A shareholder does not have a right in the assets of a company as a whole and their interest is limited to participation in profits and distribution of assets in the event of winding up.

( 1 ) IN the other appeal, which was filed by Purna Investment Co. Ltd. , in which it was not a party to the suit or to the Section 397-application, but was only a shareholder in the company concerned, the learned trial judge had not given them leave to intervene in the suit. It may incidentally be mentioned that Puma Investment Co. Ltd. is a company in which Mohonlal Mittal and his group are closely associated and they have the controlling interest. Being aggrieved by the said order of the learned trial judge, this appeal has been filed before this court praying, inter alia, for leave to intervene and oppose the terms of settlement. Various questions have arisen on this aspect, but the main question is, whether a shareholder, as such, has such interest in a company which entitles him to intervene in respect of a suit pending against the company in respect of some of its assets. It is well settled that a shareholder has certain interest. It has been said very clearly that the shareholder's right is to participate, firstly, in the winding up in case a winding up order is made and, secondly, a shareholder has a right of payment of dividend where dividends are declared. In aid of the submission that the shareholder has sufficient interest in the company, the learned advocate for Purna Investment Co. Ltd. seeking to intervene in the appeal, drew our attention to certain observations in Modern Corporate Law by Oleck, vol. 3, Article 1595, at page 668. Our attention was also drawn to Order 1, Rule 10. It was submitted that under Order 1, Rule 10, Sub-rule (2), as the plaintiff had a share in the assets of the company, he was interested when question of bona fide of the settlement has been raised. Our attention was also drawn to certain observations in the decision of the American Supreme Court in Mccabe v. Atchison [1914] (235 US 151) at page 162. On the nature of the right of the shareholder of the company in respect of the assets of the company, reliance was placed on certain observations of the Supreme Court of India in the case of Charanjit Lal Chaudhari v. Union of India [1951] 21 Comp Cas 33 (SC) and our attention was drawn to p. 37. The Supreme Court was considering, in that case, the question of the locus standi of the shareholder in maintaining an application under Article 32 of the Constitution in respect of certain actions taken against the company which affected the assets of the company. The Supreme Court, at p. 37 of this judgment, referred to the decision of the United States of America, namely, decision in the case of Mccabe v. Atchison [1914] (235 US 151), to which, as we have mentioned hereinbefore, our attention was independently drawn. The United States Supreme Court reiterated that injury to the complainant of a legal right justified judicial interference. Reliance was placed on these observations in aid of the proposition that if a legal right was interfered with, which it was contended that the company had in respect of the assets of the company, interference with those legal rights justified right to intervene. The Supreme Court was categorical on the nature of the shareholder's right vis-a-vis the assets of the company in the case of Bacha P. Guzdar v. CIT [1955] 25 Comp Cas 1 ; 27 ITR 1, where the Supreme Court observed that a shareholder acquired rights to participate in the profits of the company, might be readily conceded but it was not possible to accept the contention that the shareholder acquired any right in the assets of the company. A shareholder has no right in the property of the company. The Supreme Court observed that there was nothing in the Indian law to warrant the assumption that a shareholder who bought shares acquired any interest in the property of the company which was a juristic person entirely distinct from the shareholder. The true position of a shareholder was that, on buying shares, an investor became entitled to participate in the profits of the company in