Deceased’s Legal Representative Can Participate in Sec. 241/242 Proceedings without becoming member of company

Ambadi Investments Limited Vs Valli Arunachalam (NCLAT)

NCLAT Chennai held that there is `no Law’, which specifically envisages that unless, the `Legal Representatives’, become `Members’ of a `Company’, the `Legal Representatives’, of the `Deceased’, shall not become a `Party’, to the `Proceedings’, under Section 241 and 242 of the Companies Act, 2013.

Facts- The Appellant has filed the instant Comp. App. before this Tribunal on being dissatisfied with the impugned order passed by National Company Law Tribunal.

Notably, after the demise of the original 1^st Petitioner Mrs. M.V. Valli Murugappan, the 1,25,952 shares held by the 1^st Petitioner were transmitted to the 1^st and 2^nd Applicant. Thereafter, the 1^st and 2^nd Applicant, has transferred 62,581 shares each respectively on 04.03.2022 in favour of M.V. Murugappan (HUF), the Second Respondent herein who is the 2^nd Petitioner in the main Company Petition. Thus, by effect of the said transfer, the shareholdings of the 1^st Applicant stand reduced to 250 shares and the shareholding of the 2^nd Applicant stands reduced to NIL. As such the 1^st Applicant does not hold any shares in the 3^rd Respondent Company.

The Appellant, brings it to the notice of this `Tribunal’, Mrs. M.V. Valli Murugappan, died on 21.01.2022 and M.V. Murugappan, Hindu Undivided Family, sought to invoke the jurisdiction of the `National Company Law Tribunal’ (u/s. 241 and 242 of the Companies Act, 2013). Further, for want of requisite qualification to sustain a `Company, they filed a `Waiver Application’ u/s. 244 of the Act, praying for `Waiver’ of the `Requirements’, specified u/s. 244 (1)(a) of the Act.

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