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Judgment
This is an application filed by one Mr. Vineet Khosla, claiming as a member and director of the petitioner No. 1-company, for following reliefs:
i. Exercising power under Order I, Rule 10(2) of the Code of Civil Procedure, implead the Applicant, Mr. Vineet Khosla, as Petitioner No. 7 to the
present company petition. ii. Pass ex parte orders as prayed for above.
iii. And pass such other order or further order or orders as this Hon'ble Tribunal may deem fit and proper under the circumstances of the case.
Before going into the merits, the provisions of Code of Civil Procedure needs to be read and for convenience are reproduced herein.
Order I Rule 10(2) :
Court may strike out or add parties:-
The Court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to
the Court to be just, order that the name of any party improperly joined, whether as plaintiff or defendant, be struck out, and that the name
of any person who ought to have been joined, whether as plaintiff or defendant or whose presence before the Court may be necessary in
order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the suit, be added.
Reliance is placed by the applicant of Order I Rule 10(2) of Code of Civil Procedure which empowers to order at any stage of the proceedings,
with or without application of either party, to strike off the name of any party improperly joined (which is not the case here) and add name of any
person who ought to have been joined (in the present case name of the applicant as Petitioner No. 7) or whose presence before the Court may be
necessary in order to enable the Court to effectually and completely adjudicate all questions 'involved in the suit (in present case company petition no.
144 of 2016).
The applicant has mentioned the following reasons in the application to implead him as Petitioner No. 7 in the company petition mentioned above :-
(a) 30,000 equity shares allotted to the applicant in December 2007, were restored by order of Hon'ble Supreme Court in May, 2014.
(b)100 shares are transferred to the applicant by petitioner No. 2 on 02.11.2020.
(c) The applicant qualifies as a member of the petitioner No. 1-company, as per Section 2(55) of the Companies Act, 2013.
(d)Accused are liable to be punished of malicious intentions causing great harm to the petitioners.
(e) Rights of the petitioners to amend pleadings were preserved.
(f) It is further stated that the applicant is aggrieved by all acts referred to in Company Petition and seeks to agitate statutory relief by seeking
impleadment in the Company Petition as Petitioner No. 7.
After hearing both the sides, the parties sought and were granted liberty to file written submissions.
In the written submissions the applicant argued as follows:
i. Applicant is a necessary party, as the issuance/transfer of shares to the applicant and the directorship of the applicant were upheld as lawful, by the
orders of the Court. Hence, any outcome of this petition will affect the rights of this applicant.
ii. The applicant, in order to counter the arguments of the respondents made following submissions:-
a) The applicant referred to judgments and orders passed at different stages by various Courts in CP No. 114/2007 reproducing the observations of
the Courts with respect to membership/directorship of the applicant proving that the applicant being member and director of the petitioner No. 1-
company as on date.
b) Denying that the sole purpose of this application is to obstruct application filed by respondents under Section 8 of Arbitration and Conciliation Act.
c) Controverting the stand of the respondents that the application is time barred relying on the wordings of Order 1 Rule 10(2) beginning with
the Court may at any stage of the proceedings……â€
d) Requesting the Court be pleased to add Mr. R. K. Garg, also as a petitioner no. 8, as he is also a member and director of the petitioner No. 1-
company, on the apprehension that Mr. Garg may also in future come before the Court for the same relief of his impleadment as a party as a
petitioner No. 8 in company petition No. 144/2016, so as to avoid further proceedings and delay.
The applicant has filed combined written submissions for CA No. 731/2020 filed by Mr. Vineet Khosla for impleadment as petitioner No. 7 in CP No.
144/2016
and
written submissions for CA No. 553/2020 as a respondent in that application, filed by Mr. Vikram Bakshi (respondent No. 2 in company petition)
Under Section 8 of the Arbitration and Conciliation Act for referring the parties to Arbitration.
