Lalia Joseph vs A.K. Mansoor

Company Appeal (AT) No.339 of 2017 [Arising out of order dated 23.08.2017 passed by National Company Law Tribunal, Chennai in CA No.34 of 2016 [TCP/180/2016])

IN THE MATTER OF:

Lalia Joseph SFS Calton, Kowdiar P.O. Ambalamukku, Trivandrum - 695003 ... Appellant

- Versus -

1. A.K. Mansoor Chathuntakayil House, Puthumanasseerry, Pavaratty, P.O. Trichur - 680507 Kerala State ...Respondent No.1 (Original Petitioner) 2. M/s. Indo-Asian News Channel (P) Ltd. Having its registered office at Reporter Studio Complex, HMT Colony, Kalamassery, Cochin - 683503 Kerala State ...Respondent No.2 (Original Respondent No.1) 3. M.V. Nikesh Kumar Meleth Veedu, Burnasseri Post, Kannur - 670013 Kerala State ...Respondent No.3 (Original Respondent No.2) 4. Rani Verghese Meleth Veedu, Burnasseri Post, Kannur - 670013 Kerala State ...Respondent No.4 (Original Respondent No.3) 5. The South Indian Bank Limited (Set ex-party on 09.02.2017) Elias Chamber, Banrjee Raod, Ernakulum - 682018 Kerala State ...Respondent No.5 (Original Respondent No.4)

Company Appeal (AT) No.339 of 2017 2

6. Leena Narayanan, (Set ex-party on 09.02.2017) Ramamangalathu House, Vizhikkithodu P.O., Kanjirapally (Via) Kottayam - 686527 Kerala State ...Respondent No.6

7. Vijakumari (Set ex-party on 09.02.2017) Flat No. 7B Skyline Emeralds South Avenue Panampilly Nagar Ernakulum - 682036 Kerala State ...Respondent No.7

8. Asset Homes Private Limited (Set ex-party on 24.03.2017) G-129, 2B/34A, 3rd Cross, Panampilly Nagar, Cochin - 682036 Kerala State ... Respondent No.8

Present: Shri Vikramjit Banerjee, Sr. Advocate with Shri M.S. Vishnu Sankar, Shri Ayush Anand, Shri Vatsalya Shrivastava and Shri E.M.S. Anam, Advocates for the Appellant

Shri K.S. Mahadevan, Advocate for Respondent No.1 Shri P.V. Dinesh and Shri Rajendra Beniwal, Advocate for Respondent Nos.2 and 4

JUDGEMENT

A.I.S. Cheema, J. :

1. This appeal is filed by the appellant aggrieved by the impugned order

dated 23.08.2017 passed by learned National Company Law Tribunal,

Chennai Bench, Chennai (NCLT in short) in CA 34/2016 in TCP 180/2016 as

she has been directed to be added as party respondent. Respondent No.1 -

original petitioner has filed the company petition against present Respondent

Company Appeal (AT) No.339 of 2017 3

Nos.2 to 5 alleging the acts of oppression and mismanagement. In the petition,

he then filed CA 34/2016 seeking to implead the present appellant and

present Respondent Nos.6 to 8. The learned NCLT after hearing the applicant

has allowed the same adding Respondent Nos.5 to 8 as were sought by the

present Respondent No.1. Accordingly, the present appeal has been filed by

the appellant who was Respondent No.7 in the CA 34/2016.

2. We have heard learned counsel for the appellant. It is the submission

that the appellant has been added on the basis of such application as CA

34/2016 which did not show any averments against the appellant. No relief

has been sought against the appellant in the company petition. Only on the

basis that if the oppression and mismanagement is proved, NCLAT may have

to pass some orders regarding the disputes of issue of shares, the present

appellant could not have been added as respondent. The learned counsel

submitted that in the company petition itself in para - 19, the Respondent

No.1 has filed the petition restricting the relief which he was seeking. Para -

19 reads as under:

"The petitioner submits that barring the initial allotment of shares

at the time of incorporation, the shares subsequently subscribed

and allotted are liable to set-aside, the same being in gross

violation of the provisions of Article 5 of the AoA. However, the

Petitioner is restricting his challenge to the impugned allotments

made in favour of the Petitioner and the second and third

Respondents, who are parties to the present proceedings. The

Company Appeal (AT) No.339 of 2017 4

share allotments liable to be set-aside are given hereunder:

S. No. Name of Shareholders Equity %

1 A.K. Mansoor -P1 106387 25.51

2. M.V. Nikesh Kumar -R2 233466 55.98

3. Rani Varghese - R3 8333 2.00

3. The counsel has then referred to CA 34/2016 where the Respondent

No.1 without referring to his para - 19 reproduced in the application the

reliefs 1 to 5 as were prayed in the company petition and then made the

following averments:

"3. As can be seen from the reliefs claimed for in

the petition, the rights of all the shareholders of the 1st

respondent company would be directly affected. The

issue giving rise to these rights cannot be adjudicated

upon effectively and completely without the presence

of these proposed parties. Since these persons

continue to be the shareholders, their presence in the

proceedings becomes necessary. These persons are

proper and necessary parties for the adjudication of

the issues in the above Company Petition.

