Remedies Against Refusal to Register Share Transfer
When a private or public company refuses to register the transfer of shares, various remedies are available to the aggrieved party. These remedies can be pursued through legal channels or alternative dispute resolution methods.
1. Legal Action for Specific Performance
- The aggrieved party can file a lawsuit seeking an order for specific performance, compelling the company to register the transfer of shares as per the terms agreed upon in the share transfer agreement.
2. Injunctions
- An injunction can be sought to prevent the company from refusing to register the transfer. This legal remedy ensures that the company fulfills its obligations under company law and the articles of association.
3. Damages for Losses
- If the refusal to register results in financial losses, the aggrieved party may claim damages. This involves proving that the refusal caused quantifiable harm, leading to compensation for the losses incurred.
4. Complaint to Regulatory Authorities
- The affected shareholder can lodge a complaint with the relevant regulatory body, such as the Securities and Exchange Board of India (SEBI) for public companies. This can lead to an investigation and potential penalties for the company.
5. Shareholder Rights Enforcement
- Shareholders may invoke their rights under the company’s articles of association or relevant laws, demanding adherence to the proper procedures for share transfer registrations.
6. Mediation and Arbitration
- Alternative dispute resolution mechanisms like mediation or arbitration can be pursued, facilitating a more amicable resolution without resorting to lengthy litigation.
Conclusion
In summary, when a company refuses to register the transfer of shares, aggrieved parties have several remedies, including legal action for specific performance, seeking injunctions, claiming damages, filing complaints with regulatory authorities, enforcing shareholder rights, and exploring mediation or arbitration options.