Section 111A - Rectification of register on transfer. - Companies Act, 1956

[1] Rectification of register on transfer. 111A. (1) In this section, unless the context otherwise requires, "company" means a company other than a company referred to in sub-section (14) of section 111 of this Act. (2) Subject to the provisions of this section, the shares or debentures and any interest therein of a company shall be freely transferable: [2] [Provided that if a company without sufficient cause refuses to register transfer of shares within two months from the date on which the instrument of transfer or the intimation of transfer, as the case may be, is delivered to the company, the transferee may appeal to the 1[Tribunal] and it shall direct such company to register the transfer of shares.] [3] [ (3) The 1[Tribunal] may, on an application made by a depository, company, participant or investor or the Securities and Exchange Board of India, if the transfer of shares or debentures is in contravention of any of the provisions of the Securities and Exchange Board of India Act, 1992, (15 of 1992) or regulations made thereunder or the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) or any other law for the time being in force, within two months from the date of transfer of any shares or debentures held by a depository or from the date on which the instrument of transfer or the intimation of the transmission was delivered to the company, as the case may be, after such inquiry as it thinks fit, direct any depository or company to rectify its register or records.]. (4) The [4] [Tribunal] while acting under sub-section (3), may at its discretion make such interim order as to suspend the voting rights before making or completing such enquiry. (5) The provisions of this section shall not restrict the right of a holder of shares or debentures, to transfer such shares or debentures and any person acquiring such shares or debentures shall be entitled to voting rights unless the voting rights have been suspended by an order of the 1[Tribunal]. (6) Notwithstanding anything contained in this section, any further transfer, during the pendency of the application with the 1[Tribunal], of shares or debentures shall entitle the transferee to voting rights unless the voting rights in respect of such transferee have also been suspended. (7) The provisions of sub-sections (5), (7), (9), (10) and (12) of section 111 shall, so far as may be, apply to the proceedings before the 1[Tribunal] under this section as they apply to the proceedings under that section.] --------------------------------- Notes:- [1] Inserted by the Depositories Act, 1996, w.r.e.f. 20-9-1995. [2] Inserted by the Depositories Related Laws (Amendment) Act, 1997 (8 of 1997), w.e.f. 15-1-1997. [3] Substituted by the Depositories Related Laws (Amendment) Act, 1997 (8 of 1997) w.e.f. 15-1-1997 Prior to its substitution, sub-section (3) was inserted by the Depositories Act, 1996, w.r.e.f. 20-9-1995. "(3) The Company Law Board may on an application made by a depository, company, participant or investor or the Securities and Exchange Board of India within two months from the date of transfer of any shares or debentures held by a depository or from the date on which the instrument of transfer or the intimation of transmission was delivered to the company as the case may be, after such inquiry as it thinks fit, direct any company or depository to rectify register or records if the transfer of the shares or debentures is in contravention of any of the provisions of the Securities and Exchange Board of India Act, 1992 (15 of 1992) or regulations made thereunder or the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986)." [4] Substituted for "Company Law Board" by the Companies (Second Amendment) Act, 2002, w.e.f. a date yet to be notified.