TMI Blog2016 (8) TMI 1303X X X X Extracts X X X X X X X X Extracts X X X X ..... same. If application is not allowed, he will not suffer any prejudice in the event of reliefs as prayed for in the company petition being granted or not. In the present case, the applicant has sought to assert a right to obtain the petitioner's shares in the company on the basis of the memorandum of understanding. This being a private dispute under an independent contract between the shareholder and prospective purchaser of his shares in company, which is not a dispute which comes under the purview of the company petition filed under sections 397 and 398 of the Companies Act, 1956. Thus, it is clear that the applicant is neither a necessary party nor a proper party, and whose presence in the company petition is not essential for a comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereof. 3. The applicant in the said Company Application No. 306 of 2016 states that they have entered into a memorandum of understanding dated 29 September, 2009, for acquisition of 2,08,250 fully paid-up equity shares of the total face value of ₹ 2,08,25,000 owned by the petitioner in Company Petition No. 370 of 2010 in respondent No. 1-company with right of allotment or further allotment and the applicant will purchase such shares for a valuable consideration. 4. However, in 2013, Adbhut Vincom P. Ltd. had instituted a Title Suit No. 172 of 2013 (Abdhut Vincom (P) Ltd. v. Libra Retailers (P) Ltd.) before the Civil Judge (Senior Divisional, at Ranchi, relating to the memorandum of understanding dated 29 September, 2009, claimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod stipulated in the memorandum of understanding or within the period, as extended by the petitioner, i.e., 30 January, 2010. In the circumstances, the petitioner was compelled to terminate the memorandum of understanding. 9. The question as to whether the applicant should be allowed to intervene or be impleaded is dependent on the possibility of any prejudice being suffered by-(a) locus standi; (b) prejudice be suffered by it; and (c) its right to agitate any grievance with regard to the memorandum of understanding. 10. As not a single share was transferred to the applicant and the applicant does not own a single share in the company, it has no locus and consequently has no right to participate in the company petition, which has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;ble Supreme Court laid down the law that 'to ascertain the necessary and proper party in the proceedings, the law is well-settled. A necessary party is one without whom no order can be made effectively; a proper party is one in whose absence an effective order can be made but whose presence is necessary for complete and final decision on the question involved in the proceeding'. 14. In the case of Vidur Impex and Traders (P) Ltd. v. Tosh Apartments (P) Ltd. (2012) 4 Comp LJ 433 (SC) : (2012) 8 SCC 384, the hon'ble Supreme Court has laid down the broad principles which should govern disposal of an application for impleadment. These are as: The court can, at any stage of the proceedings, either on an application made b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses, it is clear that application for impleadment can only be allowed, if a party is a necessary party without whom no order can be made effectively or a proper party in whose absence an effective order cannot be made and whose presence is necessary for complete and final decision on the question involved in the proceeding. In this case, the applicant has applied for impleadment in a company petition filed under section 397/398 under the Companies Act, 1956. The action being a shareholder action, a non-shareholder and a non-member cannot seek to assert any right or to agitate any grievance in the same. If application is not allowed, he will not suffer any prejudice in the event of reliefs as prayed for in the company petition being granted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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