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1994 (2) TMI 231 - SC - Companies LawTransfer of shares - Power to refuse registration and appeal against refusal - Heirs of deceased shareholders of respondent-company filed a petition for rectification of register of members by deleting name of deceased shareholder and substituting their names therein -On 21-9-1977 existing articles of association were replaced by a new set wherein new articles were introduced conferring power on company to reject any application for transfer or transmission without assigning any reason in that behalf - On 21-8-1984 appellants received heirship certificate - On 21-11-1984 appellants forwarded a true copy of heirship certificate and requested respondent to do needful - But respondent refused registration to appellants in exercise of powers conferred under articles of association - Appellants submitted that upon failure of Board of Directors to exercise right of refusal within period of two months, they were entitled to registration of shares in their names - Whether right of refusal of a company to register transfer of or transmission by operation of law of right to any share comes to an end after expiry of a period of two months and an absolute right is created in favour of transferee - Held, no - Whether in view of established fact that there was animosity between parties, respondent's decision of refusal to register shares in appellants' names was a proper and commercial decision - Held, yes
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