X applied for 400 shares in XYZ Ltd and paid ₹2.50 on the face value of ₹10 but no allotment was made to him. Subsequently 400 shares were allotted and issued to him without his request and his name was entered in the re

Section 95 of the Companies Act, 2013 provides that the register, their indices and copies of annual returns maintained under section 88 and 94 shall be prima facie evidence of any matter directed or authorised to be inserted therein by or under this Act. A register of members is prima facie evidence of the truth of its contents. Accordingly, if a person's name, to his knowledge, is there in the register of members of a company, he shall be deemed to be a member and onus lies on him to prove that he is not a member. He must promptly appeal to the Tribunal for rectification of the register under section 59 of the Companies Act, 2013 to take his name off the register, failing which the doctrine of holding out will apply. In Re. M.F.R.D. Cruz, A.I.R. 1939 Madras 803, the court held "when a person knows that his name is included in the register of shareholders and he stands by and allow his name to remain, he is holding out to the public that he is a shareholder and thereby he loses his right to have his name removed". Therefore, X's claim that he is not liable as a contributory is not tenable due to the doctrine of holding out, as he knew his name was on the register and took no steps to rectify it.