Company Law Board. As per Sec. III as

amended by the Depositories Act 1996, if refusal is above the provisions of the Articles, the transferor or transferee.may prefer an appeal to the Company

Law Board against the refusal 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 was delivered to the company. The appeal shall be made by a petition in writing and shan be

accompanied by the prescribed fee.

.After receiving the petition, the Company Law Board shall issue notices to the company, the tmnsferor and the transferee in order to provide them an

opportunitY to make their representation. Considering the whole case, if the refusal does not seem to be justified, the company Law Board will issue an

order to the company t9 register the transfer within 10 days of the receipt of the order. The Company Law Board shall also give such consequential order

as to make the payment of dividend or the allotment of bonus or right shares as it thinks fit and just.

Fine [Sec. 111 (9)1. If default is made in giving effect to the orders of the Company Law Board? the company and every defaulting officer of the company

shall be liable to a time extending to Rs. 10,000 with a further fine extending to Rs. 1,000 per day during which the default continues.

The provisions of Sec. III apply to transfer of debentures or transmission of shares and debentures.

(ii) Appeal to the court. The decision of the directors cannot be challenged so long as the directors act within the scope of the Articles. If the decision is

agc:inst the Articles and not in good faith for the benefit of the company, the trar.sferee may appeal to the court and if the court thinks fit, it may set aside

the decision ofthe directors and orderfor the registration of the transteree’s name as a member of the company. [Bajaj Auto Ltd. Vs. N.K. Firodia & Ailother]

Damages. In addition to setting aside the decision of the directors, the transferee will also be entitled for the damages which shall be equal to the

difference in the market price of the shares on the date of refusal