Mr.Gireesh Kumar Sanghi & Anr vs Ravi Sanghi & Ors

NATIONAL COMPANY LAW APPELLATE TRIBUNAL CHENNAI (APPELLATE JURISDICTION) TA (AT) No.65/2021 Comp App (AT) No.392/2017 (Arising out of the `Impugned Order' dated 29.09.2017 in Company Application No.131/2017 in Company Petition No.71/2008, passed by the (`National Company Law Tribunal', Hyderabad Bench) In the matter of: 1. Mr. Gireesh Kumar Sanghi, R/o 1-44, P.O. Sanghi Nagar, Ranga Reddy District, Telangana - 501 501.

2. Mr. Gaurav Sanghi, S/o. Mr. Gireesh Kumar Sanghi, R/o 1-44, P.O. Sanghi Nagar, Ranga Reddy District, Telangana - 501 501. .... Appellants v. 1. Ravi Sanghi, R/o H.No.6-204/31, Sanghi Nagar, RR District, Telangana - 501 511.

2. Anita Sanghi, R/o H.No.6-204/31, Sanghi Nagar, RR District, Telangana - 501 511.

3. Aditya Sanghi, R/o H.No.6-204/31, Sanghi Nagar, RR District, Telangana - 501 511.

4. Alok Sanghi, R/o H.No.6-204/31, Sanghi Nagar, RR District, Telangana - 501 511.

5. Alka Sanghi, R/o 1-44, P.O. Sanghi Nagar,

TA (AT) No. 65/2021 (CA (AT) No.392/2017) Page 1 of 19 Ranga Reddy District, Telangana - 501 501.

6. Aarti Sanghi, R/o 1-44, P.O. Sanghi Nagar, Ranga Reddy District, Telangana - 501 501.

7. Ashish Sanghi, R/o 1-44, P.O. Sanghi Nagar, Ranga Reddy District, Telangana - 501 501. .... Respondents

Present:

For Appellant : Mr. Virender Ganda, Senior Advocate For Ms. Anju Jain, Mr. Hitesh Sachar, Mr. Anshit Aggarwal, Ms. Riya Palnitkar & Mr. Rohit Sark, Advocates

For Respondents : Mr. R. Venkatavaradan, Advocate For Mr. Anirudh Wadhwa, Mr. Debarish Chakraborty & Mr. Saai Sudharsan, Advocates, For R1-R4 Mr. Sharad Sanghi, Advocate, For R5-R7 JUDGMENT

(Hybrid Mode)

[Per : Justice Sharad Kumar Sharma, Member (Judicial)]

Brief facts of this Company Appeal are, that the Appellants who are two in

numbers, were Respondent Nos.2 & 3 in Company Petition No.71/2008,

Mr. Anand Prakash Sanghi & 6 Others Vs AGA Publications Limited & 13

Others. The aforesaid Company Petition was initially instituted before the

Company Law Board, Chennai Bench, by invoking the provisions contained

under Sections 111, 397, 398, 402, 403 and 406 to be read with Section 237 of the

Companies Act, 1956, the relief as it was sought for in the aforesaid Company

TA (AT) No. 65/2021 (CA (AT) No.392/2017) Page 2 of 19 Petition, was to the effect that the resolution that, was alleged to have been passed

at the EGM, which was said to have been held on 19.03.2007, with the agenda of

derecognizing the allotment of two lakh shares, that was allotted by Respondent

No.1 company on 01.03.1998 may be declared to be illegal and that, Registrar of

Companies, Hyderabad, Andhra Pradesh, may be directed not to take on record

Form 23, that was filed by 2nd Respondent (Appellant herein). It was also further

prayed for to set aside the Resolution, that was passed in the said EGM, that

derecognized the allotment of 84,99,937 shares made by 1st Respondent Company

on 01.04.2006, and further to direct the Registrar of Companies, Andhra Pradesh,

Hyderabad, not to take on record Form 23 that was filed by the 2nd Respondent.

