NCLT allows daughters of deceased shareholder to join oppression petition despite lacking 10% shareholding under Section 244

The NCLT allowed an impleadment application in an oppression and mismanagement petition under Sections 241-242 of the Companies Act. The appellants, daughters of a deceased shareholder and sisters of the respondent against whom allegations were made, sought to be added as parties despite holding less than 10% shareholding required under Section 244. The NCLT held that each family branch should be represented for effective dispute resolution. The appellants, being shareholders with direct substantive interest in the controversy, were deemed necessary and proper parties whose inclusion would facilitate just and fair adjudication of the case.

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Issues Involved:
1. Impleadment of Appellants as Petitioners in the Company Petition.
2. Threshold shareholding requirement under Sections 241 and 242 of the Companies Act, 2013.
3. Allegations of Oppression and Mismanagement by the Respondents.
4. Legal standing and rights of the Appellants as shareholders.

Summary:

Impleadment of Appellants as Petitioners:
The present Company Appeal (AT) No. 76 of 2022 was filed by Appellants seeking their impleadment as Petitioners in Company Petition No. 129/2019, which was initially filed by Smt. Prem Kaur under Sections 241 & 242 of the Companies Act, 2013, against acts of Oppression and Mismanagement by the Respondent Company and its Directors. The NCLT had rejected the impleadment application on the grounds that the applicants did not apply for transmission of shares as required under Section 56 of the Act and failed to establish their entitlement to the shares of the deceased shareholders.

Threshold Shareholding Requirement:
The original Petitioner in CP 129/2019 did not meet the 10% shareholding threshold required under Section 244 of the Act. The Appellants argued that their combined shareholding, along with that of Smt. Prem Kaur, would surpass the 10% threshold, thereby making them competent to prosecute the Company Petition without a waiver application. The NCLT had made no specific comments regarding the shareholding of Appellants No. 1 and 2.

Allegations of Oppression and Mismanagement:
The Appellants contended that acts of Oppression and Mismanagement were committed by the Respondents, including illegal appointments of Directors without proper shareholder meetings and forgery of documents, which led to the lodging of an FIR. The Appellants sought to join the Petition to support the allegations and ensure a comprehensive adjudication of the case.

Legal Standing and Rights of the Appellants:
The Tribunal noted that the Appellants are shareholders and family members concerned with the affairs of the Company. It was held that their impleadment would facilitate an effective, efficacious, just, and fair adjudication of the case. The Tribunal referred to the Chennai Bench's judgment in the case of 'P J Mathews' Vs. 'C. Mohanan Pillai', emphasizing that adding a party who is concerned with the affairs of the Company is necessary for complete adjudication.

Conclusion:
The Appellate Tribunal allowed the appeal, set aside the NCLT's order dated 19.01.2022, and directed the impleadment of Appellants No. 1 and 2 in C.P. No. 129/ND/2019. The Tribunal concluded that the Appellants are proper and necessary parties whose presence will assist in arriving at a correct decision in the pending Company Petition. No order as to costs was made.

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