Derivative appellate right fails where company withdraws challenge to rectification of members' register

An appeal against rectification of the register of members under Section 59 of the Companies Act, 2013 could not be maintained by a second appellant whose asserted right to challenge was wholly derivative of the company's case. Once the company withdrew from the challenge, the second appellant had no independent enforceable right shown to continue the proceedings, so the appeal was unsustainable and dismissed. The Tribunal noted that any separate grievance available to the second appellant could still be pursued in appropriate independent proceedings under Section 59(2).

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Issues: Whether the appeals could be maintained by the second appellant after the first appellant company had withdrawn from the challenge to the orders directing rectification of the register of members.

Analysis: The appeals arose from orders under Section 59 of the Companies Act, 2013 directing rectification of the register of members. After the company withdrew its challenge, the second appellant's ability to continue the proceedings depended entirely on the company's subsisting contest, since his asserted capacity was derived from the company. In the absence of any independent cause shown by the second appellant to assail the impugned orders within these appeals, the challenge was held to be unsustainable. The Tribunal also noted that any separate grievance available to the second appellant could be pursued in appropriate proceedings under Section 59(2) of the Companies Act, 2013.

Conclusion: The appeals were not maintainable at the instance of the second appellant alone and were dismissed, while leaving him free to pursue independent statutory remedies.

Final Conclusion: The decision holds that once the company withdrew from the appeal, the remaining appellant could not continue the challenge without an independent enforceable right, though separate proceedings under the rectification provision remained open.

Ratio Decidendi: A party whose asserted right to appeal is wholly derivative of the company cannot maintain the challenge after the company withdraws, unless an independent statutory right to appeal is shown.

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