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The Companies Act, 1956

Title : The Companies Act, 1956

Year : 1956

Section -111 1* Power to refuse registration and appeal against refusal

(1) If a company refuses, whether in pursuance of any power of the company under its articles or otherwise, to register the transfer of, or the transmission by operation of law of the right to, any shares or interest of a member in, or debentures of, the company, it shall, within two months from the date on which the instrument of transfer, or the intimation of such transmission, as the case may be, was delivered to the company, send notice of the refusal to the transferee and the transferor or to the person giving intimation of such transmission, as the case may be, giving reasons for such refusal.

(2) The transferer or transferee, or the person who gave intimation of the transmission by operation of law, as the case may be, may appeal to the2*[Tribunal] against any refusal of the company to register the transfer or transmission, or against any failure on its part within the period referred to in sub-section (1), either to register the transfer or transmission or to send notice of its refusal to register the same.

(3) An appeal under sub-section (2) shall 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, or the intimation of transmission, as the case may be, was delivered to the company.

(4) If-

(a) the name of any person -

(i) As, without sufficient cause, entered in the register of members of a company, or

(ii) After having been entered in the register, is, without sufficient cause, omitted therefrom; Or

(b) Default is made, or unnecessary delay takes place, in entering in the register the fact of any person having become, or ceased to be a member [including a refusal under sub-section (1)],
the person aggrieved, or any member of the company, or the company, may apply to the1*[Tribunal] for rectification of the register.

(5) The2*[Tribunal], while dealing with an appeal preferred under sub-section (2) or an application made under sub-section (4) may, after hearing the parties, either dismiss the appeal or reject the application, 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 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.

(6) The2*[Tribunal], white acting under sub-section (5), may, at its discretion, make -

(a) Such interim orders, including any orders as to injunction or stay, as it may deem fit and just;

(b) Such orders as to costs as it thinks fit; and

(c) Incidental or consequential orders regarding payment of dividend or the allotment of bonus or rights shares.

(7) On any application under this section, the2*[Tribunal]-

(a) May decide any question relating to the title of any person who is a party to the application to have his name entered in, or omitted from the register;

(b) Generally, may decide any question which it is necessary or expedient to decide in connection with the application for rectification.

(8) The provisions of sub-sections (4) to (7) shall apply in relation to the rectification of the register of debenture-holders as they apply in relation to the rectification of the register of members.

(9) If default is made in giving effect to the orders of the 2*[Tribunal] under this section, the company and every officer of the company who is in default shall be punishable with fine which may extend to3*[ten thousand rupees], and with a further fine which may extend to3*[one thousand rupees] for every day after the first day after which the default continues.

(10) Every appeal or application to the2[Tribunal] under sub-section (2) or sub-section (4) shall be made by a petition in writing and shall be accompanied by such fee as may be prescribed.

(11) In the case of a private company which is not a subsidiary of a public company where the right to any shares or interest of a member in or debentures of, the company is transmitted by a sale thereof held by a court or other public authority, the provisions of sub-sections (4) to (7) shall apply as if the company were a public company:-

Provided
that the2*[Tribunal] may, in lieu of an order under sub-section (5) pass an order directing the company to register the transmission of the right unless any member or members of the company specified in the order acquire the right aforesaid within such time as may be allowed for the purpose by the order, on payment to the purchaser of the price paid by him therefore or such other sum as the2*[Tribunal] may determine to be a reasonable compensation for the right in all the circumstances of the case.

(12) If default is made in complying with any of the provisions of this section, the company and every officer of the company who is in default, shall be punishable with fine which may extend to4*[five hundred rupees] for every day during which the default continues.

(13) Nothing in this section and sections 108, 109 or 110 shall prejudice any power of a private company under its articles to enforce the restrictions contained therein against the right to transfer the shares of such company.]

5*[(14) In this section "company" means a private company and includes a private company which had become a public company by virtue of section 43A of this Act.]

111A -6* Rectification of register on transfer

(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:-

7*[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 8*[Tribunal] and it shall direct such company to register the transfer of shares.]

9*[(3) The 8*[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 there under 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 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 8*[Tribunal] while active under sub-section (3), may at its discretion make such interim order as to suspend the voting rights before making or completing such inquiry.

(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 8*[Tribunal].

(6) Notwithstanding anything contained in this section, any further transfer, during the pendency of the application with the 8* [Tribunal], of shares or debentures shall entitle the transferee to voting rights unless the voting rights in respect of such transferee have 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 8*[Tribunal] under this section as they apply to the proceedings under this section.]

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1.Substituted by Act 31 of 1988, Section 16, for section 111 (w.e.f. 31-5-1991).

2.Substituted by Act 11 of 2003, Section 15, for "Company Law Board" .

3.Substituted by Act 53 of 2000, Section 45, for "one thousand rupees" (w.e.f. 13-12-2000).

4.Substituted by Act 53 of 2000, Section 45, for "fifty rupees" (w.e.f. 13-12-2000).

5.Inserted by Act 22 of 1996, Section 30 and Schedule (w.r.e.f. 20-9-1995).

6. Inserted by Act 22 of 1996, Section 30 and Schedule (w.r.e.f. 20-9-1995).

7. Inserted by Act 8 of 1997, Section 10 (w.r.e.f. 15-1-1997).

8. Substituted by Act 11 of 2003, Section 15, for "Company Law Board".

9. Substituted by Act 8 of 1997, Section 10, for sub-section (3) (w.r.e.f. 15-1-1997).

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(1) The certification by a company of any instrument of transfer of shares in, or debentures of, the company, shall be taken as a representation by the company to any person acting on the faith of the certification that there have been produced to the company such documents as on the face of them show a prima facie title to the shares or debentures in the transferor named in the instrument of transfer, but not as a representation that the transferor has any title to the shares or debentures.

