A company shall not register a transfer of securities of the company, or the interest of a member in the company in the case of a company having no share capital, other than the transfer between persons both of whose names are entered as holders of beneficial interest in the records of a depository, unless a proper instrument of transfer

(1) A company shall not register a transfer of securities of the company, or the interest of a member in the company in the case of a company having no share capital, other than the transfer between persons both of whose names are entered as holders of beneficial interest in the records of a depository, unless a proper instrument of transfer, in such form as may be prescribed, duly stamped, dated and executed by or on behalf of the transferor and the transferee and specifying the name, address and occupation, if any, of the transferee has been delivered to the company by the transferor or the transferee within a period of sixty days from the date of execution, along with the certificate relating to the securities, or if no such certificate is in existence, along with the letter of allotment of securities: Provided that where the instrument of transfer has been lost or the instrument of transfer has not been delivered within the prescribed period, the company may register the transfer on such terms as to indemnity as the Board may think fit.

> FORGED TRANSFERS IN SHARE --An instrument on which the signature of the transferor is forged is called forged transfer. It is a null transfer and does not confer any title. It is so because in case of forgery there is not merely an absence of free consent but there is no consent at all. --Hence, this transfer will never confer an ownership upon the transferee, however important the transaction may appear it. If the company registers any forged transfer, the real owner can apply to the company for the rectification and get his name placed back in the register.

(1) A company shall not register a transfer of securities of the company, or the interest of a member in the company in the case of a company having no share capital, other than the transfer between persons both of whose names are entered as holders of beneficial interest in the records of a depository, unless a proper instrument of transfer, in such form as may be prescribed, duly stamped, dated and executed by or on behalf of the transferor and the transferee and specifying the name, address and occupation, if any, of the transferee has been delivered to the company by the transferor or the transferee within a period of sixty days from the date of execution, along with the certificate relating to the securities, or if no such certificate is in existence, along with the letter of allotment of securities: Provided that where the instrument of transfer has been lost or the instrument of transfer has not been delivered within the prescribed period, the company may register the transfer on such terms as to indemnity as the Board may think fit. (2) Nothing in sub-section (1) shall prejudice the power of the company to register, on receipt of an intimation of transmission of any right to securities by operation of law from any person to whom such right has been transmitted. (3) Where an application is made by the transferor alone and relates to partly paid shares, the transfer shall not be registered, unless the company gives the notice of the application, in such manner as may be prescribed, to the transferee and the transferee gives no objection to the transfer within two weeks from the receipt of notice. (4) Every company shall, unless prohibited by any provision of law or any order of Court, Tribunal or other authority, deliver the certificates of all securities allotted, transferred or transmitted— (a) within a period of two months from the date of incorporation, in the case of subscribers to the memorandum; (b) within a period of two months from the date of allotment, in the case of any allotment of any of its shares; (c) within a period of one month from the date of receipt by the company of the instrument of transfer under sub-section (1) or, as the case may be, of the intimation of transmission under sub-section (2), in the case of a transfer or transmission of securities; (d) within a period of six months from the date of allotment in the case of any allotment of debenture: Provided that where the securities are dealt with in a depository, the company shall intimate the details of allotment of securities to depository immediately on allotment of such securities. (5) The transfer of any security or other interest of a deceased person in a company made by his legal representative shall, even if the legal representative is not a holder thereof, be valid as if he had been the holder at the time of the execution of the instrument of transfer. (6) Where any default is made in complying with the provisions of sub-sections (1) to (5), the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees. (7) Without prejudice to any liability under the Depositories Act, 1996, where any depository or depository participant, with an intention to defraud a person, has transferred shares, it shall be liable under section 447.

We all know the settled law that the Private Company can have restrictions in its Articles restricting the right of its shareholders in transferring the shares. There can not be any such restriction in the articles of Public Companies as it is expressly prohibited under law. The Private Company can refuse to register the transfer or transmission of shares on certain grounds and the scope of refusal of registration of transfer or acceptance of transfer are very limited in Public Companies as everybody knows. Share transfers – allegations of fraud, forgery and fabrication of documents etc.: But, what happens if the majority in a Company or the Company fabricates certain documents and shows as if certain shares are transferred illegally. The scope for fabrication of documents and committal of fraud has become very less with the introduction of e-filing as it will be very difficult for the companies to explain before the competent forum as to why it could not comply with the stipulation contained in the Act as to the filing of forms with the authorities like Registrar of Companies (ROC). Before introduction of MCA scheme or e-filing mechanism, the issue of non-filing of required forms with the Registrar of Companies has not been considered so serious practically. The listed Public Companies are supposed to adhere to the conditions of listing agreement and plethora of SEBI regulations and as such it is very rare to see violation of the provisions of the Act or the corporate regulations in listed Public Companies. Despite making many things easier with the MCA scheme or e-filing mechanism, still, many Private Limited Companies or the closed held Public Companies are not strictly adhering to the provisions of the Act and it is very difficult to conclude that an act has not happened just because the respective e-form is not filed with the Registrar of Companies (ROC). Many contend that the filing of e-forms or the required forms with the authorities like the Registrar of Companies (ROC) is a procedural exercise and not a violation of substantial law. Despite having the provisions and regulations very clear, still, we have not reached a stage where a particular action of the Company can be set-aside or declared illegal on the sole ground that the respective form or e-form is not filed with the Registrar of Companies (ROC). Many companies still do not bother about filing the forms with the Registrar of Companies (ROC) as required and I have seen many such cases practically. There can be justification in not filing the required forms with the Registrar of Companies when the company is literally closed its transactions though not wound-up or chosen to go for voluntary winding-up or getting the name struck-of as provided. But, it is interesting to note that even the companies and especially private and closely held Public Companies do neglect the compliance of the provisions of the Act and we are seeing all these cases

One of the most delicate and important jobs in the process of registration of transfer of shares is matching the signature(s) of transferor(s) on the instruments of transfers that are lodged with companies. It is quite common that the during transit by post, envelopes containing share transfer deeds and shares certificates are pilfered or are removed, the original instruments of share transfer are retained, signature(s) of transferor(s) on a new instrument of transfer are forged and the shares are sold to unsuspecting persons along with the corresponding share certificates. The purchasers fill in their own names in the instruments of share transfers, as transferees of the shares and lodge the forged instruments with the company for registration of transfer of the shares in their names. Therefore, the company secretaries and/or those who are entrusted with the responsibility of matching signatures of the transferor(s) on the share transfer forms with those that are available in the records of companies, have to be very careful in checking the signature(s) of transferor(s) on the share transfer deeds. Even on the slightest doubt they should not entertain the documents and immediately send a notice to the transferor(s) notifying the fact of receipt of the transfer documents with the name(s) and other given details of the transferee(s) and requesting them to intimate to the company within a stipulated period of time whether the shares have in fact been sold to the said transferee(s) and also clearly saying that if the company does not hear to the contrary from the transferor(s) within the stipulated period of time, the transfer of shares would be registered in the names of the said transferees. A copy of such a notice should also be endorsed to the regional stock exchange, where the securities of the company are listed, for its information and record. Thanks

Dear, your query is that WHAT ARE FORGED TRANSFERS IN SHARE answer of your query is that An instrument on which the signature of the transferor is forged is called forged transfer. It is a null transfer and does not confer any title. It is so because in case of forgery there is not merely an absence of free consent but there is no consent at all. Hence, this transfer will never confer an ownership upon the transferee, however important the transaction may appear it. If the company registers any forged transfer, the real owner can apply to the company for the rectification and get his name placed back in the register. Thanks & Regards,