Refusal of Registration & Appeal to NCLT (Section 58)
# Refusal of Registration of Transfer (Section 58)
## Two Different Regimes
### Private Company
Board may refuse to register transfer in terms of the Articles of Association.
Power must be exercised bona fide and in the best interests of the company.
### Public Company
Shares/debentures and interest shall be FREELY TRANSFERABLE.
Board and depository have NO discretion to refuse, except on the ground of sufficient cause.
## Notice of Refusal — Common Rule
Within 30 days from the date on which the instrument of transfer was delivered to the company, the company shall send notice of refusal to:
Transferor, AND
Transferee (or person giving intimation of transmission),
Giving reasons for such refusal.
## Appeal to NCLT — Time Limits Differ
Particulars
Private Company
Public Company
Appeal period (if refusal notice received)
30 days from receipt of refusal notice
60 days from receipt of refusal notice
Appeal period (if no notice sent by company)
60 days from date instrument delivered
90 days from date instrument delivered
## Powers of NCLT on Appeal
After hearing the parties, the Tribunal may EITHER:
Option 1:Dismiss the appeal, OR
Option 2:
(a) Direct registration of transfer/transmission — company must comply within 10 days of receipt of order; OR
(b) Direct rectification of register AND direct company to pay damages, if any, sustained by aggrieved party.
## Memory Snapshot
```
Private Co. Public Co.
Notice by Co. 30 days 30 days
Appeal (with notice) 30 days 60 days
Appeal (no notice) 60 days 90 days
NCLT compliance 10 days 10 days
```
Worked example
### Example 1
Example 1 — Private Company: A private company refuses to register transfer on 10 July (instrument delivered 1 July). The refusal notice complies with the 30-day rule. The transferee must appeal to NCLT by 9 August (within 30 days of refusal notice).
### Example 2
Example 2 — Public Company (No Notice): Instrument of transfer of public co. shares delivered on 1 March. Company sends NO refusal notice. Transferee may appeal to NCLT within 90 days from 1 March, i.e., by 30 May.
### Example 3
Example 3 — NCLT Order: NCLT directs ABC Ltd. on 1 August to register a transfer. The company must comply by 11 August (within 10 days of receiving the order).
### Example 4
Example 4 — Bona Fide Refusal: A private company refuses transfer because the proposed transferee is a competitor — may be valid if Articles permit. But if refusal is to suppress dissenting voices, courts will hold it as not bona fide.
⚠️ Common exam mistakes
Treating private and public company timelines identically — they differ at every stage.
Forgetting that public companies have very LIMITED power to refuse (only on 'sufficient cause').
Ignoring the requirement that reasons must be given in the refusal notice.
Missing the 10-day NCLT compliance window — companies often miss this and face contempt.
Believing NCLT must register the transfer — it may also DISMISS the appeal.
Bare-Act text Section 58 · Companies Act, 2013 · click to expand
Section 58(1) — If a private company limited by shares 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 securities or interest of a member in the company, it shall within a period of thirty days 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 transferor and the transferee or to the person giving intimation of such transmission, as the case may be, giving reasons for such refusal. Section 58(2) — The securities or other interest of any member in a public company shall be freely transferable.