Sections 59 and 60 of the Companies Act, 2013: Rectification of Register of Members and Publication of Capital
Sections 59 and 60 form part of Chapter IV of the Companies Act, 2013 dealing with share capital and debentures. Section 59 provides a statutory remedy for rectification of a company's register of members in specified cases, while Section 60 regulates how a company states its authorised capital in notices, advertisements, official publications and business stationery.
Section 59 - Rectification of Register of Members
Meaning: Rectification means correction of the register of members or connected depository records when a person's name has been entered or omitted without sufficient cause, or when there is default or unnecessary delay in recording that a person has become or ceased to be a member.
Who may seek rectification?
Under Section 59(1), the person aggrieved, any member of the company, or the company itself may approach the National Company Law Tribunal (NCLT) for rectification. In the case of specified foreign members or debenture holders residing outside India, the provision also refers to a competent court outside India notified by the Central Government.
When can Section 59 be invoked?
The remedy applies where a person's name is entered in the register without sufficient cause; a person's name, after having been entered, is omitted without sufficient cause; or there is default or unnecessary delay in entering the fact that a person has become or ceased to be a member.
Orders the Tribunal may pass
After hearing the parties, the Tribunal may dismiss the appeal, direct registration of a transfer or transmission within ten days of receipt of its order, or direct rectification of the depository records or register. Where rectification is directed, the Tribunal may also order the company to pay damages sustained by the aggrieved party.
Transfer and voting rights
Section 59(3) preserves the right of a holder to transfer securities. A person acquiring the securities is entitled to voting rights unless those voting rights have been suspended by an order of the Tribunal.
Transfers contrary to securities law or other law
Under Section 59(4), where a transfer of securities contravenes the Securities Contracts (Regulation) Act, 1956, the Securities and Exchange Board of India Act, 1992, the Companies Act, 2013, or another law in force, the Tribunal may direct the company or depository to set the contravention right and rectify the relevant register or records. An application may be made by the depository, company, depository participant, holder of securities or the Securities and Exchange Board of India.
Procedure before the NCLT under Section 59
Rule 70 of the National Company Law Tribunal Rules, 2016 deals with appeals under Sections 58 and 59. A proceeding for rectification under Section 59 is made to the Tribunal by petition in Form NCLT-1 with the documents specified in Annexure B. A copy is to be served on the concerned company at its registered office immediately after filing. Rule 70 also contains requirements concerning advertisement before hearing and permits the Tribunal to grant appropriate interim, costs, incidental and consequential orders.
| Point | Section 59 position |
|---|---|
| Primary forum | National Company Law Tribunal |
| Typical grievance | Wrongful entry or omission, or default/unnecessary delay in updating membership |
| Relief | Registration of transfer/transmission, rectification of register/depository records and, where applicable, damages |
| NCLT procedure | Rule 70, NCLT Rules, 2016; petition in Form NCLT-1 |
| Former Section 59(5) | Omitted with effect from 21 December 2020 |
Section 60 - Publication of Authorised, Subscribed and Paid-up Capital
Meaning: Section 60 is a disclosure provision. Where a company chooses to state the amount of its authorised capital in specified company communications, it must also state its subscribed capital and paid-up capital with equal prominence.
Section 60(1) - Equal prominence of capital figures
If a notice, advertisement, other official publication, business letter, billhead or letter paper of a company contains a statement of the amount of authorised capital, it must also contain, in an equally prominent position and equally conspicuous characters, the amount of subscribed capital and the amount paid-up.
Section 60(2) - Penalty for default
For non-compliance with Section 60(1), the company is liable to a penalty of Rs. 10,000 and every officer of the company who is in default is liable to a penalty of Rs. 5,000 for each default.
Key distinction between Sections 59 and 60
Section 59 is remedial and adjudicatory: it provides a route for correcting membership records and related depository records. Section 60 is a disclosure and compliance provision: it prevents a company from publicising authorised capital without equally prominent disclosure of the amount actually subscribed and paid-up.
Related provisions
For disputes concerning refusal to register transfer or transmission of securities, see Sections 57 and 58 of the Companies Act, 2013. For the general rules on transfer and transmission, see Section 56 of the Companies Act, 2013.
This article is a general legal reference. The applicable Act, rules, notifications and current procedural requirements should be checked for a particular filing or dispute.