Dr. Subramanian Swamy v. Reserve Bank of India and Others
2000-12-08
N.V.BALASUBRAMANIAN
body2000
DigiLaw.ai
Judgment :- N.V. BALASUBRAMANIAN, J. This application is filed to implead the applicant as a party/respondent in C.P. No. 496 of 2000. The averments made in the affidavit filed in support of the application read as under : The applicant is a Ph.D., in Economics and was a visiting Professor of Economics in the University of Harvard, U.S.A. The applicant was a Union Cabinet Minister during 1990-91 and he filed several public interest litigations. In the affidavit, there is a reference to the steps taken by the applicant in filing a writ petition against the disinvestment of shares of the SPIC group held by TIDCO in favour of a few individuals and the order passed in the writ petition as well as in the writ appeal. According to the applicant, M.C.C. Finance Ltd. is a part of the group of companies of the late M. A. Chidambaram. In the affidavit, there is also a reference to the default committed by M.C.C. Finance Ltd. in the repayment of principal and interest to the depositors and the appointment of a Special Officer by the Reserve Bank of India with a view to monitor the progress of recoveries due to the company and disposal of the amount due to the depositors. The applicant also referred to the order of this court dated August 21, 2000, with reference to the appointment of one Srinivasan as an administrator and serious allegations have been made against the appointment of Mr. S. Srinivasan as an administrator and prayed for the removal of Srinivasan as the administrator. The applicant has also stated that he filed this application to implead himself as a party/respondent to protect the interest of the depositors of M.C.C. Finance Ltd. and he also filed two other applications, one questioning the appointment of Mr. S. Srinivasan as an administrator and the other restraining the said Srinivasan from functioning as an administrator of M.C.C. Finance Ltd. Meanwhile, the said Srinivasan tendered his resignation and in his place, another administrator was appointed and therefore, the applications filed questioning the appointment of Srinivasan as an administrator and restraining the said Srinivasan from functioning as the administrator have become infructuous and accordingly, both the applications have already been dismissed.Mr. G. Rajagopalan, learned counsel appearing for the applicant submitted that the applicant is a necessary and proper party.
G. Rajagopalan, learned counsel appearing for the applicant submitted that the applicant is a necessary and proper party. He referred to the earlier writ petition filed by the applicant against the disinvestment of shares of SPIC held by TIDCO in favour of a few individuals and submitted that the applicant is having vital information regarding diversion of funds of M.C.C. Finance Ltd. and if he is impleaded as a party/respondent, it would facilitate him to furnish the information known to him without filing independent applications. Learned counsel also submitted that the applicant is interested in the welfare of the depositors of M.C.C. Finance Ltd. and since he has the capacity to gather information and he is in possession of important information relating to the diversion of funds, in the interest of general public and to protect the interest of various depositors, the applicant should be impleaded as a party/respondent in the company petition. Mr. Arvind P. Datar, learned senior counsel submitted that the applicant is not a necessary party to the company petition. Learned senior counsel submitted that the applicant is neither a depositor, nor a contributory and if the applicant is having important information relating to the diversion of funds of M.C.C. Finance Ltd., it is always open to him to divulge the same either to the court or to the administrator or the provisional liquidator and hence, the application should be rejected. I have carefully considered the submissions of Mr. G. Rajagopalan, learned counsel appearing for the applicant and Mr. Arvind P. Datar, learned senior counsel appointed by the court. Rule 6 of the Companies (Court) Rules, 1959, provides that the practice and procedure of the court and the provisions of the Code of Civil Procedure as far as applicable shall apply to the proceedings under the Companies Act. In other words, the provisions of the Code of Civil Procedure would apply as far as possible keeping in view the nature of the proceedings under the company law. Under rule 9 of the Companies (Court) Rules, 1959, the court has inherent power to pass any such directions or orders as are necessary to meet the ends of justice or to prevent abuse of the process of the court.Admittedly, the applicant is neither a depositor in M.C.C. Finance Ltd., nor is he a contributory.