2. At this stage, we are not required to go into the merits of the Company

Petition, as the subject matter involved therein, is the subject matter of

consideration in the CA (AT) No.393/2017 (TA 66/2021), where the challenge

has been given to the order that was rendered in the proceedings CP No.71/2008

on 29.09.2017.

3. When the proceeding was pending in the Company Petition No.71/2008,

the Applicants / herein Respondent Nos.1 to 4 Mr. Ravi Sanghi, Mr. Anita Sanghi,

Mr. Aditya Sanghi & Mr. Alok Sanghi are said to have filed an Impleadment

Application, being Company Application No.131/2017, as it was preferred in

Company Petition No.71/2008 (TP No.29/2016), praying for their Impleadment

as parties to the Company Petition, on the ground, which has been narrated in the

Impleadment Application, thus preferred on 22.11.2017. The Applicants have

TA (AT) No. 65/2021 (CA (AT) No.392/2017) Page 3 of 19 contended, that their material rights, is likely to be prejudiced, in case they are not

permitted to be impleaded in the Company Petition on the ground, that they are

the shareholders of the 8th Respondent Company, which was acquired by Sanghi

family in 1994 with a share capital base of 63 equity shares of Rs.10/- each, which

was equally divided amongst the Seven (7) Sanghi family members including the

1st Applicant herein at the rate of 9 equity shares to each such member. The

shareholding pattern is given below.

4. It was submitted, that on 01.03.1998, the Respondent No.8, had made an

allotment of 20 lakh equity shares of Rs.10/- each, to the family members, out of

which Applicant Nos.1 to 4 were the allottees with 1,25,000 equity shares each,

that is, in total 5 lakhs equity shares, that on 01.04.2006, the Respondent No.8

Company made a further allotment of 84,99,937 equity shares of Rs.10/- each,

among the Sanghi family members out of, which the Applicant Nos.1 to 3 i.e.,

Ravi Sanghi, Anita Sanghi & Aditya Sanghi were allotted 5,31,250 equity shares

each, while the 4th Applicant i.e, Mr. Alok Sanghi was allotted with 5,31,187

equity shares and thus the 4 Applicants together were holding 21,24,946 shares

and on that date, out of the total paid-up share capital of the 8th Respondent, of

Rs.1.05 crores of equity shares of Rs.10/- each, the Applicants were holding a

total of 26,24,946 equity shares of Rs.10/- each which was approximately 25% of

the total equity of the 8th Respondent Company. Hence, the Applicants to the

Impleadment Application contended that, since they were holding approximately

25% of the equity shares, in the company, their rights would be materially and

TA (AT) No. 65/2021 (CA (AT) No.392/2017) Page 4 of 19 adversely affected in case if any decision is taken in the Company Petition, being

Company Petition No.71/2008 (TP No.29/2016) and therefore they ought to be

impleaded in the said proceedings. Accordingly, they filed an Impleadment

Application on 12.07.2017, praying for the following reliefs:-

"Company Law Tribunal, Hyderabad Bench, be pleased

a) To implead the Applicants herein as party Petitioner No.8 to 11 in C.P.No.71/2008 in the interest of justice.

b) To restore the allotments of 20,00,000 shares and 84,99,937 shares that were originally allotted by the 1st Respondent Company on 01.03.1998 and 01.04.2006 respectively.

c) To set aside the illegal allotment of 45,00,000 shares alleged to have been allotted to the 9th Respondent and his family on 19.03.2007.

d) To pass such order or orders as the Hon'ble Tribunal deems fit and proper in the circumstances of the case or else the applicants herein will be put to great hardship and suffer irreparable loss".

5. The said Impleadment Application came up for consideration before the

National Company Law Tribunal, Hyderabad Bench, Hyderabad, it was allowed

by the Impugned Order dated 29.09.2017, which is under challenge in the instant

Company Appeal.

