Bajaj Auto Limited vs.

Company Law Board [11] best explains the position of law as regards the
transferability of shares. The Court took the view that the real reason behind refusal to register is
to be enquired into. It also restricted the scope of judicial review to scrutiny of the exercise of
power by the Board of Directors. Heavy reliance was placed on Bajaj Auto Limited vs. N.K.
Firodia [12] in observing that the action of Directors must lie in the interests of the company.
The relevant excerpt from the judgment is as follows: This Court while examining the action of
the Board of Directors is not expected to exercise original appellate jurisdiction and sit in appeal
on question of fact. The judicial review while hearing in appeal from the decision of the
Company Law Board would be limited to see whether there was a bona fide exercise of power
by the Board of Directors while refusing to register the transfer of shares"