If a company refuses, whether in pursuance of any power of the company under its articles or otherwise, to register the transfer of any shares of a member in the company, it shall within two months from the date on which the instrument of transfer was delivered to the company, send notice of the refusal to the transferee and the transferor, giving reasons for such refusal.
The transferor or transferee may appeal to the Company Law Board (Tribunal) against any refusal of the company to register the transfer or to send notice of its refusal to register the same.
The appeal can be made within two months of the receipt of the notice of such refusal or, where no notice has been sent by the company, within four months from the date on which the instrument of transfer was delivered to the company.
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ADVERTISEMENTS:
The Company Law Board (Tribunal) after hearing the parties, may either dismiss the appeal or reject the application, or by order direct that the transfer shall be registered by the company. The company shall have to comply with such order within ten days of the receipt of the order.
If default is made in giving effect to the orders of the Company Law Board (Tribunal), the company and every officer of the company who is in default shall be punishable with fine which may extend to Rs. 10,000 and with a further fine which may extend to Rs. 1,000 for every day after the first day after which the default continues.
Blank Transfer:
Blank transfer means a transfer form signed by the transferor of shares and completed in all respect except the name and signature of the transferee. It gives the right to the transferee of shares to get the shares registered to himself or to transfer the shares to any other person without undergoing the formalities of transfer of shares with respect to fresh transfer form and payment of stamp duty.
ADVERTISEMENTS:
A blank transfer can remain in circulation and valid only for 12 months after it is signed by the prescribed authority or the company closes its register of members whichever is later in case of shares of listed companies. In case of shares of other companies, the blank transfer shall be valid only for 2 months from the date it is signed by the prescribed authority.