Impleadment in industrial reference upheld where shareholding dispute remained pending and repeal rendered the writ infructuous.

An impleadment order in an industrial reference was upheld because the shareholding dispute was already pending before the civil court and had not been finally decided; the rehabilitative forum was therefore not to determine that controversy on merits, and allowing participation was treated as a prudent procedural step. The writ challenge also failed because, after repeal of the Sick Industrial Companies framework, the proceeding under that regime no longer survived and the petition became infructuous. The challenge to the impugned order thus came to an end, leaving other remedies open in law.

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Issues: (i) Whether the order impleading the respondent in the industrial reference called for interference under Article 226 of the Constitution of India; (ii) Whether the writ petition survived after the repeal of the Sick Industrial Companies (Special Provisions) Act regime.

Issue (i): Whether the order impleading the respondent in the industrial reference called for interference under Article 226 of the Constitution of India.

Analysis: The dispute regarding the respondent's shareholding was already pending adjudication before the civil court and had not been finally decided. In that situation, it was held that the Board for Industrial and Financial Reconstruction and the Appellate Authority for Industrial and Financial Reconstruction were not the fora to determine the shareholding controversy on merits. The impugned impleadment order was treated as a prudent and equitable procedural course, since allowing participation would not cause grave prejudice if the shareholding dispute ultimately went against the respondent, whereas exclusion could prejudice the respondent if the dispute was later decided in its favour.

Conclusion: No interference was warranted with the impleadment order.

Issue (ii): Whether the writ petition survived after the repeal of the Sick Industrial Companies (Special Provisions) Act regime.

Analysis: With the enforcement of the repeal legislation, the proceedings under the earlier sick industrial company framework no longer survived. On that basis, the challenge to the impugned order ceased to have practical effect, and the petition was treated as having become infructuous.

Conclusion: The writ petition had become infructuous.

Final Conclusion: The challenge to the impugned order failed, and the proceeding was brought to an end without examination of the shareholding dispute on merits, leaving other remedies open in law.

Ratio Decidendi: Where the substantive dispute is pending before another competent forum, the rehabilitative authority should not decide that dispute on merits, and a challenge to an order loses efficacy once the statutory regime governing the proceeding has been repealed.

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