Page 27
REFUSAL OF REGISTRATION AND APPEAL [SECTION 58]
The securities and other interest of any member in a public company shall be freely transferable.
Any contract or arrangement between two or more persons in respect of transfer of securities shall be enforceable as a contract. This means any shareholders’ agreement restricting transferability of shares in a public company shall be a private contract among contracting members.
If a private company limited by shares refuses to register the transfer or transmission of any securities or interest of a member in the company, it shall, send a notice of the refusal to transferor, transferee or person sending intimation giving reason for such refusal. This intimation shall be send within a period of thirty days from the date of receipt of instrument of transfer or intimidation for transmission.
The transferee may appeal to the tribunal against the refusal within a period of thirty days from the date of receipt of the notice. Where no notice has been send by the company, transferee may appeal to the tribunal within a period of sixty days from the date on which the instrument of transfer or intimation of transmission was delivered to the company.
If a public company without sufficient cause refuses to register the transfer of securities within a period of thirty days from the date on which the instrument of transfer or the intimation of transmission, as the case may be, is delivered to the company, the transferee may, within a period of sixty days of such refusal or where no intimation has been received from the company, within ninety days of the delivery of the instrument of transfer or intimation of transmission, appeal to the Tribunal.
The tribunal after hearing the parties, may either dismiss the appeal or by order –
(a) Direct that the transfer or transmission shall be registered by the company and company shall comply with such order within a period of ten days of receipt of the order; or
(b) Direct rectification of the register and also direct the company to pay damages sustained by any party.
If a person contravenes the order of the Tribunal under this section, he shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.
Please continue to next page of this post.
AishMGhrana 