2015 (12) TMI 1808 - HC - Companies Law

Prayer for impleadment - guarantee extended by the applicant had stood dissolved under the 'act of novation' - HELD THAT - Undaunted by order of rejection passed by the Division Bench dismissing the application for being impleaded, yet again applicant has filed present application and learned counsel for applicant has tried to buttress his arguments contending that in view of liberty given by Division Bench while disposing of OSA 33/2013 connected with OSA 44/2013 on 25.02.2015 such liberty would enable the applicant to file present application, requires to be considered with utmost circumspection for the reasons already indicated herein above inasmuch as liberty granted by Division Bench would not even remotely suggest that applicant would be entitled to reagitate the claim for being impleaded in the present proceedings. The present application deserves to be dismissed with exemplary costs.

Summary

Issues:
- Impleadment of a party in Company proceedings
- Interpretation of liberty granted by Division Bench for filing a new application

Analysis:
1. The application was filed by Dr. K seeking impleadment in Company proceedings, claiming ownership of shares in the company(in liquidation) and control over its affairs. He alleged that his shares were taken over by another individual with an understanding that all assets and liabilities were transferred. The State Bank of India extended a loan against the company's assets, and when the new owner proposed to manage the company, the guarantee extended by Dr. K stood dissolved. However, previous attempts by Dr. K to be impleaded were dismissed by the court, stating he was not a necessary party as he was not a shareholder. The Division Bench also noted that Dr. K voluntarily exited the company in 2006 and had no say in the matter.

2. Dr. K filed a new application based on the liberty granted by the Division Bench in a previous order. The Division Bench had allowed him to negotiate with the bank for clearing dues and taking over security to revive the company. However, the court held that such a prayer was not acceptable as the assets of a company under liquidation must be distributed as per the Companies Act. The Division Bench rejected all contentions of Dr. K, stating that a guarantor who is not a shareholder cannot claim the right to revive a company.

3. Despite the rejection by the Division Bench, Dr. K filed a new application, arguing that the liberty granted allowed him to do so. The court found that the liberty given did not entitle Dr. K to re-agitate his claim for impleadment. Citing relevant case laws, the court held that the facts and principles in those cases were different from the present situation. Ultimately, the court dismissed the new application with exemplary costs to be paid to the official liquidator.

In conclusion, the court dismissed the application for impleadment, emphasizing that the liberty granted by the Division Bench did not permit Dr. K to file a new application after his previous attempts were rejected. The court highlighted that as a guarantor without shareholding, Dr. K had no right to revive the company under liquidation. The application was dismissed with costs payable to the official liquidator.