2023 (12) TMI 1177 - AT - Companies Law

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, ... Impleadment of parties - necessary and proper party - persons concerned with the affairs of the company - effectual and complete adjudication - judicial discretion to add or strike out parties - shareholding threshold under Section 244 - transmission of shares under Section 56 - oppression and mismanagementImpleadment of parties - necessary and proper party - persons concerned with the affairs of the company - effectual and complete adjudication - shareholding threshold under Section 244 - transmission of shares under Section 56 - Impleadment of Appellants No.1 and No.2 as parties in C.P. No.129/ND/2019 was permissible and should be directed. - HELD THAT: - The Tribunal found that the NCLT had not commented on the shareholding of Appellants No.1 and No.2 and that the Respondents did not dispute the Appellants' status as shareholders (para 12). Given that the company is family-owned with each branch represented, the presence of the Appellants as parties would assist in effectually and completely adjudicating disputes of alleged oppression and mismanagement (paras 12-14). Relying on the principle that any person concerned with the affairs of a company may be added where their impleadment facilitates an effective, efficacious, just and fair adjudication, and on the appellate tribunal's power to add parties in appropriate cases, the Tribunal held that the Appellants have a direct and substantive interest and are proper and necessary parties (para 13). The NCLT's rejection of impleadment was therefore set aside and impleadment directed (paras 14-15). The Tribunal also noted issues raised below regarding transmission of shares under Section 56 and the statutory shareholding threshold under Section 244, but allowed impleadment to ensure comprehensive adjudication of the main petition (paras 3-5, 12-14). [Paras 12, 13, 14, 15]Appeal allowed; NCLT order dated 19.01.2022 set aside and Appellants No.1 and No.2 impleaded in C.P. No.129/ND/2019.Final Conclusion: The Company Appeal (AT) No. 76 of 2022 is allowed; the NCLT order dated 19.01.2022 is set aside and Appellants No.1 and No.2 are directed to be impleaded as parties in C.P. No.129/ND/2019. No order as to costs. 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.