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2021 (7) TMI 411 - AT - Companies LawMismanagement and oppression - section 241 and 242 of the Companies Act, 2013 - Appellants submits that the First Respondent/Applicant had failed to establish that how his rights as shareholder will get affected - HELD THAT - It is relevantly pointed out that a Tribunal has the requisite power to add or strike out a party at any stage of a given proceedings, in the considered opinion of this Appellate Tribunal . Further, in Law, to bring a person as a Party/ Respondent/Defendant in a given case/legal proceedings is not a Substantive Right but one of procedure and the Tribunal in this regard, is to exercise its sound judicial discretion. To determine whether a person is to be impleaded or otherwise, cannot depend mainly on the aspect as to whether he has an interest in the property, but whether a right of a person would get affected, if not impleaded in a given pending legal proceedings before the Competent Forum . As a matter of fact, the Tribunal can permit even the impleadment of third party, if his/its presence is necessary for adjudication of the subject matter in issue. In the instant case on hand, the fact that First Respondent/Applicant being a shareholder of the 9th Respondent/Company is not in dispute. It cannot be brushed aside that in the main Company Petition, the Appellants/Petitioners had alleged mismanagement and oppression in the Company - Appeal dismissed.
Issues Involved:
1. Whether the First Respondent/Applicant is a necessary party to the proceedings. 2. Whether the impleadment of the First Respondent/Applicant affects the adjudication of the main Company Petition. 3. Whether the impugned order passed by the National Company Law Tribunal (NCLT), Kochi Bench, is legally tenable. Issue-wise Detailed Analysis: 1. Necessary Party: The primary issue revolves around whether the First Respondent/Applicant is a necessary party in the main Company Petition (CP/21/KOB/2020). The Appellants argued that the First Respondent/Applicant is not involved in the conduct and management of the affairs of the 2nd Respondent/Company or any other Respondent Companies and thus is not a necessary party. They contended that the First Respondent failed to establish how his rights as a shareholder would be affected by any order passed by the Tribunal. However, the Tribunal observed that the First Respondent/Applicant is a shareholder of the 9th Respondent Company and associated with the Jatayupra Eco-Tourism Project from its inception. The Tribunal emphasized that under Section 424 of the Companies Act, 2013, it is guided by the principles of natural justice, which necessitate hearing all interested parties. The Tribunal concluded that the First Respondent/Applicant, being a shareholder, is a necessary party to the proceedings to ensure a fair and comprehensive adjudication of the issues. 2. Impleadment and Adjudication: The Appellants argued that the impleadment of the First Respondent/Applicant would lead to protracted litigation and is against the object of the petition under Sections 241 and 242 of the Companies Act, 2013. They cited several judicial precedents, including the Supreme Court's decisions in Kasturi v. Uyyamperumal & Ors and Razia Begum v. Anwar Begum, to support their contention that the First Respondent is not a necessary party. The Tribunal, however, noted that the presence of the First Respondent/Applicant, who is a shareholder, is crucial for the effective and fair adjudication of the issues of mismanagement and oppression alleged in the main Company Petition. The Tribunal highlighted that the impleadment of a party is a matter of judicial discretion and is necessary to avoid plurality of proceedings and protect the interests of all parties involved. 3. Legality of the Impugned Order: The Tribunal evaluated the legality of the impugned order passed by the NCLT, Kochi Bench, which allowed the impleadment of the First Respondent/Applicant as an additional respondent in the main Company Petition. The Tribunal emphasized that any person concerned with the affairs of the company can be arrayed as a party to the proceedings if it facilitates effective, efficacious, just, and fair adjudication. The Tribunal concluded that the First Respondent/Applicant, being a shareholder of the 9th Respondent Company and concerned with the affairs of the company, is a proper and necessary party. The Tribunal affirmed that without his presence, no effective order could be passed in a complete, comprehensive, and satisfactory manner. Therefore, the impugned order of the NCLT, Kochi Bench, was deemed legally tenable. Disposition: The appeal was dismissed, and the impleadment of the First Respondent/Applicant as Respondent No. 23 in the main Company Petition No. 21/KOB/2020 was upheld. The stay application (IA No. 238 of 2021) was also closed.
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