2011 (9) TMI 1159 - HC - Companies Law

Summary

Issues Involved:
1. Appeal against the dismissal of appellant's application to be added as a party petitioner or respondent in Company Petition No. 252 of 1985.
2. Determination of whether the refusal to add the appellant as a party is just and proper.
3. Appealability of the trial court's order under Clause 15 of the Letters Patent.

Detailed Analysis:

1. Appeal Against Dismissal of Appellant's Application:
The appellant sought to be added as a party petitioner or respondent in Company Petition No. 252 of 1985. The original petition was filed by Amita Sen under sections 397 and 398 of the Companies Act, 1956, and after her death, her sons were substituted as petitioners. The appellant claimed to have acquired shares through inheritance and a deed of gift, entitling them to 33% of the company's shares. However, the company did not rectify the share register to reflect this. The appellant's application for addition and transposition of the petitioner was dismissed by the trial judge, who deemed the application premature and granted leave for future action post the decision of the Company Law Board.

2. Justification of Refusal to Add the Appellant:
The trial judge's refusal was based on the appellant's pending application before the Company Law Board for rectification of the share register. The judge observed that the appellant's right to bring a separate action was not destroyed. The appellant's argument that their predecessor held 2440 shares and that their shareholding was reduced from 11.91% to 0.17% despite a status quo order was noted. The appellant contended that the refusal to add them as a party would cause prejudice and render them remediless. However, the court found that the appellant's right to come into the proceedings or gain carriage of proceedings was not an enforceable right, especially since the appellant had already filed a comprehensive civil suit seeking similar reliefs.

3. Appealability of the Trial Court's Order:
The court first addressed whether the trial judge's order was appealable under Clause 15 of the Letters Patent. The Supreme Court's decision in Shah Babulal Khimji v. Jayaben D. Kania & Anr. was cited, which clarified that not every interlocutory order is a judgment; only those affecting vital or valuable rights and causing serious injustice are considered judgments. The court noted that the trial judge's order did not determine any rights or liabilities and kept the issues open for future action. The appellant's right to join the proceedings was contingent on the outcome of the pending application before the Company Law Board. The court concluded that the trial judge's order was not a judgment within the meaning of Clause 15 of the Letters Patent and thus not appealable.

Conclusion:
The court dismissed the appeal, holding that the trial judge had justified reasons for not adding the appellant as a party. The appellant's right to bring a separate action was preserved, and the pending proceedings before the Company Law Board would determine the requisite extent of shareholding. The court directed the Company Law Board to expedite the disposal of the pending application within two months. The appellant was advised to bring appropriate action in accordance with the law if so desired.