6. The Appellants herein who are the opposite party to the proceedings of the

Company Petition No.71/2008, have preferred this Company Appeal exclusively

challenging the order, allowing the Impleadment Application, on the ground that,

as a consequences of the Impleadment of the Applicants in the Company Petition,

their rights would be materially affected, as it would be resulting into creation of

an impediment in dealing with affairs of the Company and thus they contended

TA (AT) No. 65/2021 (CA (AT) No.392/2017) Page 5 of 19 that, since the Impleadment Application, has been moved at a much-belated stage

i.e, in 2017 though the Company Petition itself was pending since 2008, the

Application deserved to be rejected on the ground of limitation, having been filed

after 9 years of delay. They further denied the contents of the Impleadment

Application, which was filed by the Applicants giving the description of the

proportionate shares, which the Applicants claimed to be holding in the company.

7. The Learned Counsel for the Appellant has also argued the Company

Appeal from the perspective of "judicial propriety". He submits that the

proceedings of the said Company Petition CP No.71/2008 were being carried

before two-member bench of Learned NCLT, Hyderabad, and the order sheet of

the proceedings of 10.01.2017 records that the matter was heard by the two-

member bench, was marked as to be "part heard". Further, owing to the non-

availability of the Member Technical, the matter could not be further proceeded

for certain duration, consequent to which the Registrar, NCLT vide its letter dated

18.07.2017, had circulated a communication as regards reconstitution of the

Special Bench of the NCLT, Hyderabad, for a period from 24.07.2017 to

28.07.2017, due to the non-availability of the Member Technical. The said

correspondence of the Registrar dated 18.07.2017, was in consonance to the

provisions contained under Section 419 proviso to Sub-Section (3), which gives

power of reconstitution bench by the orders of the President, NCLT. The

aforesaid provisions are: -

TA (AT) No. 65/2021 (CA (AT) No.392/2017) Page 6 of 19

"(3) The powers of the Tribunal shall be exercisable by Benches consisting of two Members out of whom one shall be a Judicial Member and the other shall be a Technical Member:

Provided that it shall be competent for the Members of the Tribunal authorised in this behalf to function as a Bench consisting of a single Judicial Member and exercise the powers of the Tribunal in respect of such class of cases or such matters pertaining to such class of cases, as the President may, by general or special order, specify:

Provided further that if at any stage of the hearing of any such case or matter, it appears to the Member that the case or matter is of such a nature that it ought to be heard by a Bench consisting of two Members, the case or matter may be transferred by the President, or, as the case may be, referred to him for transfer, to such Bench as the President may deem fit".

8. The constitution of the said one-member bench, which obviously under law

was permissible, constituting of the Member Judicial, took up the matter on merits

thereafter, including the application for impleadment which was filed on

12.07.2017, seeking to implead the proposed applicant/petitioners i.e., Ravi

Sanghi, Anita Sanghi, Aditya Sanghi and Alok Sanghi, who prayed for to be

impleaded as the petitioner, in the Company Petition CP No.71/2008.

9. The Application was filed on 12.07.2017, and thereafter the proceedings of

the Company Petition had been taken up on 13.07.2017, before the division bench.

It is contended by the Learned Counsel for the Appellant that judicial propriety,

demanded that when the matter was once marked as "part heard", by the two-

member Bench, the single member bench constituted thereafter ought to have

desisted from hearing the impleadment application, which was preferred on

TA (AT) No. 65/2021 (CA (AT) No.392/2017) Page 7 of 19 12.07.2017. On 25.07.2017, the Impleadment Application was reserved for

orders, and later it was allowed by the impugned order dated 29.09.2017.

10. It was further argued by the Appellants, that once the matter was already

marked as a "part heard" by two-member bench, the single member bench, even

though it was constituted in the light of the provision contained under Section 419

Sub-Section (3) proviso ought to have desisted and even resisted too from hearing

the same and from passing any orders on the Impleadment Application, which

was considered earlier by two member bench, and instead, should have waited for

the aforesaid period of one week, till the rejoining of Member (Technical) on

return from leave. Further, allowing of the same by the order of 29.09.2017, itself

would be bad because the single member should not have considered the

application on its own merit, when the two-member bench has already seized with

the matter, marking it as 'part heard'.

