms of his wife, etc., exhibits R-11 to R-13. While recording the evidence of this witness, R.S Narula J. (My lord the Chief Justice, as his Lordship then was) recorded the following note on the demeanour of this witness:

“From the demeanour of this witness in court it appears that he is not speaking the truth. He was trying to avoid to reply to the questions put to him in cross-examination. On the other hand, he readily and intelligently replied to the questions put to him in re-examination even without listening to the full questions. He appeared to understand everything but deliberately feigned like a simpleton during his cross-examination.”

4. The respondents examined Mota Singh (R.W 1), who purchased 600 shares of the company on May 27, 1971. The only other witness produced by the respondents is Nirwail Singh, who stated that notices regarding the transfer of shares were signed by him and sent to all the shareholders under postal certificates. This witness wanted to produce the postal certificates, but the learned judge recording the evidence refused the said documents to be brought on record as, according to him, the said documents could be manufactured at any time.

Issue Nos. 1 and 2.

5. I am inclined to uphold the contention raised by the learned counsel for the respondents that the averments made in this petition cannot be tried in a petition under section 155 of the Act. It is well settled that the proceedings under section 155 of the Act are of summary jurisdiction and in proper cases the company court would refuse to exercise jurisdiction under this section when complicated facts involving the civil rights of the parties are to be looked into. The said proceedings are meant for rectification of mistake or error of minor nature. It is in view of this background that it has to be decided on the facts and circumstances of this case whether the power vested in this court under section 155 of the Act should be exercised or not.

6. The averments made in the petition are that the transfer of shares in the names of the alleged minors is invalid and the further challenge of the transfer of shares by Sawan Singh to the respondents is that Sawan Singh did not give notice of his intention of selling his shares to the board of directors and to the members of the company and, therefore, the transfer in favour of the respondents was vitiated. The allegation that the requisite notice under section 21 of the articles of association was not given to all the shareholders, is again an allegation about the merits of transfer of shares. Similarly, the allotment of shares to the alleged minors is again a matter which affects the civil rights of the parties. As has been referred to above, Sawan Singh in his statement has stated that even though he had signed all the documents of transfer of shares, minutes of the meeting and all other necessary documents which were necessary to effect the transfer, yet, according to him, the said documents were got signed from him under undue influence when he was drunk. All the above disputed questions of facts can hardly be effectively gone into in proceedings under section 155 of the Act. From what has been stated above, the dispute between the parties is essentially of civil nature which can effectively be settled by having resort to proceedings in a civil court.

7. It is well-settled that where the allegation is of forgery and fabrication of documents, the said dispute cannot be gone into in the summary proceedings under section 155 of the Act and the company court is bound to refuse to exercise jurisdiction in such cases. Reference in this connection may be made to a decision of the Bombay High Court in Jayshree Shantaram Vankundre v. Rajkamal Kalamandir P. Ltd., [1960] 30 Comp Cas 141 (Bom), wherein it was held as follows:

“Where in an application for the rectification of the register of members of a company under section 155 of the Companies Act, 1956, discovery and inspection are necessary and complicated questions such as forgery and fabricated documents arise for decision the summary procedure of trial by petition under section 155 should not be allowed to be proceeded with; the applicant should be directed to file a suit.”

8. Similarly, where the very title to the holding of shares is challenged, the company court is bound to refuse to exercise jurisdiction. Reference in this connection may be made to a decision of the Delhi High Court in Public Trustee v. Rameshwar Tyagi, [1973] 43 Comp Cas 371 (Delhi), wherein it was held as follows (page 375):

“It is well established by decisions thereunder that the scope of section 155 is restricted to a summary inquiry. If, on the other hand, the very title to the holding of shares is challenged then the company judge will not inquire into such a dispute under section 155. For such inquiry a civil suit is the proper remedy.”

9. Their Lordships of the Supreme Court in Public Passenger Service Ltd. v. M.K Khadar, [1966] 36 Comp Cas 1 (SC) held that where by reason of complexity or otherwise the matter can more conveniently be decided in a suit, the court may refuse relief under section 155 in exercise of the discretionary jurisdiction and relegate the parties to a suit. However, their Lordships held that as to the invalidity of the notices, the matter can be summarily decided.

10. From what has been said above, it is to be seen that the relief under section 155 of the Act being discretionary, the court would be justified to refuse the relief when complicated questions of fact and law affecting the civil rights of the parties are involved. From the allegations made in the petition and the allegations as ethey emerge from the evidence led by the petitioner, it is obvious that the very title of the respondents to the shares got transferred by them by executing various documents, is being challenged.

11. Sawan Singh, though he admitted his signatures on all those documents, yet pleaded that he signed them under undue influence when he was drunk. These matters can hardly be gone into in the proceedings under section 155 of the Act which proceedings are essentially of summary nature. Keeping in view all these facts, in my opinion, it is a fit case where the petitioner should be declined the discretionary relief. Issues Nos. 1 and 2 are decided accordingly and it is held that the petition is not maintainable and the petitioner should be directed to seek her remedy in the civil court.

12. In view of my findings on issues Nos. 1 and 2, it is hardly necessary to record findings on issues Nos. 3, 4 and 5 because in view of the findings on issues Nos. 1 and 2 the petition has to be dismissed and I order accordingly with no order as to costs.