N. J. PANDYA, J. ( 1 ) ). This appeal deserves to be allowed Po for the simple reason that the learned members of the Company Law Board who dealt with the matter as Appeal No. 42 (111) CLBWR/90 have in my opinion not appreciated the difference between free transferability and refusal to entertain the request for splitting the share into different names. ( 2 ) ). The appellant before the Board i. e. the respondent herein had requested the appellant to entertain the application for transfer of one equity share each as detailed out in para 6 of the memo of appeal as a lot of 5 shares was purchased from the market and here also there is a history. ( 3 ) ). The shares originally belonged to one Gujarat Aerumatics Limited which merged so with the present appellant-Company. It was a case of reverse merger in the sense that a profit making Company bearing the name of the Appellant-Company had merged with the said Gujarat Aeromatics Ltd. and in the process the merging Company became the merged Company i. e. Gujarat Aeromatics Limited and the name continued to be that of the merged Company i. e. Atul Products Limited by changing the name of said Gujarat Aeromatics Ltd. as part of Scheme of Merger and Amalgamation. ( 4 ) ). As said Gujarat Aeromatics Ltd. was a loss making Company as a part of the Scheme equity share capital came to be reduced in the ratio of 10 : 1 and accordingly if a shareholder holds 50 shares of that Company that would automatically be reduced to 5 shares of the merged Company. This lot of shares of the Gujarat Aeromatics Ltd. which was originally 50 shares of Gujarat Aeromatics Ltd. came to be dealt with by the respondent in the aforesaid manner with an added request for transferring one share each to 4 different names as set out in capital A B C and D of said para 6 running pages 6 and 7 of the appeal memo. Once these 4 shares were dealt with in this manner the remaining share was to be retained with the original owner i. e. Pushpaben S. Naik. ( 5 ) ). Once these 4 shares were dealt with in this manner the remaining share was to be retained with the original owner i. e. Pushpaben S. Naik. ( 5 ) ). In effect what was sought was splitting of unit of 5 shares which originally would have been a unit of 50 shares into 5 share certificates of 1 share in five different names. Had this request been allowed there would not have been a case in respect of the said shares and there would have been five different share certificates in the name of five different holders each having one shares in their name as set out in para 6. Ordinarily there nay not be any objection and this might happen in case of all or any of the Companies. ( 6 ) ). However in the instant case when the request was made the Appellantcompany by letter dated 5 addressed to the respondent had referred to Article 24 of the Articles of Association of the Company where it is provided that the Company would not split the shares for shares less than a marketable lot i. e. 50 shares. ( 7 ) ). In view of the aforesaid history the lot of 50 shares of the merging Company will have to be taken as 5 shares of the merged Company as per the ratio agreed upon and if the request is for splitting those five shares under one share certificate to five different share certificates of the share each and transfer it to five different individual names the Company can refuse it under Article 24 of the Articles of Association of the Company unless the splitting sought is for making a marketable lot. However so far as transferring the lot of five shares to the name suggested by the respondent is concerned at the bar a statement is made on behalf of the appellant-Company by L. A. Shri B. R. Shah that it is left to the choice of the respondent and if such a request is made the Company shall entertain it. ( 8 ) ). So far as the refusal is concerned it is for splitting the shares and not for transferring them to the names suggested by the respondent. ( 8 ) ). So far as the refusal is concerned it is for splitting the shares and not for transferring them to the names suggested by the respondent. ( 9 ) THE learned Members of the Company Law Board have referred to Section 22-A of the Securities Contract (Regulation) Act 1956 This Section is definitely required to be considered for cases like this. However this Section would be attracted provided there was a question of there being any hindrance of free transferability. The refusal is for splitting of the shares and not for transferring the same and in my opinion there is no hindrance to free transferability at all. The Company was ready to transfer those 5 shares and is still ready to transfer those five shares to a different name as suggested by the respondent as envisaged in respect of a public Company under the Company Law a compendium term which would include the Security Regulation also their requirements are taken care of. Assuming for the sake of argument that the said Section 22-A is required to be considered answer is to be found in clause (b) of Sub-section 3 of Section 22-A which reads as under : (b)that the transfer of the securities is in contravention of any law or rules made therein or any administrative instructions or conditions of listing agreement laid down in pursuance of such laws or rules. ( 10 ) THE respondent arguing the matter as party in person had taken me through Section 9 of the Companies Act Section 111 of the Companies Act and also to said Section 22-A of the said Regulation Act as also the standard listing agreement. He has accepted the position as found from the standard listing agreement that there might be a restriction with regard to the marketable unit of shares. This refers to the said concept of marketable lot for minimum number of shares to be dealt with in the market for sale and purchase which is a vital transaction so far as the transferability of lot of shares is concerned. This refers to the said concept of marketable lot for minimum number of shares to be dealt with in the market for sale and purchase which is a vital transaction so far as the transferability of lot of shares is concerned. ( 11 ) THE said Clause (b) of Section 22-A provides for ground for refusal of transfer and at the same time prohibits any other ground being praised for refusal to transfer and condition of listing agreement being one of them the Company can certainly invoke clause (b) of Sub-section 3 of Section 22 (A ). Assuming for the sake of argument that at the time of refusal which was conveyed on 5 this amended provision was not there in Section 22a of the said Regulation Act even then in view of the aforesaid distinction between not a refusal to transfer but refusing only to split the shares the Section would not be attracted. ( 12 ) NO doubt L. A. Shri B. R. Shah has drawn a distinction between word Law as used in clause (b) with reference to Article 13 of the Constitution of India but that being a larger question in my opinion when it is not required to be gone into in light of the aforesaid discussion I simply refer to it but do not deal with it. ( 13 ) THE net result is that the appeal succeeds. The Order of the Company Law Board is set aside. However as stated above it shall be open to the respondent herein to approach the Company within one month from today with a request to the Company to get the said lot of 5 shares transferred to the name or names as requested by the respondent. There shall be no order as o costs. .