The written submissions of respondent No. 2 are as follows:
i. The arguments of these respondents are based on the facts that the status of the applicant as a shareholder/director is to be decided in view of the
various orders passed by the Courts which were challenged time and again and cross litigations filed from year 2007 onwards. The numerous issues of
deciding the status of the parties in this petition, like members and/or directors of the petitioner No. 1-company, the legality of the meetings held of
petitioner No. 1-company qua the parties claiming to be in control and other issues were the points agitated in company petition No. 114/2007 which
admittedly was allowed to be withdrawn by the petitioners vide order dated 07.02.2020. Thus, the issues as mentioned above are again re-filed in the
present petition by the petitioner in 2016, where the reply has not yet been filed by any respondents.
ii. It is highlighted that Hon'ble National Company Law Appellate Tribunal had directed in order dated 12.04.2017 while hearing of one of the appeals
in CP No. 114/2007 that no fresh application would be filed. The respondents submit that disregarding the directions of the Hon'ble National Company
Law Appellate Tribunal, the petitioners' group is indulging in filing various frivolous applications to stall the hearing of main CP No. 144/2016.
iii. The claim of Mr. Vineet Khosla as a shareholder and/or a director is yet to be decided, in view of the various issues pending in the present
company petition, Hence, at this stage, application cannot be allowed.
iv. The application being time barred under Section 433 of the Companies Act.
Knowing the background of the petition filed in the year 2007 and another petition filed in the year 2016, both filed by the petitioner, we observe as
under:
i. The present petition is filed in the year 2016 and today almost after four years, the application is to add one party claiming to be shareholder/director
as petitioner, without any justification or reasons to show that how without adding the name of the applicant in the petition filed by the company along
with its shareholders/Directors under Section 241-242 of the Companies Act for the acts of oppression and mismanagement, the prejudice will be
caused if, the applicant is not allowed to be impleaded or
it is necessary for proper adjudication of the petition.
ii. Further, there is no evidence or documents placed on record to support or prove that non-inclusion of name of the present applicant will prejudice
the adjudication of petition filed under Section 241-242 of the Companies Act.
iii. The application is not barred by limitation as Order I, Rule 10(2) starts with the wordings :
The Court may at any stage of the proceedings….â€
We are in the agreement with the arguments of the applicant that the Court has ample power to delete or join the name of parties at any stage of the
proceedings, moreso, petition has not travelled a long way.
iv. The necessity of joining the applicant as petitioner No. 7 on the ground only that he is a member/director is not acceptable, specially in the
proceedings under Section 241-242 of the Companies Act, where any member and/or director, only on the ground of his or her membership, obtains
right to join proceedings under Section 241-242 of the Companies Act, 2013. No specific acts or averments of oppression and mismanagement are
made with respect to the proposed petitioner No. 7-applicant herein. The petition under Section 241-242 filed by any person qualifying under Section
244 not only decide the rights of the members (even though they are not party to proceedings) but also it decides the rights of parties in rem.
v. Present petition is filed by the company along with members/directors of petitioiner No. 1-company, which generally is not the case. Thus the
interest of all members will be taken care of, albeit without being joined in the proceedings. If the arguments of the applicant are accepted that he has
qualified to be impleaded as a party in proceedings under Section 241-242 of the Companies Act, 2013, merely because he is a member of the
company as described under Secion 2(55) of the Companies Act, 2013, then every member may need or file such application, at any stage of the
proceedings and the main petition may not see the light of the day ever.
vi. There is not even a whisper about any instance/incident/any document to show that non-joinder of the present applicant will prejudice the rights of
the proposed petitioner or will prejudice the adjudication of the petition. The petition is filed in the year 2016 whereas the impleadment is filed in 2020
(though not barred) specially when applicant claims that his membership and/or directorship are of 2007-08 and after rounds of litigations are upheld in
year 2014. So at the time of filing of present petition in 2016, the same could have been considered to make present applicant as a party or not.
We do not find any merit in the application.
We further observe that the present petitioner No. 2 who is the acting force behind this petition and litigations arising therefrom, has been filing
various applications at every step, in spite of the opinion formed by the Hon'ble Apex Court and Hon'ble National Company Law Appellate Tribunal,
directing to restrain from filing frivolous applications.
The petitioner No. 2 is a Member of the Bar and a practising Advocate. We expect that the observations of the Hon'ble Apex Court and Hon'ble
National Company Law Appellate Tribunal will be taken serious note of and no further applications will be filed which may compel us to put heavy
cost.
The application fails and is rejected.
CA No. 731/2020 is disposed of in terms of the above order.