Section 95 of Companies Act. Registers, etc., to be evidence.

“The registers, their indices and copies of annual returns maintained under sections 88 and 94 shall be prima facie evidence of any matter directed or authorized to be inserted therein by or under this Act.”

Scope of section 95 of Companies Act

The section 95 of this act makes the register and copies of annual return maintained by the company as the prima facie evidence. That means the register and the copies of the annual return maintained by the company are themselves as a satisfactory proof that the court will count them and mark them as prior evidence in civil cases. The penalties imposed on company under section 88 and section 94 on the company shall only by liable when the court admits the register and copies of annual return as primary evidence and held company or any such officer of the company liable.

What’s ‘Prima Facie Evidence’?

Prima facie is a legal term used in civil cases where the plaintiff carries the burden of proof. It refers to a case where pre-trial evidence is reviewed by a judge and determined to be sufficient to warrant a trial. In civil litigation, a lawsuit is filed against the plaintiff claiming that the defendant’s actions or inactions caused an injury. The complaint must provide background information and the defendant’s contribution to the injury. The court must determine if the case is valid and merit full before proceeding. If the plaintiff fails to provide sufficient evidence, the court may dismiss the case before trial. If a prima facie case exists, the defendant must produce evidence to fight the claims made against them. In some cases, the evidence presented in a claim can allow for summary judgment. Once a prima facie case is established, the burden of proof shifts from the plaintiff to the defendant, who must prove that the claims against them are not valid enough for conviction. 

Where there in this act any act described under this act, or anywhere in this act there is requirement of register maintained by the company or the copies of the annual return. Where there is any act described under this act which requires the register or the copies of annual return, and the company fails to provide such register or copies of the annual return then the aggrieved party when take it to court. It will become a burden on the company to provide such register if the register asked by any shareholder, promoter or etc. for inspection. Hence, the register and copies of annual return will be count as prima facie evidence i.e. then such register and copies of annual return will be counted das the primary evidence as it clears the thing and gives clear picture of company’s practise follows the ethics or not.

Illustration

Consider a scenario in which Mr. Krishna, a stakeholder in ABC Private Limited, asserts that he is the owner of a specific number of shares. The business, though, contests his assertion. They use the company’s record of members, which is kept up to date in accordance with Section 88 of the Companies Act of 2013, to settle this disagreement. Upon inspection, it is evident from the register that Mr. Krishna’s name and the quantity of shares he owns are recorded. In accordance with Section 95, this register supports Mr. Krishna’s claim without the urgent need for more evidence because it acts as prima facie evidence of his shareholding in the business.

Precedent under Section 95 of Companies Act: Yash Vardhan Mall vs Indra Puri Studios Pvt. Ltd.

In a rejoinder, the appellant’s learned senior counsel reaffirmed that Article 30 of the Articles of Association permits the transfer of shares to non-members of the business when doing so serves the business’s interests. The appellant also emphasized that 4160 shares were transferred to the appellant by R-2, which were registered in the Register of Members following the Board of Directors’ approval.

To bolster his argument, he has provided a list of individuals who were not members of the company and who received share transfers beginning in 1987–1988. He also notes that Mr. Tejash Doshi, Smt. Shrutika Doshi, and Smt. Rashmi Bubna were also recipients of these transfers at the time they were not shareholders of the company. He has vehemently maintained that the R-1 Company and its Managing Director had a duty to uphold the natural justice principle before canceling the shares since the appellant’s name was added to the Register of Members and the shares were transferred in compliance with the Board of Directors’ decision.

Moreover, he contended that the justification for cancelling 4160 shares—that is, the infringement of Article 30 of the Articles of Association—was an afterthought and that there was insufficient justification provided in the letter cancelling the shares. Additionally, he has maintained that the Register of Members as it existed following the recording of the transfer of 4160 shares was the prima facie evidence of the appellant’s ownership of the shares, in accordance with Section 95 of the Companies Act, 2013 which stipulates that the Register of Members maintained by the Company shall be the prima facie evidence of ownership of shares.

Conclusion

The Companies Act of 2013 requires companies to maintain registers, indices, and annual returns as prima facie evidence of any matter directed or authorized to be inserted therein. Section 95 of the act makes these registers and copies of annual returns as primary evidence, which the court will count and mark as prior evidence in civil cases. The penalties imposed on companies under these sections will only be liable when the court admits the register and copies of annual returns as primary evidence and holds them liable. Prima facie evidence is a legal term used in civil cases where the plaintiff carries the burden of proof. If a prima facie case exists, the defendant must produce evidence to fight the claims made against them. If a company fails to provide the required register or copies of annual returns, it becomes a burden on the aggrieved party when taken to court. The register and copies of annual returns are counted as primary evidence as they clear the thing and give a clear picture of the company’s practice follows the ethics.

FAQs

1. What’s ‘prima Facie Evidence’?

A legal claim contains enough evidence, after preliminary review, to move on with a trial or judgment.

2. What are the prima facie evidence under Companies Act, 2013?

According to section 95 of this act, Register, indices, copies of annual return maintained by the company are prima facie evidence.

3. When does burden of proof is on company?

When a company asked to produce such documents under section 88 or 92 od this act by any promoters, shareholder or etc. but the company fails to do so. Then further in legal action the burden of proof will be on the company as they failed to produce so.

4. When does the register, indices and copies of annual return become prima facie evidence?

When the company required to maintain such documents under section 88 and 94 of this act, but the company’s fail to do so then these documents becomes ‘prima facie evidence’.

5. When does the section 95 comes into role?

Section 95 of this act comes into role where there is question of fact that the requirement of such document was urgency but the company did not provide such documents.