Chapter IV - Share Capital and Debentures
Section 58
Section 58: refusal of registration and appeal
A private company that refuses to register a transfer or transmission must send reasoned notice within thirty days. Securities of a public company are freely transferable, and a refused transferee can appeal to the Tribunal.
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This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(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. (2) Without prejudice to sub-section (1), the securities or other interest of any member in a public company shall be freely transferable: Provided that any contract or arrangement between two or more persons in respect of transfer of securities shall be enforceable as a contract. (3) The transferee may appeal to the Tribunal against the refusal within a period of thirty days from the date of receipt of the notice or in case no notice has been sent by the company, within a period of sixty days 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 public company without sufficient cause refuses to register the transfer of securities within a period of thirty days from the date on which the instrument of transfer or the intimation of transmission, as the case may be, is delivered to the company, the transferee may, within a period of sixty days of such refusal or where no intimation has been received from the company, within ninety days of the delivery of the instrument of transfer or intimation of transmission, appeal to the Tribunal. (5) The Tribunal, while dealing with an appeal made under sub-section (3) or sub-section (4), may, after hearing the parties, either dismiss the appeal, 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 a period of 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) If a person contravenes the order of the Tribunal under this section, he shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.
Introduction
Section 58 gives transferees a route to the Tribunal. A private company may refuse registration under its articles or otherwise but must give reasons within thirty days. A public company that refuses without sufficient cause can face an appeal.
The Tribunal may dismiss the appeal, order registration within ten days, or order rectification of the register with damages. Contravening its order is punishable with imprisonment and fine.
Key takeaways
Private-company notice
Reasoned refusal notice within thirty days of delivery of the instrument or intimation.
Public-company transferability
Securities are freely transferable, though contracts between persons on transfer are enforceable as contracts.
Appeal periods
Thirty or sixty days for private-company refusals, and sixty or ninety days for public-company refusals.
Private company refusal
If a private company limited by shares refuses to register a transfer, or a transmission by operation of law, it must send notice of refusal with reasons within thirty days from delivery of the instrument or intimation. The notice goes to the transferor and transferee, or to the person who gave the intimation of transmission.
Public company transfers
Without prejudice to sub-section (1), the securities or other interest of any member in a public company are freely transferable. Any contract or arrangement between two or more persons on the transfer of securities is enforceable as a contract.
Appeal to the Tribunal
Against a refusal, the transferee may appeal within thirty days from receipt of the notice or, if no notice was sent, within sixty days from delivery of the instrument or intimation. If a public company refuses without sufficient cause to register a transfer within thirty days from delivery, the transferee may appeal within sixty days of the refusal or, where no intimation was received from the company, within ninety days of delivery.
Tribunal orders and consequences
After hearing the parties, the Tribunal may dismiss the appeal. It may instead direct registration, which the company must carry out within ten days of receiving the order, or direct rectification of the register and payment of any damages sustained by an aggrieved party. A person who contravenes the Tribunal’s order is punishable with imprisonment of one to three years and a fine of one lakh to five lakh rupees.
Practical preparation
Record the date of delivery of the instrument or intimation; for a private company, check the articles and send a reasoned notice within thirty days; for a public company, check for sufficient cause; transferees should diarise the applicable appeal deadline.
Commencement and amendment record
Section 58 came into force on 12 September 2013 under S.O. 2754(E) dated 12 September 2013. India Code’s consolidated text shows no amendment to this section, and the Companies (Amendment) Acts of 2015, 2017, 2019 and 2020 contain no amending instruction for it.
Practical checklist
Do
- Give specific reasons in any private-company refusal notice.
- Keep proof of the date the instrument or intimation was delivered.
Avoid
- Do not ignore a lodged transfer; the Act gives the transferee an appeal even where no notice is sent.
- Do not delay compliance with a Tribunal registration order beyond ten days.
Illustrative example
Hypothetical: silent public company
A transferee lodges a transfer with a public company and hears nothing.
Thirty days
Note whether the company registers the transfer within thirty days of delivery.
Appeal window
With no intimation from the company, the transferee may appeal within ninety days of delivery.
Relief
The Tribunal may direct registration within ten days or rectification with damages.
Outcome
- The transferee has a defined route to the Tribunal despite the company’s silence.
Glossary
- Free transferability
- The rule in section 58(2) that securities of a public company are freely transferable.
- Rectification of the register
- A Tribunal-directed correction of the register of members under section 58(5)(b).
Frequently asked questions
Can a private company refuse a share transfer?
It can refuse under its articles or otherwise, but it must send a reasoned notice within thirty days, and the transferee can appeal to the Tribunal.
What if the company sends no notice?
For a private-company refusal, the appeal period is sixty days from delivery. For a public company, it is ninety days from delivery where no intimation was received.
What can the Tribunal order?
Dismissal, registration within ten days of receipt of the order, or rectification of the register with damages.
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026