An employee of a company purchased certain shares of his company through a member of a stock exchange and lodged with the company an application for transfer of shares in his (employee's) name. The company refused to exe

The securities or other interest of any member in a public company are freely transferable. According to Section 58(4) of the Companies Act, 2013, if a public company without sufficient cause refuses to register the transfer of securities within a period of 30 days from the date on which the instrument of transfer is delivered to the company, the transferee may, within a period of 60 days of such refusal or where no intimation has been received from the company, within 90 days of the delivery of the instrument of transfer appeal to the Tribunal. Refusal to register share transfer on suspicion that the employee if admitted as a member will attend general meetings of the company and may create nuisance by raising irrelevant issues and also obtain access to the records to the company as a shareholder is not a valid reason. (Appeal to the CLB No. 27, of 1975 dated 17th August, 1976, Shri Nirmal Kumar v. Jaipur Metal and Electrical Limited ). Since the company in question is a public company, refusal to register share transfer on suspicion that the employee, in the given case, if admitted as a member will attend general meetings of the company and may create nuisance in general meeting and seek access to the records to the company as a shareholder is not a valid reason for refusal to register the transfer of shares. Hence: (i) taking into account the above, the refusal by the company to register the transfer shares in the name of the employee is not tenable. (ii) Employee in this case can go for appeal to the Tribunal against the company's refusal.