Refusal to Register Transfer and Appeal against Refusal :
Section 58 of the Companies Act, 2013, deals with process of the company to be followed by on refusal to register the transfer of securities.
(i) If a private company limited by shares refuses, to register the transfer of, or the transmission of the right to any securities or interest of a member in the company, then the company shall send notice of the refusal to the transferor and the transferee or to the person giving intimation of such transmission, within a period of thirty days from the date on which the instrument of transfer, or the intimation of such transmission, was delivered to the company.
The securities or other interest of any member in a public company are freely transferable, subject to the contract/arrangement.
(ii) The transferee may appeal to the Tribunal against the refusal within a period of thirty days from the date of receipt of the notice or in case no notice has been sent by the company, within a period of sixty days from the date on which the instrument of transfer or the intimation of transmission, was delivered to the company.
(iii) 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, 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.
(iv) The Tribunal, while dealing with an appeal may, after hearing the parties, either dismiss the appeal, or by order—
(a) direct that the transfer or transmission shall be registered by the company and the company shall comply with such order within a period of ten days of the receipt of the order; or
(b) direct rectification of the register and also direct the company to pay damages, if any, sustained by any party aggrieved.
(v) If a person contravenes the order of the Tribunal he shall be punishable with imprisonment for a term not less than one year but may extend to three years and with fine not less than one lakh rupees which may extend to five lakh rupees.
As the sections 58 and 59 of the Companies Act, 2013 provide for certain powers of the Tribunal which deal with hearing of an appeal against the refusal of registration or rectification of name of members in the register of members of a company respectively.
And the constitution of the Tribunal following the procedure specified under Chapter XXVII of the said Act is likely to take some time. In order to remove difficulties in compliance with the provisions of section 58 and section 59 of the Companies Act, 2013 in so far as they relate to exercise of certain powers by the Tribunal during the period it is duly constituted under the said Act. The Ministry of Corporate Affairs issued an order called as, the Companies (Removal of Difficulties) Order, 2013 on 20th September, 2013. By this order Ministry clarified that until a date is notified by the Central Government under section 434(1) of the Companies Act, 2013 for transfer of all matters, proceedings or cases to the Tribunal constituted under the Companies Act, 2013, till the time the Board of Company Law Administration shall exercise the powers of the Tribunal under sections 58 and section 59 in pursuance of the second proviso to section 465(1) of the Companies Act, 2013.