11. As far as, the question raised pertaining to the judicial propriety is

concerned, we are of the view that the concept of the judicial propriety, is a self-

imposed restriction to be exercised by members of bench. It is not a ratio, which

has been propounded under the law and particularly in the light of the fact, when

the provision under Section 419 Sub-Section (3), itself confers the power of

constitution of a Tribunal on a single member bench, the constitution of the bench

by the Registrar on the directions of Hon'ble President, vide its order dated

18.07.2017, cannot be said to be suffering from any apparent legal error, which

can question the propriety of constitution of the said one-member bench, or of the

TA (AT) No. 65/2021 (CA (AT) No.392/2017) Page 8 of 19 orders by the single member on the ground of lack of judicial propriety or judicial

competence. But merely on the basis of the principle of self restraints, passing

the order, by the bench thus constituted cannot be taken as to be the basis to

contend that, the impugned order of 29.09.2017, allowing the impleadment

application, as it was preferred on 12.07.2017, would be bad in the eyes of law,

because on the date when the order was passed i.e., on 29.09.2017, the Learned

Single Member Bench of Judicial Member, did exercise the powers within its

competence and jurisdiction, owing to the constitution of bench as made by the

order of 18.07.2017. Hence, the contention pertaining to the "judicial propriety",

cannot be accepted by us, as argued by the Learned Counsel for the Appellant, on

the ground that since the matter was marked as part heard on 10.01.2017, it should

have been adjourned, to be heard till the resumption of duty by the two-member

bench. Rather, we are of the view that, once power is conferred on a single

member to exercise jurisdiction of two-member bench, constituted under law, it

can exercise the powers even relation to the matters assigned and relating to two-

member bench.

12. The second limb of argument of the Learned Counsel for the Appellant,

was that allowing of the intervention application suffered from an apparent

procedural vice for the reason being that, on the application itself no effective

opportunity of hearing was provided to the Appellants nor any opportunity was

given to them to raise their written objection to it. We will have to bear in mind

that, the application was filed on 12.07.2017 and thereafter, there was sufficient

TA (AT) No. 65/2021 (CA (AT) No.392/2017) Page 9 of 19 time between the date of filing, till 29.09.2017 when the impugned order was

passed on 29.09.2017, during which the Appellant could have filed an application

by way of an objection, or at least could have prayed for time to file objection, to

the aforesaid application during the pendency of it before the Learned NCLT. But

for the reason best known to the Appellants, they had chosen not to raise an

objection to the said application. Thus, the Appellants will have to blame

themselves, that despite of there being sufficient time available between the date

of filing till the date of order, they have not availed the opportunity to file or, to

press for filing an objection and therefore cannot shift the responsibility on the

Tribunal holding that the proceedings of passing of the order on 29.09.2017 was

bad, more particularly when, in all the proceedings that were held thereafter from

13.07.2017 onwards, the Appellants and their representatives had been actively

participating in the proceedings and they have not objected, nor they have raised

any plea before the Tribunal for availing an opportunity to raise objections to the

application. If that be so, the Appellant, now at this stage is estopped by conduct

to contend that the order passed on the Impleadment Application, which is under

challenge in the Comp App (AT) (CH) No.393/2017, is bad in the eyes of law, on

the ground that, they were not granted an opportunity to oppose the application.

The Appellants cannot take advantage of their own wrong and lack of diligence

in participating in the proceedings at this stage.

