GOLCONDA INDUSTRIES PRIVATE LIMITED Vs. REGISTRAR OF COMPANIES

JUDGEMENT

(1.) Golconda Industries Private Limited (hereafter referred to as the appellant-company) allotted 496 shares of the face value of Rs. 100.00 each to various persons, some of whom, at the time of allotment, were minors. It is claimed. on behalf of the appellant-company that all the allotments made lo the minors were in pursuance of contracts entered into by them through their guardians. Pursuant to section 75(1) of the Companies Act, 1956, the appellant-company submitted a return of the allotments of the said 496 shares to the Registrar of Companies, respondent, on 9/3/1963. The Registrar of Companies treated the return as defective on the ground that certain shares had been allotted to minors and, therefore, declined to register the return. This was done by the Registrar in pursuance of the purported exercise of power under Regulation 17(2) of the Companies Regulations framed by the Central Government. The Regulations have been framed under section 609 of the said Act which empowers the Central Government to appoint Re- gistrars etc. and "make regulations with respect to their duties". It is appropriate to read the said Resolution-

(2.) Aggrieved by this refusal by the Registrar, the appellant- company filed a petition in the Punjab High Court under Article 226 of the Constitution. By order dated 3rd December, 196: Jindra Lal, J. dismissed the petition principally on the ground that there was no statutory obligation on the Registrar to accept the return of allotment of 9/3/1963. Jindra Lal, J. for mulated two questions for consideration-

(3.) The learned Judge answered the first question against the appellnt company on the ground that under section 41 of the said Act person can become a member of a company only if he agrees do so in writing and since a minor cannot enter into a contract, no allotment can be made in favour of a minor. It was, however, not disputed before the learned Single Judge that a minor can be share-holder of a company if the shares devolve upon him by operation of law, or by inheritance, or by transmission. On the second question, the learned Single Judge decided that Regulation