SC: Other company’s share holding in subsidiary co. is no ground to implead parent company

The Hon’ble Supreme Court, on 23rdApril 2019, in the matter of Globe Ground India Employees Union v. Lufthansa German Airlines & Anr. pronounced that even in a subsidiary company which is an independent corporate entity, if any other company is holding shares, this by itself is no ground to order impleadment of parent company.

The Hon’ble Supreme Court observed that:

A necessary party, is one without whom no order can be made effectively. (Para 11)

A proper party is one in whose absence an effective order can be made but whose presence is necessary for complete and final decision on the question involved in the proceedings. (Para 11)

Even in a subsidiary company which is an independent corporate entity, if any other company is holding shares, by itself is no ground to order impleadment of parent company per se. (Para 19)

Copy of judgement: Judgement_24-Apr-2019

-Tushar Kaushik

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