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- Maintainability of the appeal by the transferor of the shares Analysis: 1. Maintainability of the appeal by the transferor of the shares: The case involved an appeal filed by an appellant-company against an order passed by the Company Law Board, where the objection raised by the appellant-company was overruled. The respondent, a shareholder, had transferred shares to certain individuals, but the company refused to effect the transfer. The respondent filed a petition under section 111A(2) of the Companies Act, 1956. The company contended that the respondent, as a transferor, was not entitled to file an appeal under section 111A(2). The court observed that under section 111A, the right of appeal is provided only to the transferee, not the transferor. The court clarified the distinction between section 111 and section 111A, highlighting that a transferor cannot maintain the appeal in companies falling under section 111A of the Act. 2. The court also addressed the misconception that the Company Law Board is a court of equity. It emphasized that the Board is a statutory body with specific functions defined by the statute and cannot act beyond the statutory provisions based on equity or other grounds. The court set aside the impugned order and dismissed the company petition as not maintainable by the transferor, thereby allowing the company appeal. 3. The judgment highlighted the provisions of section 111A(2) regarding the rectification of the register on transfer of shares. It outlined that if a company unjustly refuses to register the transfer of shares within two months, the transferee can appeal to the Tribunal for direction. In contrast, section 111(2) allows both the transferor and transferee to appeal against the company's refusal to register the transfer. The court's analysis focused on the specific rights granted to the transferor and transferee under these sections based on the type of company involved. 4. The court noted the absence of the respondent's counsel during the proceedings, leading to the matter being heard and disposed of on its merits. This aspect emphasized the importance of legal representation and participation in legal proceedings to ensure a fair and comprehensive consideration of the case. The judgment provided a detailed analysis of the legal provisions, the parties' contentions, and the correct interpretation of the law to determine the maintainability of the appeal by the transferor in the context of the Companies Act, 1956.
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