108. Transfer not
to be registered except on production of instrument of transfer.—(1)
A company shall not register a transfer of shares in, or debentures
of, the company, unless a proper instrument of transfer duly
stamped and executed by or on behalf of the transferor and
by or on behalf of the transferee and specifying the name,
address and occupation, if any, of the transferee, has been
delivered to the company along with the certificate relating
to the shares or debentures or if no such certificate is in
existence, along with the letter of allotment of the shares
or debentures:
Provided that where, on an application in writing made to
the company by the transferee and bearing the stamp required
for an instrument of transfer, it is proved to the satisfaction
of the Board of directors that the instrument of transfer
signed by or on behalf of the transferor and by or on behalf
of the transferee has been lost, the company may register
the transfer on such terms as to indemnity as the Board may
think fit:
Provided further that nothing to this section shall prejudice
any power of the company to register as shareholder or debenture-holder
any person to whom the right to any shares in, or debentures
of, the company has been transmitted by operation of law.
(l A) Every instrument of transfer of shares shall be in
such form as may be prescribed, and—
(a) every such form shall, before it is signed by or on behalf
of the transferor and before any entry is made therein, be
presented to the prescribed authority, being a person already
in the service of the Government, who shall stamp or otherwise
endorse thereon the date on which it is so presented, and
(b) every instrument of transfer in the prescribed form with
the date of such presentation stamped or otherwise endorsed
thereon shall, after it is executed by or on behalf of the
transferor and the transferee and completed in all other respects,
be delivered to the company,—
(i) in the case of shares dealt in or quoted on a recognised
stock exchange, at any time before the date on which the register
of members is closed, in accordance with law, for the first
time after the date of the presentation of the prescribed
form to the prescribed authority under clause (a) or within
twelve months from the date of such presentation, whichever
is later;
(ii) in any other case, within two months from the date of
such presentation.
(1B) Notwithstanding anything contained in sub-section (1A),
an instrument of transfer of shares, executed before the commencement
of section 13 of the Companies (Amendment) Act, 1965 (31 of
1965), or executed after such commencement in a form other
than the prescribed form, shall be accepted by a company,—
(a) in the case of shares dealt in or quoted on a recognised
stock exchange, at any time not later than the expiry of six
months from such commencement or the date on which the register
of members is closed, in accordance with law, for the first
time after such commencement, whichever is later;
(b) in any other case, at any time not later than the expiry
of six months from such commencement.
(1C) Nothing contained in sub-sections (1A) and (1B) shall
apply to—
(A) any share—
(i) which is held by a company in any other body corporate
in the name of a director or nominee in pursuance of sub-section
(2), or as the case may be, sub-section (3), of section 49,
or
(ii) which is held by a corporation, owned or controlled
by the Central Government or a State Government, in any other
body corporate in the name of a director or nominee, or
(iii) in respect of which a declaration has been made to
the Public Trustee under section 153B, if—
(1) the company or corporation, as the case may be, stamps
or otherwise endorses, on the form of transfer in respect
of such share, the date on which it decides that such share
shall not be held in the name of the said director or nominee
or, as the case may be, in the case of any share in respect
of which any such declaration has been made to the Public
Trustee, the Public Trustee stamps or otherwise endorses,
on the form of transfer in respect of such share under his
seal the date on which the form is presented to him, and
(2) the instrument of transfer in such form duly completed
in all respects, is delivered to the—
(a) body corporate in whose share such company or corporation
has made investment in the name of its director or nominee,
or
(b) company in which such share is held in trust, within
two months of the date so stamped or otherwise enforced; or
(B) any share deposited by any person with—
(i) the State Bank of India, or
(ii) any scheduled bank, or
(iii) any banking company (other than a scheduled bank) or
financial institution approved by the Central Government by
notification in the Official Gazette (and any such approval
may be accorded so as to be retrospective to any date not
earlier than the 1st day of April, 1966), or
(iv) the Central Government or a State Government or any
corporation owned or controlled by the Central Government
or a State Government,
by way of security for the repayment of any loan or advance
to, or for the performance of any obligation undertaken by,
such person, if—
(1) the bank, institution, Government or corporation, as
the case may be, stamps or otherwise endorses on the form
of transfer of such share—
(a) the date on which such share is returned by it to the
depositor, or
(b) in the case of failure on the part of the depositor to
repay the loan or advance or to perform the obligation, the
date on which such share is released for sale by such bank,
institution, Government or corporation, as the case may be,
or
(c) where the bank, institution, Government or corporation,
as the case may be, intends to get such share registered in
its own name, the date on which the instrument of transfer
relating to such share is executed by it; and
(2) the instrument of transfer in such form, duly completed
in all respects, is delivered to the company within two months
from the date so stamped or endorsed.
Explanation .—Where any investment by a company or
a corporation in the name of its director or nominee referred
to in clause (A) (i) or clause (A) (ii), or any declaration
referred to in clause (A) (iii), or any deposit referred to
in clause (B), of this sub-section is made after the expiry
of the period or date mentioned in clause (a) of sub-section
(1B) or after the expiry of the period mentioned in clause
(b) of that sub-section, as the case may be, the form of transfer,
in respect of the share which is the subject of such investment,
declaration or deposit, means the prescribed form; or
(C) any share which is held in any company by the Central
Government or a State Government in the name of its nominee,
except that every instrument of transfer which is executed
on or after the 1st day of October, 1966, in respect of any
such share shall be in the prescribed form.
(1D) Notwithstanding anything in sub-section (1A) or sub-section
(1B) or sub-section (1C), where in the opinion of the Central
Government it is necessary so to do to avoid hardship in any
case, that Government may on an application made to it in
that behalf, extend the periods mentioned in those sub-sections
by such further time as it may deem fit whether such application
is made before or after the expiry of the period aforesaid;
and the number of extensions granted hereunder and the period
of each such extension shall be shown in the annual report
laid before the Houses of Parliament under section 638.
(2) In the case of a company having no share capital, sub-section
(1) shall apply as if the references therein to shares were
references instead to the interest of the member in the company.
(3) Nothing contained in this section shall apply to transfer
of security effected by the transferor and the transferee
both of whom are entered as beneficial in the records of a
depository.
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