Under rule 9 of the Companies (Court) Rules, 1959, the court has inherent power to pass any such directions or orders as are necessary to meet the ends of justice or to prevent abuse of the process of the court.Admittedly, the applicant is neither a depositor in M.C.C. Finance Ltd., nor is he a contributory. His claim is that he has valid materials regarding the diversion of funds by M.C.C. Finance Ltd. and hence, he should be impleaded as a party/respondent in the company petition. His plea that the applicant has initiated proceedings against the disinvestment of shares held by TIDCO in favour of a few individuals has no bearing in considering the question whether the applicant should be impleaded as a party/respondent in the company petition. Mr. G. Rajagopalan, learned counsel for the applicant submitted that since the applicant is having certain vital information regarding diversion of funds of M.C.C. Finance Ltd. in favour of the group of companies headed by Mr. A. C. Muthiah and since M.C.C. Finance Ltd. is also one of the companies falling under the group, the applicant should be impleaded as a party which will facilitate him to disclose the information he is having in his possession. I am of the view that the holding of important information regarding disinvestment of funds by M.C.C. Finance Ltd. is not a ground to hold that the applicant should be impleaded as a party to the company petition. If such a plea is accepted, it will open the floodgates and a number of persons would come before this court claiming that they have certain information and that they should also be impleaded as a party in the company petition. Further, if such a course is adopted, it will hamper the progress of the proceedings, instead of early disposal of the same. Mr. G. Rajagopalan, learned counsel for the third party/applicant submitted that the applicant is opposing the winding up of the M.C.C. Finance Ltd. and if the company is wound up, the depositors may not be in a position to realise the full amount invested by them. I am of the view that it is always open to the applicant to raise his objections against the winding up of the company when the court calls for objections after the publication of the petition for winding up in the newspapers.
I am of the view that it is always open to the applicant to raise his objections against the winding up of the company when the court calls for objections after the publication of the petition for winding up in the newspapers. The above submission of learned counsel for the applicant is also self-destructive in the sense that if the petition for winding up is opposed, and his objection is sustained, this court will have no jurisdiction to deal with the matter and give necessary directions for the repayment of moneys to the depositors. Further, this court has already appointed an administrator and a chartered accountant has also been appointed to conduct the investigation on the affairs of the company and a provisional liquidator has been appointed to realise all assets of the company. Further, this court is in seisin of the matter and in this situation, I hold that the application to implead the applicant as a party/respondent in the company petition is not entertainable in law.The Supreme Court in National Textile Workers' Union v. P. R. Ramakrishnan, has held that the workers of a company against whom winding up proceedings have been initiated are entitled to appear and be heard both before the winding up petition is admitted and the workers are entitled to appear and be heard on the application for appointment of provisional liquidator. In so far as the applicant is concerned, he is neither interested in the properties of the company, nor is he representing the depositors. The depositors are represented by the Depositors Welfare Association. Though Mr. G. Rajagopalan, learned counsel claims that the Depositors Welfare Association represents only 2, 000 odd depositors, it does not mean that the applicant represents the other depositors. The only ground on which the applicant sought to implead himself as a party is that he has some information regarding diversion of funds of M.C.C. Finance Ltd. and he is capable of providing the information regarding such diversion. But the mere possession of such information is not sufficient to hold that the applicant is interested either in favour of the winding up of the company or against the winding up of the company.
But the mere possession of such information is not sufficient to hold that the applicant is interested either in favour of the winding up of the company or against the winding up of the company. If the applicant has any information regarding diversion of the funds, it is always open to him to furnish the same to the court and it is not necessary that the applicant should be impleaded as a party to disclose the information regarding diversion of the funds of M.C.C. Finance Ltd. It is well settled that a person may be added as a defendant in a suit though no relief is claimed against him, provided his presence is necessary for the complete and final decision on the question involved in the suit and such person can be called a proper party. Applying the principle, the presence of the applicant is not necessary for the complete and final decision to be arrived at on the questions involved in the company petition. In so far as the question of diversion of the funds by the company is concerned, the presence of the applicant is still not necessary as the information he wishes to furnish can be furnished without being impleaded as a party in the company petition. It must be remembered that this court is monitoring the entire winding up proceedings and in this situation, I hold that the applicant is neither a necessary nor a proper party in the company petition. Consequently, the application to implead the applicant as a party in the company petition is liable to be dismissed and accordingly, it is dismissed. No costs.