Balasubramanian - In this petition filed under section 397/398 of the Companies Act, 1956 ('the Act') alleging acts of oppression and misman-agement in the affairs of Chancellor Capital Finance Limited ('the compa-ny'), the respondents have filed an application CA No. 143 of 1999 seeking for dismissal of the petition on the ground that the entire petition revolves around an undertaking between the petitioner and Orkay Industries Limited (Orkay) which is now under winding up and as such the official liquidator, Bombay should have been impleaded as a party after obtaining leave from the High Court which the petitioner has railed to do resulting in non joinder of a necessary party.

2. Shri Mehta, Advocate for the respondents initiating arguments on the application submitted that the company is a subsidiary of Orkay, which holds 55 per cent shares in the company while the petitioner holds the balance 45 per cent. According to the petitioner, it became a shareholder of the company by virtue of certain representations made to the petitioner through a written proposal made by the respondent No. 5 being the Chairman of Orkay. According to the proposal, the company was to utilise the funds generated by issue of snares in investment activities and advisory services and that the allegation of the petitioner is that the funds were utilised for purposes other than what was represented to him and as such this petition has been filed alleging acts of oppression and misman-agement. He also referred to Annexure 'G' and Annexure 'H' in the petition which are agreements between the petitioner and Orkay by which Orkay was to purchase the shares held by the petitioner as indicated in those agreements. Since it is the case of the petitioner that Orkay failed to take steps in pursuant to the said agreement and that the prayer is for specific performance of the said agreement, Orkay is a necessary party to the proceedings. Since Orkay is ordered to be wound up, the petitioner should seek leave of the High Court to proceed with the petition. In view of this, the petition should be dismissed in limine.

3. Shri Ramachandran, Advocate for the petitioner submitted that, even though a narration as to how the petitioner became a shareholder of the company by representation by Orkay, has been given in the petition enclosing the agreements entered into with Orkay for sale of the shares of the petitioner to Orkay, yet, the petitioner has not sought for any relief against Orkay or has sought for specific performance of the agreements. The various representations made to the petitioner were by not only by Orkay but other respondents. In the petition, allegations have been made in regard to siphoning/misapplication of the funds of the company, which the respondents are bound to answer. Since the petitioner holds 45 per cent shares in the company, he has every right to ensure that the company is managed in accordance with law and on sound business principles. Since no relief has been sought against Orkay, it is not necessary that Orkay should be made a party to the proceedings and that its nonjoinder cannot be fatal to the petition.

4. We have considered the arguments of the counsel. Even though the counsel for the respondents submitted that the petitioner has sought for specific performance of the agreements between the petitioner and Orkay, we do not find any such prayer in the petition. Allegations have been made not only against Orkay but also against the respondent Nos. 2 to 4 who are directors of the company. The representation at Annexure 'C' which is alleged to have been the basis on which the petitioner invested funds, has been issued in the name of the company. The company is not a fully owned subsidiary of Orkay. The petitioner holds 45 per cent shares in the company. Since the allegations in the petition relate to the affairs of the company and since no relief has been sought against Orkay, we do not consider it necessary that Orkay should be made a