General rule in civil suits
In normal civil suit, legal representatives of deceased party must be impleaded. If liability is personal like criminal act, it dies with person. If liability is civil, legal representatives can be brought on record. This rule is well settled. But proceeding under section 397/398 of Companies Act 1956 stands on different footing because object is protection of company and all shareholders, not just parties.
Why 397 398 is different
In 397/398, one party wants urgent relief and other party tries to delay with technical objections. Impleadment issue is often used for delay. Law is settled that CLB and Company Court follow object of Companies Act. They look at interest of persons not before them also. Many precedents show CLB considered interests of those not actually before it. So strict civil rule is not applied mechanically.
Impleadment of deceased petitioner vs respondent
Impleading legal representatives of deceased petitioner is different from impleading legal representatives of deceased respondent. For respondent, nature of liability alleged is checked as in civil law. For petitioner, facts and section 399 qualification matter. Section 399 says who can approach CLB. In some cases single shareholder files. Then legal representatives must come on record to continue. But when there are many shareholders, death of one petitioner may not affect maintainability under 399. Petition can continue.
Delhi high court view in jawahar singh case
Delhi High Court in Jawahar Singh Bikram Singh Pvt Ltd Vs Smt Sharda Talwar 1974 44 Com Cases 552 held it is not necessary that ordinary legal representatives be brought on record. For 397/398, members already constructively before court can continue. Widow who gave consent was transposed as petitioner in place of husband. Court focused on substance, not form.
Madras high court view in narayanan case
Madras High Court in L.RM. K.Narayanan and another Vs Pudhuthotam Estates Ltd 1992 74 Com Cases 31 said petition need not be dismissed just because original petitioner died. 397/398 is representative proceeding. Section 399(3) allows member to apply on behalf of all. Rule 9 of Companies Court Rules 1959 gives inherent power to transpose parties in interest of justice. Court can consider merits without dismissal.
Role of clb and company court
These judgments make it clear. CLB and Company Court are not like ordinary civil courts. Object of Companies Act is paramount. They protect company, minority and public interest. Technicality of impleadment should not defeat purpose. Board has power to continue proceedings if other petitioners are constructively before it.
Conclusion
Impleadment legal representatives 397 398 company law board 2010 shows flexibility. In civil suits procedure is rigid. In 397/398, CLB looks at object and justice. If petition can continue with other members, death of one petitioner should not kill case. This approach makes 397/398 effective remedy.