(2) Where any person acts on the faith of an erroneous certification made by a company negligently, the company shall be under the same liability to him as if the certification had been made fraudulently.

(3) For the purposes of this section-

(a) An instrument of transfer shall be deemed to be certificated if it bears the words "certificate lodged" or words to the like effect;

(b) The certification of an instrument of transfer shall be deemed to be made by a company, if -

(i) The person issuing the certificated instrument is a person authorised to issue such instruments of transfer on the company's behalf; and

(ii) The certification is signed by any officer or servant of the company or any other person, authorised to certificate transfers on the company's behalf, or if a body corporate has been so authorised, by any officer or servant of that body corporate;

(c) A certification shall be deemed to be signed by any person, if it purports to be authenticated by his signature unless it is shown that the signature was placed there neither by himself nor by any person authorised to use the signature for the purpose of certificating transfers on the company's behalf.



Issue of certificate of shares, etc.

1*[(1) Every company, unless prohibited by any provision of law or of any order of any court, tribunal or other authority, shall, within three months after the allotment of any of its shares, debentures or debenture stock, and within two months after the application for the registration of the transfer of any such shares, debentures or debenture stock, deliver, in accordance with the procedure laid down in section 53, the certificates of all shares, debentures and certificates of debenture stocks allotted or transferred:-

Provided that the2*[Central Government] may, on an application being made to it in the behalf by the company, extend any of the periods within which the certificates of all debentures and debenture stocks allotted or transferred shall be delivered under this sub-section, to a further period not exceeding nine months, if it is satisfied that it is not possible for the company to deliver such certificates within the said periods.]

The expression "transfer", for the purposes of this sub-section, means a transfer duly stamped and otherwise valid, and does not include any transfer which the company is for any reason entitled to refuse to register and does not register.

(2) If default is made in complying with sub-section (1), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to3*[five thousand rupees] for every day during which the default continues.

(3) If any company on which a notice has been served requiring it to make good any default in complying with the provisions of sub-section (1), fails to make good the default within ten days after the service of the notice, the4*[Central Government] may, on the application of the person entitled to have the certificates or the debentures delivered to him, make an order directing the company and any officer of the company to make good the default within such time as may be specified in the order; and any such order may provide that all costs of and incidental to the application shall be borne by the company or by any officer of the company responsible for the default.

5*[(4) Notwithstanding anything contained in sub-section (1), where the securities are dealt with in a depository, the company shall intimate the details of allotment of securities to depository immediately on allotment of such securities.]

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1. Substituted by Act 31 of 1988, section 17, for the opening portion (w.e.f. 15-6-1988).

2. Substituted by Act 11 of 2003, section 16, for "Company Law Board".
 
3. Substituted by Act 53 of 2000, section 46, for "five hundred rupees" (w.e.f. 13-12-2000).

4. Substituted by Act 31 of 1988, section 17, for "Court" (w.e.f. 31-5-1991) and again substituted by Act 11 of 2003, section 16, for "Company Law Board".

5. Inserted by Act 22 of 1996, Section 30 and Schedule (w.e.f. 20-9-1995).

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(1) A public company limited by shares, if so authorised by its articles, may, with the previous approval of the Central Government with respect to any fully paid-up shares, issue under its common seal a warrant stating that the bearer of the warrant is entitled to the shares therein specified, and may provide, by coupons or otherwise, for the payment of the future dividends on the shares specified in the warrant.

(2) The warrant aforesaid is in this Act referred to as a "share warrant".

(3) A share warrant shall entitle the bearer thereof to the shares therein specified, and the shares may be transferred by delivery of the warrant.



(1) On the issue of a share warrant, the company shall strike out of its register of members the name of the member then entered therein as holding the shares specified in the warrant as if he had ceased to be a member, and shall enter in that register the following particulars, namely:-

(a) The fact of the issue of the warrant;

(b) A statement of the shares specified in the warrant,distinguishing each share by its number; and

(c) The date of the issue of the warrant.

(2) The bearer of a share warrant shall, subject to the articles of the company, be entitled, on surrendering the warrant for cancellation and paying such fee to the company as me Board of directors may from time to time determine, to have his name entered as a member in the register of members.

(3) The company shall be responsible, for any loss incurred by any person by reason of the company entering in its register of members the name of a bearer of a share warrant in respect of the shares therein specified, without the warrant being surrendered and cancelled.

(4) Until the warrant is surrendered, the particulars specified in sub-section (1) shall be deemed to be the particulars required by this Act to be entered in the register of members; and, on the surrender, the date of the surrender shall be entered in that register.

(5) Subject to the provisions of this Act, the bearer of a share warrant may, if the articles of the company so provide, be deemed to be a member of the company within the meaning of this Act, for any purposes defined in the articles.

(6) If default is made in complying with any of the requirements of this section, the company and every officer of the company who is in default, shall be punishable with fine which may extend to1*[five hundred rupees] for every day during which the default continues.

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1.Substituted by Act 53 of 2000, section 47, for "fifty rupees" (w.e.f. 13-12-2000).

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If any person deceitfully personates an owner of any share or interest in a company, or of any share warrant or coupon issued in pursuance of this Act, and thereby obtains or attempts to obtain any such share or interest or any such share warrant or coupon, or receives or attempts to receive any money due to any such owner, he shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to fine.
Last updated on August, 2016

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