4. I state that this application is limited to the

extent of impleading these proposed parties as party

respondents to the above petition. The presence of

these respondents would in no way prejudice the

Company Appeal (AT) No.339 of 2017 5

interest or rights of the other respondents. On the

other hand the presence of these persons is

paramount for complete adjudication of all the issues

in the petition.

5. The Petitioner submits that the presence of

these proposed parties would also ensure that all the

parties, who would be affected if an Order is passed

in the above petition, are before this Tribunal. This

would not only put an end to all the issues in the

petition but would also ensure that there are no

further litigations in respect of the issues here.

In the light of all the above submissions it is prayed

that

(a) The respondents 5 - 8 in the above

application be impleaded as party

respondents to the above petition;

(b) Consequently permit the applicant to

amend the cause-title of the above

petition to include the respondents 5-8 as

respondents in the memo of parties.

(c) Pass such further or other orders as this

Hon'ble Tribunal may deem fit in the

facts and circumstances of the case."

Company Appeal (AT) No.339 of 2017 6

4. Learned counsel submitted that while making the application for

impleadment, although the Respondent No.1 referred to the reliefs sought in

the company petition, no reference was made to the challenge restricted as

was mentioned in para - 19 of the company petition. In the application for

impleadment, no case has been made out as to why the present appellant was

a necessary party. It has been argued that when no relief has been sought

against the present appellant, she could not have been impleaded as a

respondent.

5. It has been argued by the learned counsel for the appellant that the

appellant has already filed criminal complaint against the Respondents 3 and

4 relating to cheating which has been investigated. The appellant had invested

Rs.1.5 crores for equity shares in the respondent company and again Rs.9.5

crores to set up the company and had even mortgaged her property. The

amount was given to the respondents 2 and 3. It is stated that some shares

were issued but later on it was learnt that preference shares had been issued

without voting rights because of which the appellant found that she had been

cheated and it was further found that transfer forms had been forged. It is

stated that original respondents 2 and 3 moved Kerala High Court for

quashing of the criminal case which has not succeeded. It is submitted by the

learned counsel that before the Kerala High Court that original Respondents

2 and 3 tried to show that it is basically civil dispute between the parties. This

was not accepted. The counsel submitted that the original respondents 2 and

3 have then filed SLP before the Hon'ble Supreme Court on 06.04.2017 and

just before that, on 01.04.2017, CA 34/2016 was filed before the NCLT. It is

Company Appeal (AT) No.339 of 2017 7

argued that ground was being made out by present respondents in collusion

that there is a civil dispute pending. According to the counsel, the facts are

obvious and the application for impleadment should have been rejected. The

counsel submitted that the impugned order deserves to be set aside.

6. Learned counsel for Respondent No.1 - original petitioner has

submitted that the CA 34/2016 will have to be read with the company

petition. According to him, even if in the CA, Respondent No.1 did not mention

that the appellant is a shareholder, the appellant herself in her reply before

NCLT accepted that she is a shareholder. Learned counsel referred to copy

annexed with reply filed by Respondent No.1 in this appeal. The appellant

mentioned in para - 6 as under:

"It is submitted that the 7th Respondent cannot be made as a party

in the present petition just because she is a shareholder of the

Company specifically when there are no allegations and no

specific prayer made against her. The present application is only

to annoy the 7th Respondent by impleading here in a longstanding

litigation between the Applicant and the contenting Respondents."

7. According to the learned counsel, it is in the interest of the

appellant herself that she should be party in the company petition. He

says that Respondent No.1 does not know the details of the

shareholders of the company. At the time of arguments, the learned

counsel for Respondent No.1, however, agreed that if records of the

Registrar of Companies are seen, particulars of the shareholders can

be ascertained.

Company Appeal (AT) No.339 of 2017 8

8. Counsel for present Respondents 2 to 4 submitted that if the copy

of the preliminary enquiry report filed by the appellant is seen, it can

be appreciated that these respondents are facing criminal case on the

facts which according to the learned counsel will also have to be

considered in the company petition. The learned counsel thus

submitted that the appeal should be rejected.

9. We have perused the prayers made in the company petition as

well as para - 19 of the company petition whereby Respondent No.1 -

original petitioner himself has restricted his challenge to the impugned

allotments made in favour of the petitioner and original second and

third respondents in the company petition. When this is so, the learned

counsel for the appellant is rightly submitting that without amending

the company petition and without giving particulars in their application

for impleadment as to how and why the appellant is a necessary party,

the impleadment could not have been allowed just for the asking. From

the paragraphs reproduced from CA 34/2016, it is apparent that it was

quite a vague application. There appears substance in the submissions

made by the learned counsel for the appellant that when there was no

amendment sought in the company petition so as to make out a case

against appellant and there were no sufficient pleadings in the

application for impleadment, the impugned order as has been passed

is not maintainable, at least against the present appellant. The others

who have been added and have not come forward to challenge the

Company Appeal (AT) No.339 of 2017 9

impugned order we will not interfere as regards those other

respondents who have been added. We pass the following order.

10. The appeal is allowed, the impugned order is quashed and set

aside as far as the impugned order is impleading the present appellant

as respondent in the company petition. No order as to costs.

[Justice A.I.S. Cheema] Member (Judicial)

[Balvinder Singh] Member (Technical)

New Delhi

18th December, 2017

/rs/nn

Company Appeal (AT) No.339 of 2017