TaxTMI 
TaxTMI 
Imposition of restrictions upon shares and debentures and prohibition of transfer of shares or debentures in certain cases.
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....f the opinion that such facts cannot be found out unless the restrictions specified in sub-section (2) are imposed, the ^[6][Tribunal] may, by order, direct that the shares shall be subject to the restrictions imposed by sub-section (2) for such period not exceeding three years as may be specified in the order.^[7] (2) So long as any shares are directed to be subject to the restrictions imposed by this sub-section^___ (a) any transfer of those shares shall be void; (b) where those shares are to be issued, they shall not be issued; and any issue thereof or any transfer of the right to be issued therewith, shall be void; (c) no voting righ....
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....12][Tribunal] is of the opinion that any such change would be prejudicial to the public interest, the ^[13][Tribunal] may, by order, direct that any transfer of shares in the company during such period not exceeding three years as may be specified in the order, shall be void.] (5) The ^[14][Tribunal] may, by order at any time, vary or rescind any order made by it under sub-section (1) or sub-section (3) or sub-section (4). ^[15][(6) * * *(7) * * *]. (8) Any order made by the ^[16][Tribunal] under sub-section (5) shall be served on the company within fourteen days of the making of the order. (9) Any person who^____ (a) exercises or purports to exercise any right to dispose of any shares or of any....
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.... (11) A prosecution shall not be instituted under this section except by, or with the consent of, the Central Government. (12) This section shall apply in relation to debentures as it applies in relation to shares.] ------------------------------------ Notes:- [1] Substituted by the Companies (Amendment) Act, 1960, Act 65 of 1960, section 80 for section 250. [2] Substituted by the Companies (Amendment) Act, 1988, section 43, w.e.f. 31-5-1991, for the words "Where it appears to the Central Government, whether in connection with any investigation under section 247, 248 or 249 or otherwise". [3] Substituted for "Company Law Board" by the Companies (Second Amendment) Act, 2002, w.e.f. a date yet to be notif....
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....t may, by order, direct that (i) the voting rights in respect of those shares shall not be exercisable for such period not exceeding three years as may be specified in the order; (ii) no resolution passed or action taken to effect a change in the composition of the Board of directors or of, or in the constitution of, the managing agent before the date of the order shall have effect unless confirmed by the Central Government. (4) Where the Central Government has reasonable ground to believe that a transfer of shares in a company is likely to take place whereby a change^___ (a) in the composition of the Board ....
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.... Government" by the Companies (Amendment) Act, 1988, w.e.f. 31-5-1991. [13] Substituted for "Company Law Board" by the Companies (Second Amendment) Act, 2002, w.e.f. a date yet to be notified. Earlier the quoted words were substituted for "Central Government" by the Companies (Amendment) Act, 1988, w.e.f. 31-5-1991. [14] Substituted for "Company Law Board" by the Companies (Second Amendment) Act, 2002, w.e.f. a date yet to be notified. Earlier the quoted words were substituted for "Central Government" by the Companies (Amendment) Act, 1988, w.e.f. 31-5-1991. [15] Omitted by the Companies (Amendment) Act, 1988, section 43, w.e.f. 31-5-1991. Prior to the omission sub-sections (6) and (7) read as under: "(6) Where the Central Gover....