13. The Appellants contend that the impugned order would be bad, as no

independent order could have been passed on the Application i.e.,CA

TA (AT) No. 65/2021 (CA (AT) No.392/2017) Page 10 of 19 No.131/2017, owing to the nature of the proceedings, which was scheduled to be

held on 13.07.2017, 21.07.2017 and 25.07.2017. In fact, the impression, which

has been given by the Learned Counsel for the Appellant, is as if on these dates it

is the Company Petition itself that was listed for consideration and hence the

Tribunal ought to have heard the Company Petition itself and should have passed

the final order rather than passing an order on CA No.131/2017, independently

allowing the Impleadment Application. The expression as given by the Learned

Counsel for the Appellant, in the light of the orders dated 13.07.2017, 21.07.2017

and 25.07.2017, may not be acceptable by us, for the reason being that the head

under which the proceedings were being carried on the above dates before the

Learned Tribunal. It read as under, Company Petition / Application No.CA

No.131/2017 in CP No.71/2008. The said description of the nature of

proceedings, which was being expected to be carried, clearly demonstrates that,

on these dates the proceedings were supposed to be held for considering of the

application being CA No.131/2017, and hence it cannot be permitted to be

contended that, the Company Petition ought to have been decided first

particularly, when the Company Petition itself was being listed for consideration

of CA No.131/2017.

14. Lastly, they have contended that the Tribunal has not considered the fact

that forms, which were filed by the Respondents / Applicants were fraudulent and

that tribunal failed to appreciate the same while allowing the application, based

upon the respective claims of shareholding, by the Applicants, and the

TA (AT) No. 65/2021 (CA (AT) No.392/2017) Page 11 of 19 configuration of shares as claimed by the Applicants. Further, it was submitted

that since the Application for Impleadment was allowed without providing any

opportunity of hearing or any opportunity to file a reply, the entire proceedings

happens to be in violation of principles of natural Justice, without granting an

effective opportunity to file a reply, and the same being in violation of the

provisions contained under Section 421 of the Companies Act.

15. So far as the argument extended by the Learned Counsel for the Appellant

that they were not given any effective opportunity, to object to the application is

concerned, at this stage, after the order having been passed against the Appellant,

they cannot take the advantage of their own in action by not filing and even not

praying for the filing of an objection, and rather voluntarily participating in the

proceeding to contest the application CA No.131/2017 on its merit, and therefore,

the order of reserving the orders on the said application as passed on 25.07.2017,

cannot be said to be illegal, merely because of the fact that the orders on the

application was delivered on 29.09.2017. The Appellant for the said purpose, do

not contend that the passing of an order on 29.09.2017, after it was reserved on

25.07.2017, would vitiate the order. In the absence of the said plea being taken,

we are not required to venture into that aspect, that merely because there was a

belated delivery of the order on 29.09.2017 after the same being reserved on

25.07.2017, delayed delivery of an interlocutory order will not vitiate the order

passed on an interlocutory application.

TA (AT) No. 65/2021 (CA (AT) No.392/2017) Page 12 of 19

16. The Learned Counsel for the Appellant has attempted to create a doubt that

the reserving of the order by an order of 25.07.2017, that was being treated as if

it was an order reserved in the principal Company Petition, which was supposed

to be decided. By hearing the Company Petition itself on 29.09.2017 and passing

an independent order on CA No.131/2017 on 29.09.2017, cannot be said that it

will vitiate the order itself, since having been passed on the same day, when the

final adjudication was made in the Company Petition, and that too when on the

date application too was listed for orders.

17. So far as the contention raised by the Learned Counsel for the Appellant

that no notice was issued on the application, the same cannot be accepted by us

now, owing to the observation, which has been made in the order sheet, wherein

it shows that in each of those dates the Appellants were voluntarily participating

in the proceedings. Under the legal connotation, the word "notice", only means

to demonstrate the "knowledge of the proceedings" and if the Appellant had been

participating in the proceedings, after filing of the application on 12.07.2017 till

passing of the final order on 29.09.2017, that in itself will attribute a knowledge

to the Appellants and more particularly when its not the case of the Appellant that,

the copy of the application i.e., CA No.131/2017 were not served upon the

Appellant. In that eventuality, the contention of the Learned Counsel for the

Appellant

(i) qua the judicial propriety,

TA (AT) No. 65/2021 (CA (AT) No.392/2017) Page 13 of 19

(ii) qua passing of the order by the single judge,

(iii) qua non-issuance of the notice,

(iv) qua non-providing of an opportunity to object to the application, is not

acceptable by us because the Appellants have to blame themselves for lack of

diligence in effectively participating in the proceedings when CA No.131/2017

was heard finally on 25.07.2017, the date on which the order was reserved.

