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2017 (3) TMI 1393 - Tri - Companies LawPermission of substitution of petitioner - allegation of huge mismanagement against the company - allegation of huge mismanagement - need for having requisite shareholding - Held that:- No difficulty in holding that the proceeding under consideration does not abate on the death of petitioner No. 1 in 2013. Rather, this court has a duty cast upon it to ensure that such a representative proceeding is carried forward to its logical conclusion and if necessary, same needs to be done by impleading Parties who are similarly situated with the petitioner in such proceeding. In that view of the matter, three cannot be any abatement of the petition on the death of the petitioner No. 1. In such a scenario, other questions, viz. whether the applicants could show sufficient ground for not preferring substitution petition in time or whether the right to sue survive in favour of surviving petitioners etc. become wholly redundant. But then, on the face of (he materials on record, it needs to be concluded that conduct of the surviving petitioners in seeking substitution of the deceased petitioner by his legal representatives is found to be far from satisfactory. In those factual backgrounds, let us consider the contention that the petition seeking substitution is required to be rejected since on the date of filing of substitution application, the applicants did not have requisite share qualification to file the company petition in terms of law laid down in Sec. 399 of the Act of 1956. In that connection, we can peruse gainfully the decision in Rajahmundry Electric Supply Corporation Ltd. (1955 (12) TMI 21 - SUPREME COURT OF INDIA)as held that validity of the petition must be judged on the facts as they were at the time of its presentation, and a petition which was valid when presented cannot, cease to be maintainable by reason of events subsequent to its presentation. Coming back to our present case, we have found that the shareholding of the predecessor of applicants in the company was in decimals. But then, the materials on record prima facie show that the original petitioners had the requisite share qualification to file the petition u/s. 397/398 of the Act, 1956. This prima facie shows that the petition was validly filed by the original petitioners and therefore, only for applicants not having requisite share qualification to file the petition on their own on the date of filing of application under consideration, the applicants cannot be debarred from having their names substituted in place of deceased petitioner No. 1 in the company petition. Resultantly, the application is allowed.
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