2021 (3) TMI 817 - Tri - Companies Law

Shareholder impleaded in Company Petition for fair adjudication under Companies Act, 2013

The Tribunal allowed the impleadment of the shareholder as Additional Respondent No.23 in the Company Petition, citing the need to hear all interested ... Seeking to implead applicant as Additional Respondent No.23 in the Company Petition No. 21/KOB/2020 and all related Interlocutory Applications on the files of this Tribunal - HELD THAT:- Section 424 of the Companies Act, 2013 stated that the Tribunal is guided by the principles of natural justice, which underlines the need to hear all parties interested and concerned in the issue before the Tribunal and may be effected by any order passed by the Tribunal. Hence the persons who are interested in the proceedings have necessarily to be impleaded to the proceedings. The prerogative to hear or not to hear a party depends on the court concluding as to whether he is proper person to be heard and that if the court is of the opinion that one should be heard for a proper adjudication in the issue before it, definitely he should be heard for which he should be made a party to such proceedings. The impleadment of the applicant herein as one of the respondents will not be likely to be effected in any manner the interests of the petitioners in the Company Petition, and that the contention of the petitioners in the CP/respondents 1 to 8 herein that the applicant herein is not a “necessary party” cannot be accepted. Application is allowed - the applicant herein Mr.C.Mohanan Pillai residing at Krishna Priya, Podiyattuvila PO, Valakom, Kollam-691532 is impleaded as Additional Respondent No.23 in the Company Petition - However, the prayer to implead him in all related Interlocutory Applications is rejected, for the reason that such a prayer cannot be accepted by this Tribunal, because a person seeking impleadment may be impleaded in a Petition in which he is sought to be impleaded and not any other petition. Issues: Impleadment of shareholder as a necessary party in a Company PetitionAnalysis:1. Impleadment Application by Shareholder: The Company Appeal was filed by a shareholder seeking to be impleaded as an Additional Respondent in a Company Petition against Respondents 9 to 30. The shareholder argued that as someone associated with the company's project, any order passed in the Company Petition would affect his interests as a shareholder. He emphasized the importance of his involvement for a proper adjudication in the matter.2. Opposition by Respondents 1 to 8: Respondents 1 to 8 opposed the shareholder's impleadment, stating that he only held a small percentage of shares and was not involved in the management affairs of the company. They cited legal precedents to argue that a necessary party in cases of oppression and mismanagement should be someone in the management of the company, which the shareholder was not.3. Rejoinder by the Shareholder: In response, the shareholder reiterated his stance, highlighting that the allegations in the Company Petition involved mismanagement and diversion of funds, affecting all shareholders, including himself. He distinguished the legal precedent cited by the respondents, stating it was not applicable to the current situation.4. Tribunal's Decision: After hearing arguments from both sides and reviewing relevant documents, the Tribunal considered the principles of natural justice under Section 424 of the Companies Act, 2013. It emphasized the need to hear all interested parties for a fair adjudication. The Tribunal found the shareholder's impleadment necessary, as his interests as a shareholder were at stake due to the allegations of mismanagement and oppression in the company.5. Final Order: The Tribunal allowed the impleadment of the shareholder as Additional Respondent No.23 in the Company Petition. However, the prayer to implead him in all related Interlocutory Applications was rejected. The Registry was directed to make necessary impleadment in the Company Petition, and the shareholder was instructed to file his counter within two weeks. The petitioners were also directed to provide a copy of the Company Petition to the shareholder promptly.