Delivering of an order at a later stage i.e., on 29.09.2017, will not vitiate an order

in itself, particularly when no malice has been argued. Thus, the aforesaid

argument as it has been extended by the Learned Counsel for the Appellant, since

there is no legal bar as such in resorting to the aforesaid process of passing of an

order, the proceedings as it was held on CA No.131/2017, by virtue of the

impugned order of 29.09.2017 cannot be said to be bad in the eyes of law.

18. The questions, raised by the Appellant as extracted above has been

primarily confined to delay in filing of an application, but at no point of time, the

Appellant had ever pleaded that allowing of Company Application No.131/2017,

will adversely affect the rights of the Appellants and that, if the same is allowed

in the proceedings of the Company Petition, being held under Section 111, 397,

398, 402, 403 & 406 to be read with Section 237 of the Companies Act, 1956, it

will influence the decision in the Company Petition in a manner adverse to them.

19. If the Impleadment Application itself is taken into consideration, the

Applicants have sought themselves to be impleaded as petitioners to the

TA (AT) No. 65/2021 (CA (AT) No.392/2017) Page 14 of 19 Company Petition. Their application was not opposed in writing by the Opposite

Party Nos.1 to 7 of the Impleadment Application, who were the original

petitioners to the Company Petition, and in fact the present Appellant was

Respondent No.9 to the Impleadment Application, who too has not effectively

opposed the allowing of the Impleadment Application on the aforesaid ground as

narrated above.

20. For the purposes of considering the necessity of Impleadment of a party to

the proceedings, the basic principles as enshrined under Order I Rule 10 of the

CPC, could be borrowed to be applied in the instant proceedings, under which it

needs to be examined as to whether in the absence of Respondent Nos.1 to 4, the

lis could have been effectively decided, particularly when they have claimed to

have been allotted with the shares to the extent as narrated in the Impleadment

Application itself, which has been respectively detailed in Para I of the

Impleadment Application. The Appellant in the instant Company Appeal does

not deny the fact as pleaded in Para I of the Impleadment Application, that was

preferred by the Applicants / herein Respondent Nos.1 to 4. If, at all, any

prejudice was being caused to anybody, as a consequence of the filing of the

Impleadment Application by Respondent Nos.1 to 4, it would be affecting the

Petitioners to the Company Petition only, who could have filed their objections

against the Impleadment, but the same has not been opposed by the original

Petitioners to the Company Petition.

TA (AT) No. 65/2021 (CA (AT) No.392/2017) Page 15 of 19

21. The Impleadment of Applicant Nos.1 to 4 of the Impleadment Application,

if at all, it could have been put to challenge, it would have been done by the

Petitioners to the Company Petition, which was not done. As per the principles

of dominus litis the Company Petitioners, who happen to be the master of their

proceedings have got a right to choose, as to who could be impleaded as a party

to the proceedings and the present Appellant who is the Opposite Party No.2 to

the Company Petition who would not be having any legal cause, as such, as

against the allowing of Impleadment Application.

