Alleged share transferees are proper parties when their status affects the maintainability of a company petition.

Respondents 1–3 filed a company petition before the NCLT, Kochi Bench, alleging mismanagement of the fourth respondent company.

The company contended that shares held by respondents 2 and 3 had been transferred to third parties.

After the NCLT directed production of documents relating to the transfers, the company produced share-transfer forms identifying the petitioners as transferees.

Respondents 1–3 then sought to implead the petitioners; the petitioners appeared and denied executing the forms, alleging fabrication.

The NCLT dismissed the impleadment application, finding that no relief was sought against the petitioners, the pleadings had not been amended, and the application was delayed.

The petitioners challenged that order under Article 226.

1. Whether the High Court could exercise jurisdiction under Article 226 despite the availability of an appeal under Section 421 of the Companies Act, 2013, where the petitioners alleged a violation of natural justice.

2. Whether the petitioners were proper parties to the company petition, and whether the NCLT was justified in refusing their impleadment on the grounds that no relief was sought against them and that the application was delayed.

Section 421 of the Companies Act, 2013 provides an appellate remedy against NCLT orders, but the availability of an alternative remedy does not ordinarily bar Article 226 jurisdiction where, among other recognised exceptions, there is a violation of natural justice; the Court relied on Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd., (2021) 9 SCC 657.

Applying Order I Rule 10 of the Code of Civil Procedure, 1908, and Kasturi v. Iyyamperumal, (2005) 6 SCC 733, the Court stated that impleadment may be allowed where a party is necessary for effective adjudication.

A proper party is one whose presence enables the court to completely, effectively and properly adjudicate the issues, even if no decree is sought for or against that party, as stated in Vidur Impex & Traders (P) Ltd. v. Tosh Apartments (P) Ltd., (2012) 8 SCC 384.

The share transfers were relied on to challenge the original applicants’ standing in the company petition.

The transfer forms produced pursuant to the NCLT’s order identified the petitioners as transferees, and the petitioners disputed the forms’ authenticity.

Their presence was therefore relevant to effective adjudication of the preliminary objection concerning the applicants’ shareholding, even though no independent relief was claimed against them.

The Court also noted that the impleadment request followed the production of the forms, rather than unexplained inactivity from 2022 onward.

In those circumstances, the petitioners were proper parties, and the NCLT’s refusal to implead them impeded consideration of the dispute and violated natural justice.

It set aside the NCLT’s order dated 2 April 2026 and allowed the impleadment application, IA(C/Act)/12/KOB/2026, in the pending company petition.