SC rules on correction of register of members, declares CDS and company records legally distinct

ISLAMABAD, (APP - UrduPoint / Pakistan Point News - 22nd Apr, 2026) The Supreme Court of Pakistan has settled an important legal question regarding the correction of the register of members under the Companies Act, 2017, holding that records maintained in the Central Depository System (CDS) and a company’s own register of members have separate and independent legal status. Consequently, restrictions applicable to one system do not automatically apply to the other.

The detailed judgment, approved for reporting, was issued by a five-member bench headed by Justice Shahid Waheed and comprising Justice Naeem Akhtar Afghan, Justice Malik Shahzad Ahmad Khan, Justice Aqeel Ahmed Abbasi and Justice Shakeel Ahmed.

The court was hearing Civil Appeal along with three connected cases. The key question before the bench was whether applications filed for rectification of the register of members under Section 126 of the Companies Act, 2017 are subject to any limitation period.

It was submitted before the court that the Lahore High Court had dismissed similar petitions on the ground of delay, applying Article 181 of the Limitation Act, 1908.

The petitioners argued that the right to seek rectification of the register is a continuing right and should not be restricted by a strict limitation period.

In its detailed ruling, the apex court observed that a company’s register of members is a fundamental legal document that serves as proof of shareholding and shareholders’ rights.

The court held that it has the authority to order correction of any wrongful entry or omission in this register.

The judgment further explained that the Central Depository System (CDS) is a separate electronic framework designed to ensure dematerialisation and secure transfer of shares. The court clarified that under Section 11 of the Central Depositories Act, 1997, direct amendments to the Central Depository Register (CDR) are not permitted; however, this restriction applies only to the depository system and not to the company’s own register of members.

The court emphasized that the right to seek rectification under Section 126 of the Companies Act, 2017 remains intact and enforceable.

It further held that there is no conflict between the two laws that would give overriding effect to one over the other, and therefore, a harmonious interpretation must be adopted.

Declaring the matter purely legal in nature, the court noted that interpretation of law, rather than factual controversy, was central to the case. On this basis, all petitions were clubbed together and decided through a consolidated judgment.