12.9.2 (Power of the Board of Directors to Refuse Registration of Transfer of Shares)

Where the Articles give power to the Board to refuse registration of a transfer of shares, such power must be exercised by a resolution of the Board. The Board may refuse to register the transfer as long as they are acting in the interests of the company, but if they exercise their discretion to refuse mala fide, i.e., they act oppressively, or corruptly, Company Law Board or the Court will interfere and order registration. The articles may, of course, be specific and empower the Board of directors to refuse to register transfers on certain specific ground. As per s.111, if a company refuses to register the transfer of shares, it shall, within 2 months from the date of lodging the instrument of transfer, send notice of refusal to the transferor or transferee giving reasons for such refusal. The Company Law Board, on appeal, may direct the registration of the transfer.