# Refusal of Registration of Transfer and Appeal Against Refusal

## 1. Private Company: Refusal of Transfer/Transmission

### Notice Requirement

If a private company refuses to register the transfer or transmission of any securities or interest:

It must send notice of refusal to both the transferor and transferee within 30 days of delivery of the transfer instrument or transmission intimation.

### Right of Appeal to Tribunal

The transferee may appeal to NCLT:

Within 30 days of receiving the refusal notice; OR
If no notice is sent, within 60 days of delivery of the transfer instrument/intimation.

## 2. Public Company: Refusal of Transfer

### Free Transferability Rule

Securities of a public company are freely transferable, subject to any contract or arrangement enforceable under law.

### Right of Appeal to NCLT

If a public company refuses to register the transfer within 30 days of delivery, the transferee may appeal:

Within 60 days of refusal; OR
If no refusal notice, within 90 days of delivery of transfer instrument/intimation.

## 3. Powers of NCLT (Tribunal)

After hearing both parties, the Tribunal may:

Order the transfer/transmission to be registered within 10 days;
Direct rectification and order payment of damages to the aggrieved party.

## 4. Penalty for Non-Compliance with Tribunal's Order

Component	Range
Imprisonment	1 to 3 years
Fine	₹1,00,000 to ₹5,00,000

## Time Limits Summary Table

Scenario	Time Limit
Private Co. notice to transferor/transferee	30 days from instrument delivery
Private Co. appeal to NCLT (if notice received)	30 days from notice
Private Co. appeal to NCLT (if no notice)	60 days from delivery
Public Co. appeal to NCLT (if refusal)	60 days from refusal
Public Co. appeal to NCLT (if no notice)	90 days from delivery

Worked example

### Example 1

Example 1 (Private Company): A private company received a duly executed transfer deed on 1st April. It did not send any notice of refusal. By when can the transferee appeal to NCLT?

Solution: Since no refusal notice was sent, the transferee may appeal within 60 days from delivery of the instrument, i.e., by 31st May.

### Example 2

Example 2 (Public Company): A public listed company refused to register a transfer and sent refusal notice on 1st June. By when can transferee appeal?

Solution: Within 60 days from the date of refusal, i.e., by 31st July.

⚠️ Common exam mistakes

Confusing the appeal periods of private vs public companies - private allows 30/60 days, public allows 60/90 days.
Assuming public company securities cannot be refused for transfer - they can, subject to contract/arrangement.
Forgetting that the appeal right is for the transferee, not the transferor.
Confusing the 10-day Tribunal registration order with the appeal time limits.

Bare-Act text Section 58 · Companies Act, 2013 · click to expand

Section 58 deals with refusal of registration and appeal against refusal under the Companies Act, 2013.

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