2000 (3) TMI 1025 - HC - Companies Law

Summary

Issues Involved:
1. Whether the right to sue survives in favor of the respondents upon the death of the original plaintiff?

Analysis:
The revision application challenged an order allowing the respondents to be brought on record as the legal representatives of the deceased plaintiff in a suit. The petitioner argued that since the suit was based on actions taken by the deceased plaintiff as a director of a company, the right to sue did not survive after her death. The petitioner relied on legal precedents to support this argument.

On the contrary, the respondents contended that the suit challenged a resolution allegedly passed improperly, affecting their shareholding in the company. They argued that the right to sue persisted in their favor even after the death of the original plaintiff. Legal precedents were cited to support this position as well.

The central issue for consideration was whether the right to sue continued for the respondents following the death of the original plaintiff. It was noted that the deceased plaintiff held a significant shareholding in the company before the resolution under dispute. Citing decisions by the Apex Court, it was established that the legal representatives of a deceased shareholder inherit the rights associated with the shares, enabling them to seek legal recourse in case of mismanagement.

The court emphasized that the shareholders' rights, including participation in management and seeking relief for mismanagement, extend to their legal representatives after their demise. In this case, the respondents, as legal representatives of the deceased plaintiff, acquired the right to the shareholding in question. Consequently, the right to sue in the matter was deemed to have survived and was upheld for the respondents.

The court distinguished the cases cited by the petitioner, clarifying that they were not directly applicable to the circumstances at hand. It was highlighted that the relief sought in the present suit was not for personal benefit but related to the inheritance of shareholding rights. The court further differentiated the legal principles discussed in those cases from the situation under consideration.

Ultimately, based on the legal principles established by the Apex Court and the specific facts of the case, the court found no grounds to interfere with the order allowing the respondents to be included as legal representatives and pursue the suit. Consequently, the petition was dismissed, and costs were not awarded, with the interim order being vacated.