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Padamati Reddy Linga and Another v Dharani Boreholes Ltd and Others (COMPANY PETITION NO. 07975 OF 2026)

Tribunal · [2026] UGRSB 23 · 2026 Petition Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Company petition seeking rectification of the company register and expungement of allegedly fraudulent filings
Decision
Petition granted. Company register rectified to restore original shareholding and directorship structure. Multiple resolutions and transfer forms expunged as invalid.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Assistant Registrar of Companies held that multiple resolutions and share transfer forms filed between December 2024 and January 2026 were misleading, inaccurate, or illegally obtained. The resolution of 8 January 2025 purporting to transfer 18 shares from the first petitioner was invalid as he held only 10 shares. Subsequent resolutions removing the first petitioner as director and transferring shares to the third respondent were also invalid for lack of proper meeting minutes and non-compliance with pre-emption rights. The register was ordered rectified to restore the original shareholding structure.

Outcome

Petition granted. Company register rectified to restore original shareholding and directorship structure. Multiple resolutions and transfer forms expunged as invalid.

Facts

Dharani Boreholes Ltd was incorporated on 17 June 2019 with two shareholders: Kandadi Mahipal Reddy holding 90 shares and Padamati Linga Reddy holding 10 shares. Between December 2024 and January 2026, a series of resolutions were filed purporting to transfer shares and alter directorship. A resolution dated 1 December 2024 purported to transfer 18 shares from Linga to Nalla Vamshidhar Reddy, though Linga held only 10 shares. A resolution dated 15 April 2025 purported to transfer Linga's 10 shares to Mahipal and remove him as director. A resolution dated 27 January 2026 transferred 10 shares from Mahipal to his wife Kandadi Manasa. The petitioners alleged these resolutions bore forged signatures and were passed without proper meetings. The respondents counter-alleged that the petitioners perpetrated the forgeries. A memorandum of understanding dated 3 January 2026 recorded an agreement for Mahipal to purchase the petitioners' shares, but Mahipal defaulted on payment.

Issues

  1. Whether the contested documents were validly filed?
  2. What remedies, if any, are available to the parties?

Orders

  • Special resolution dated 01 December 2024 registered on 08 January 2025 expunged from the register.
  • Transfer of share stock form registered on 08 January 2025 transferring 18 shares from Kandadi Reddy Mahipal to Nalla Vamshidhar Reddy expunged.
  • Certificate of share stock form registered on 08 January 2025 expunged.
  • Board resolution dated 27 January 2026 registered on 29 January 2026 transferring 10 shares to Kandadi Manasa expunged.
  • Transfer of share stock form registered on 29 January 2026 expunged.
  • Certificate of Transfer of Share Stock registered on 29 January 2026 expunged.
  • Special resolution dated 15 April 2025 registered on 22 April 2025 transferring 10 shares from Padamati Reddy Linga to Kandadi Reddy Mahipal expunged.
  • Transfer of share stock form registered on 22 April 2025 expunged.
  • Certificate of Transfer of Share Stock registered on 22 April 2025 expunged.
  • Ordinary resolution dated 15 April 2025 registered on 24 April 2025 removing Padamati Reddy Linga as director/secretary expunged.
  • Company form 20 dated 15 April 2025 registered on 24 April 2025 expunged.
  • Company register restored to original status before impugned filings.
  • Register rectified to reflect shareholding: Kandadi Mahipal Reddy 90% shares, Padamati Linga Reddy 10% shares.
  • Register rectified to reflect directorship: Kandadi Mahipal Reddy and Padamati Linga Reddy as directors, Padamati Linga Reddy as company secretary.
  • Company may file updated beneficial ownership particulars following rectification.
  • Disputes relating to contractual arrangements may be pursued before a court of competent jurisdiction.
  • Each party to bear its own costs.

Rules and key headnotes

Company Law — Share Transfers — Validity — Nemo Dat Quod Non Habet
A shareholder cannot validly transfer shares in excess of their actual shareholding. The principle nemo dat quod non habet applies: one cannot give what one does not possess. A resolution purporting to authorize a shareholder holding 10 shares to transfer 18 shares is invalid and any subsequent transactions predicated on such invalid transfer are equally defective.
Company Law — Resolutions — Validity — Minutes of Meetings
Under section 148 of the Companies Act Cap. 106, companies must maintain minutes of all proceedings at general meetings and directors' meetings. Where minutes have been properly made, there is a legal presumption that the meeting was duly held and convened. Where no minutes or attendance records are produced to evidence that a meeting took place, and no notice calling the meeting is shown, resolutions purportedly passed at such meetings are invalid and may be expunged as having been illegally or wrongfully obtained.
Company Law — Share Transfers — Pre-emption Rights — Articles of Association
Where a company's Articles of Association provide that a shareholder wishing to transfer shares must first formally offer them to remaining shareholders, failure to comply with this pre-emption right undermines the validity of any transfer to an outsider. Such pre-emption rights protect existing shareholders by giving them priority to purchase shares before they are offered to third parties, thereby preserving their ownership percentage and guarding against unwanted dilution.
Company Law — Registrar of Companies — Powers — Rectification of Register
Under Regulation 8 of the Companies (Powers of the Registrar) Regulations SI No. 71 of 2016, the Registrar of Companies may rectify and update the register to ensure accuracy and may expunge any information or document that is misleading, inaccurate, issued in error, contains an illegal endorsement, or is illegally or wrongfully obtained. The Registrar's mandate is confined to defects that are apparent, objective, and verifiable from the company's records.
Company Law — Registrar of Companies — Jurisdiction — Contractual Disputes
The Registrar of Companies' jurisdiction under Regulation 8 of the Companies (Powers of the Registrar) Regulations is limited to maintaining the accuracy and integrity of the register by correcting defects that are readily ascertainable, objective, and verifiable from the register itself. Where determination of an issue necessitates inquiry into matters such as alleged breaches of contractual obligations or involves derivative claims, such matters fall outside the Registrar's limited scope and must be pursued before the High Court.
Administrative Law — Illegality — Effect on Subsequent Proceedings
Once an illegality is brought to the attention of a tribunal or court, it cannot be ignored and overrides all questions of pleadings including admissions made therein. A resolution or transaction founded upon an earlier illegal or invalid act is itself tainted and cannot stand. This principle applies equally to proceedings before the Registrar of Companies.

Legislation cited (3)

  • Companies Act Cap. 106 s.148
  • Companies (Powers of the Registrar) Regulations SI No. 71 of 2016 Regulation 8
  • Companies (Powers of the Registrar) Regulations SI No. 71 of 2016 Regulation 32

Cases cited (1)

  • Makula International Ltd v His Eminence Cardinal Nsubuga and Another (1982) HCB 11

Full judgment

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Padamati Reddy Linga and Another v Dharani Boreholes Ltd and Others (COMPANY PETITION NO. 07975 OF 2026) [2026] UGRSB 23 (21 April 2026)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.