Impleadment Not Allowed Without Pleadings Or Relief Against Proposed Parties: NCLT Kochi

The National Company Law Tribunal (NCLT) Kochi has held that additional parties cannot be impleaded in company law proceedings in the absence of foundational pleadings and specific reliefs against them, underscoring that such a move would impermissibly expand the scope of the dispute.

A coram of Judicial Member Vinay Goel said, “this Adjudicating Authority is of the considered opinion that an application for impleadment cannot be allowed in the absence of any proposed amendment to the pleadings or any substantive or consequential relief sought against the proposed Respondents in the main Company Petition.”

The three applicants, shareholders of Tharakan Web Innovations Pvt Ltd, had filed a company petition under Sections 241 and 59 of the Companies Act alleging oppression, fraud, and unlawful transfer of their shares. They claimed that 117 shares belonging to them were transferred to third parties without their consent.

Pursuant to earlier directions of the tribunal, the respondents produced documents to show that the shares had been transferred in favour of certain individuals. The applicants denied executing any such transfer documents, alleging that the documents were forged and fabricated. They also disputed the alleged board meeting approving the transfers, stating that its minutes were filed later to legitimise the transactions.

The applicants further alleged that the shares were subsequently transferred to another entity in violation of their pre-emptive rights, and sought impleadment of the alleged beneficiaries of these transactions as additional respondents.

Opposing the plea, the respondents contended that the application was time-barred and intended to delay proceedings. They argued that the transfers were valid, had already been disclosed in a counter statement filed in 2022, and that the applicants were aware of them for several years.

Examining pleadings in a writ petition filed before the Kerala High Court, the Tribunal noted that one of the applicants had described himself as “was one of the promoter directors holding equity share capital,” observing that the use of the past tense did not clearly assert continued shareholding at the relevant time.

The tribunal also noted that the pleadings indicated that key managerial persons had already sold their shares and exited the company, suggesting that the shareholding of those in control had undergone transfer.

On the core issue, the tribunal found that no relief had been sought in the main company petition against the proposed respondents. It reiterated that a party can be impleaded only if it is a necessary party, without whom no effective order can be passed, or a proper party whose presence is essential for complete adjudication, and that such determination must be based on the pleadings and reliefs sought.

Referring to settled law, the tribunal emphasised that courts cannot grant relief beyond the pleadings and that impleadment cannot be used to introduce a new case without seeking amendment.

It further observed that although the applicants sought to implead the proposed respondents as beneficiaries of the share transfers, they had neither challenged the validity of those transfers in the main petition nor sought any amendment or consequential relief such as cancellation of the transfers.

“Mere assertion that certain persons are beneficiaries of alleged transactions, without a clear cause of action and relief against them, cannot justify their addition as parties. Permitting such impleadment would unnecessarily enlarge the scope of the proceedings and convert the lis into a wider enquiry not contemplated in the original pleadings,” the tribunal held.

The tribunal also noted that the alleged transfers had already been disclosed in 2022, but the application for impleadment was filed only in 2026 during the hearing, with no satisfactory explanation for the delay.

Accordingly, the tribunal dismissed the application.

For Applicants: Advocate Harikumar G Nair

For Respondents: Advocate Issac Thomas and Kevin Thomas