Chapter IV - Share Capital and Debentures
Section 59
Section 59: appeal to the Tribunal to rectify the register of members
Where a name is wrongly entered in or omitted from the register of members, or entry of a member’s joining or leaving is not made or is delayed, the person aggrieved, a member or the company may appeal to the Tribunal for rectification.
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This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) If the name of any person is, without sufficient cause, entered in the register of members of a company, or after having been entered in the register, is, without sufficient cause, omitted therefrom, or if a default is made, or unnecessary delay takes place in entering in the register, the fact of any person having become or ceased to be a member, the person aggrieved, or any member of the company, or the company may appeal in such form as may be prescribed, to the Tribunal, or to a competent court outside India, specified by the Central Government by notification, in respect of foreign members or debenture holders residing outside India, for rectification of the register.
(2) The Tribunal may, after hearing the parties to the appeal under sub-section (1) by order, either dismiss the appeal or direct that the transfer or transmission shall be registered by the company within a period of ten days of the receipt of the order or direct rectification of the records of the depository or the register and in the latter case, direct the company to pay damages, if any, sustained by the party aggrieved.
(3) The provisions of this section shall not restrict the right of a holder of securities, to transfer such securities and any person acquiring such securities shall be entitled to voting rights unless the voting rights have been suspended by an order of the Tribunal.
(4) Where the transfer of securities is in contravention of any of the provisions of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Securities and Exchange Board of India Act, 1992 (15 of 1992) or this Act or any other law for the time being in force, the Tribunal may, on an application made by the depository, company, depository participant, the holder of the securities or the Securities and Exchange Board, direct any company or a depository to set right the contravention and rectify its register or records concerned.
Introduction
Section 59 gives the National Company Law Tribunal power to order registration of a transfer or transmission, rectification of the register or depository records, and damages. It also covers transfers that contravene securities laws or the Act.
Sub-section (5), which punished non-compliance with a Tribunal order under this section, was omitted by section 10 of the Companies (Amendment) Act, 2020 with effect from 21 December 2020 (S.O. 4646(E)).
Key takeaways
Who may appeal
The person aggrieved, any member of the company, or the company itself.
Tribunal orders
Dismiss the appeal, direct registration within ten days, or direct rectification of the register or depository records with damages.
Securities-law breaches
On application by the depository, company, depository participant, holder or SEBI, the Tribunal may direct the contravention to be set right.
Grounds for rectification
A name may have been entered in the register without sufficient cause, or omitted without sufficient cause. Alternatively, there may be a default or unnecessary delay in entering that a person has become or ceased to be a member. The appeal is in the prescribed form, to the Tribunal or, for foreign members or debenture holders residing outside India, to a competent court outside India specified by the Central Government by notification.
What the Tribunal may order
After hearing the parties, the Tribunal may dismiss the appeal or direct the company to register the transfer or transmission within ten days of receiving the order. It may instead direct rectification of the depository records or the register and order the company to pay damages to the aggrieved party.
Transfer rights and securities-law contraventions
Section 59 does not restrict a holder’s right to transfer securities. An acquirer is entitled to voting rights unless the Tribunal has suspended them. Where a transfer contravenes the Securities Contracts (Regulation) Act, 1956, the SEBI Act, 1992, the Companies Act or any other law, the Tribunal may act on an application by the depository, company, depository participant, holder or SEBI. It may direct a company or depository to set right the contravention and rectify its register or records.
Amendment and commencement
Section 59 came into force on 12 September 2013 under S.O. 2754(E). Sub-section (5) was omitted with effect from 21 December 2020, so the section no longer contains its own punishment for non-compliance with the Tribunal’s order.
Practical preparation
Identify the wrong entry, omission or delay. Gather the transfer or transmission documents and correspondence. File the appeal in the prescribed form. Track compliance within the ten-day period after the order. Update the register or depository records.
Practical checklist
Do
- Keep the instrument of transfer, the transmission documents and company correspondence.
- Comply with any registration order within ten days of receiving it.
Avoid
- Do not treat section 59 as a bar on transferring securities while a dispute is pending, unless the Tribunal orders otherwise.
Illustrative example
Hypothetical: transmission not recorded
A legal heir’s transmission request is not entered in the register for several months.
Ground
Unnecessary delay in entering the fact of a person becoming a member.
Appeal
The heir appeals to the Tribunal in the prescribed form.
Order
The Tribunal may direct registration within ten days and award damages.
Outcome
- The register is rectified on the Tribunal’s order.
Glossary
- Register of members
- The company’s statutory record of its members, which section 59 allows the Tribunal to rectify.
- Tribunal
- The National Company Law Tribunal constituted under the Act.
Frequently asked questions
Can the company itself apply?
Yes. The person aggrieved, any member or the company may appeal under section 59(1).
Is there still a specific penalty in section 59 for ignoring the Tribunal’s order?
No. Sub-section (5) was omitted with effect from 21 December 2020. Check the other provisions of the Act that may apply.
Can SEBI seek rectification?
Under section 59(4), SEBI is among those who may apply where a transfer contravenes securities laws, the Act or any other law.
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026