2017 (11) TMI 925 - Tri - Companies Law

Applicants as appropriate and necessary parties - Held that - It is the settled position of law that the proper and necessary parties should be impleaded to a litigation, in order to avoid multiplicity of litigation later on with a similar prayer. Moreover, the main issue is pending from the year 2008, and if the Applicants are not permitted to add as petitioners as prayed for in the present application, it will lead to file a separate Company Petition, which is not at all warranted, since the prayer of the Applicants in the present Company Application is already covered by the prayer in the main Company Petition 71/2008. As considered the pleadings made by both the parties along with supporting material papers. It is true that the court/Tribunal should not permit to file litigation separately for the same cause of action. The suit/Company Petition is required to be filed by impleading all proper and necessary parties to the litigation instituted in a court of law. As convinced that the applicants are appropriate and necessary parties to the main CP No. 71 of 2008, and allowing this Application would not cause any prejudice to anybody. On the other hand, it would facilitate to decide the issue by associating all the proper and necessary parties. Therefore, the Company Application deserves to be allowed.

Summary

Issues:
1. Impleadment of applicants as party petitioners in CP No.71/2008
2. Restoration of allotments of shares
3. Setting aside illegal allotment of shares
4. Delay in making impleading application
5. Proper and necessary parties impleaded to the litigation

Analysis:

Issue 1: Impleadment of applicants as party petitioners in CP No.71/2008
The Company Application sought to implead the applicants as petitioners in CP No.71/2008. The applicants were original shareholders of the 8th Respondent Company, holding a significant percentage of equity shares. The application highlighted suspicions regarding the management of the company, especially concerning compliance with legal provisions and maintenance of company records. The delay in filing the impleading application was attributed to previous attempts at amicable settlement advised by the Hon'ble CLB. The Tribunal considered the necessity of impleading all proper and necessary parties to avoid multiplicity of litigation.

Issue 2: Restoration of allotments of shares
The main contention was whether the applicants should be allowed to restore the allotments of shares that were originally allocated to them but subsequently canceled. The Tribunal noted that the applicants were allotted shares which were later canceled, leading to the filing of CP No. 71/2008 by another party. The Tribunal emphasized the importance of impleading proper and necessary parties to avoid separate litigation for the same cause of action.

Issue 3: Setting aside illegal allotment of shares
The application also sought to set aside the alleged illegal allotment of shares to the 9th Respondent and his family members. The Respondent was accused of falsely claiming allotments of shares through misleading filings with the ROC. The Tribunal considered the evidence presented and the implications of allowing the application on the pending litigation.

Issue 4: Delay in making impleading application
The Respondent opposed the Company Application, arguing that the applicants were not diligent in filing the application in a timely manner. The Tribunal acknowledged the delay but ultimately decided that allowing the application would not cause prejudice and would facilitate a comprehensive resolution of the issues at hand.

Issue 5: Proper and necessary parties impleaded to the litigation
After considering the arguments from both parties and relevant legal precedents cited, the Tribunal concluded that the applicants were appropriate and necessary parties to the main CP No. 71 of 2008. The Tribunal allowed the Company Application, permitting the applicants to implead as Petitioner Nos. 8 to 11 in CP No.71/2008 in the interest of justice. The decision aimed to ensure all relevant parties were involved in the litigation to facilitate a fair and comprehensive resolution.

In conclusion, the Tribunal allowed the Company Application, emphasizing the importance of impleading proper and necessary parties to avoid further delays and ensure a comprehensive resolution of the legal issues at hand.