Indra Muthuvel & Ors vs S. Balasubramanian & Ors
- CitationCompany Appeal (AT) No.178 of 2018
Ratio decidendi
The rule this decision rests on
A shareholder is not entitled to be impleaded as a party respondent in a company petition merely by reason of being a shareholder; impleadment requires that the issues in the petition cannot be completely and effectively determined in the absence of the applicant, or that the applicant's legitimate interests or legal rights are affected by the proceedings. Where the shareholders have rejected the proposed amendment to the company's Articles of Association and the management is defending the petition on the basis of that decision, the applicant shareholders' legitimate interests or legal rights are not imperilled, and there is no genuine prospect of the impugned amendment being carried into effect so as to warrant their joinder.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Indra Muthuvel and Ors ...Appellants
Vs
S. Balasubramanian & Ors ...Respondents
For Appellant: Ms. Swati Bansal, Advocate.
For Respondent: Ms. M. Venmani, Advocate for R-16
Mr. M. Munusamy, Advocate for R1, R15.
JUDGEMENT
14.03.2019- Appellants seeking impleadment as party respondents in
Company Petition No.9/2007 pending disposal before National Company Law
Tribunal, Single Bench, Chennai are aggrieved of dismissal of their
application in terms of impugned order dated 10.4.2018.
2. After hearing learned counsel for the appellants, we find that the
appellants are shareholders and since the shareholders have rejected the
agenda by which the Articles of Association of the Respondent Company were
proposed to be amended and the management of Respondent company has
been defending the Company Petition on the basis of such decision taken by
the shareholders, no legitimate interests or legal rights of the appellants are
imperrilled. Merely because the appellants would be a proper party as
shareholders would not entitle them to be impleaded as party respondents in
the Company Petition unless the issues involved in the Company Petition
cannot be completely and effectively determined in absence of the appellants seeking impleadment. That being not the position and there being no genuine
prospect of the Articles of Association suffering amendment in the face of
rejection of the proposed amendment by shareholders, no good ground is
made out to interfere with the impugned order.
3. In view of the foregoing discussion the appeal being devoid of merit is
dismissed.
4. This will not, however, preclude the appellants from seeking
impleadment as party respondents in case an occasion arises in future
providing them a fresh cause of action.
(Justice Bansi Lal Bhat) Member (Judicial)
(Mr. Balvinder Singh) Member (Technical)
Bm/nn
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