22. Even on the perusal of the Impugned Order allowing Impleadment of Ravi

Sanghi, Anita Sanghi, Aditya Sanghi and Alok Sanghi, the legal implication of

the same was considered by the Learned Tribunal, while passing the Impugned

Order of 29.09.2017, for the reason which has been narrated in Para V of the order,

that owing to the fact of the share configuration and the shareholdings pattern, as

detailed in Para IV of the impugned order the Learned Tribunal has aptly observed

that the Applicants would be the proper and necessary party, who should be

impleaded as petitioners to a litigation, because it was their material rights which

was likely to be affected because of any final order, and further in case if they are

not made as a party to the proceedings, it may lead to multiplicity of litigation at

a later stage. The contention that since the impleadment application was preferred

at a highly belated stage it cannot be considered, is also the fact which is not

tenable for the reasons being that for the purposes of preferring of an impleadment

application, no specific time frame has been contemplated under Law, and that it

TA (AT) No. 65/2021 (CA (AT) No.392/2017) Page 16 of 19 can be preferred at any stage of the proceedings, even at an appellate stage if the

relevant court determines and feels it necessary that the Applicant happens to be

a necessary party, for the purposes of an effective adjudication of a case, it could

always permit to allow the impleadment application to curb the multiplicity of

litigation for the same cause of action. Consequently, in Para VIII of the

impugned order, the Learned Tribunal has rightly come to the conclusion that for

the reasons enshrined in Para 4 of the Impugned Order, the Applicants would be

the necessary party to be impleaded in the Company Petition. Merely because of

there is an apprehension that certain rights are likely to be prejudiced affecting the

functioning of the Company, which in itself could still be a subject matter for

adjudication when the Company Petition itself, is taken up to be adjudicated on

merits, the same cannot be a ground to reject impleadment. At the stage of

considering the Impleadment Application, the Learned Tribunal is expected to

prima facie determined as to whether for an effective adjudication, the Applicants

were at all necessary party, who were required to be impleaded or not, which

Learned Tribunal has done, faulted by assigning reasons in Para IV, which has to

be read for the reasons assigned in Para V for allowing the Impleadment

Application.

23. Since the present Appellants happen to be the Respondents in the Company

Petition, they don't have any material right as such to put a challenge to the

impleadment application, and that to in the context of the provision contained

under Section 399 of the Companies Act, which is attempted to be argued by the

TA (AT) No. 65/2021 (CA (AT) No.392/2017) Page 17 of 19 Appellant, that the Impugned Order happens to be in violation of Section 399 of

the Companies Act. In case the argument in the context of the provision contained

under Section 399 of the Companies Act is considered, it does not at any stage

create a bar in entertainment of application for impleadment. Rather, it empowers,

the Tribunal to meet out the ends of Justice, by giving an effective adjudication

by hearing all the parties to the proceeding on merits. When it is an admitted case

of the Appellant that the Applicants to the Impleadment Application were the

holders of shares, whether the said transfer was a rightful transfer of shares are

not would still be a subject matter to be considered on its own merits when the

Company Petition itself is decided on merit, and the said aspect is not required to

be ventured into in detail, while deciding the Impleadment Application. Further,

the order of allowing the impleadment is a case where no express right between

the parties has been decided on its own merit, and it has been passed for ensuring

an effective adjudication. Thus, at a stage when the Impleadment was considered,

the provisions contained under Section 399 of the Companies Act becomes

irrelevant.

24. Thus, the Impugned Order of 29.09.2017 allowing the Impleadment

Application only serves to shorten the litigation by summarising all the

controversies between the parties, at one platform. Further, since allowing the

Impleadment is not adjudication of lis on merit, it may not be appealable under

Section 421 of the Companies Act, because even after the Impleadment is

permitted, all rights or merits of the petition are still and yet to be decided by the

TA (AT) No. 65/2021 (CA (AT) No.392/2017) Page 18 of 19 Learned Tribunal when the Company Petition itself is dealt on its merits. Owing

to the above, the Company Appeal lacks merit and the same is accordingly

dismissed. All pending interlocutory applications would stand closed.

[Justice Sharad Kumar Sharma] Member (Judicial)

[Jatindranatha Swain] Member (Technical)

09/09/2025 VG/MS/RS

TA (AT) No. 65/2021 (CA (AT) No.392/2017) Page 19 of 19