Ruling on the imam standing on the far left of the musalla and ruling on the worshippers near him standing on his right

Firstly: 

The Sunnah is for the imam to stand in front of the
worshippers, because this is what is proven in the Sunnah.

Ibn Abi ‘Umar (may Allah have mercy on
him) said: The Sunnah is for the worshippers to stand behind the imam. If
there are a number of worshippers, the Sunnah is for them to stand behind
the imam, whether they are men or women, because the Prophet (blessings and
peace of Allah be upon him) used to lead his companions in prayer and they
stood behind him. When Jaabir and Jabbaar stood on his right and left, he
pushed them until they were behind him, even though they were two.
Similarly, Jaabir narrated: I travelled with the   Prophet (blessings and
peace of Allah be upon him) on a campaign. He stood up to pray, and I did
wudoo’, then I came and stood on his left. He took me by the hand and pulled
me around until he made me stand on his right. Then Jabbaar ibn Sakhr came
and stood on his left, and he took both of us by the hand and made us stand
behind him. Narrated by Abu Dawood. This is also the view of ‘Umar, ‘Ali,
Jaabir ibn Zayd, al-Hasan, Maalik, ash-Shaafa‘i, and ashaab ar-ra’y.

End quote from ash-Sharh al-Kabeer (2/61) 

In the answer to question no. 66017
we explained that it is mustahabb for the imam to stand in the middle of the
row.  

Secondly: 

If the worshippers stand on the right of the imam, their
prayer is valid, but if the imam stands in the middle of the row and they
stand behind him, that is preferable. 

Al-Bahooti (may Allah have mercy on him) said: If the
worshippers stand with the imam, on his right, or they stand on both sides
of him, that is valid.

End quote from Kashshaaf al-Qinaa‘ (1/486) 

Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) said: It
is valid for them to stand with the imam, on his right or on both sides of
him. That is, if there are two or more worshippers, they may stand on his
left or on either side of him, one on his right and the other on his left.
That is preferable to them being on his right only, because ‘Abdullah in
Mas‘ood (may Allah be pleased with him) stood between ‘Alqamah and al-Aswad,
and he said: This is what I saw the Prophet (blessings and peace of Allah be
upon him) do. So if there are two worshippers or more with the imam, there
are three ways they may stand:

1.behind him, which
is the best

2.on either side of
him

3.on his right hand
side only.

End quote from ash-Sharh al-Mumti‘ (4/264) 

Thirdly: 

If they pray on his right, and it is possible for the imam to
step forward, even a little bit, to indicate who the imam is, and so that no
one will stand ahead of the imam, this is the Sunnah; the evidence for it
has been mentioned above. 

Al-Bukhaari (may Allah have mercy on him) included a chapter
in his Saheeh entitled Chapter: He should stand on the right of the
imam, in line with him, if they are two. 

Imam Badr ad-Deen al-‘Ayni al-Hanafi (may Allah have mercy on
him) said: 

If they are two, i.e., the imam and the one who is praying
behind him – and it is limited to that, because if it is two worshippers
with an imam , the ruling is that the imam should step forward.

End quote from ‘Umdat al-Qaari Sharh Saheeh al-Bukhaari
(8/404) 

But if they form a straight line with the imam, their prayer
is still valid, and is not makrooh, because there is an excuse. 

Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) was
asked: 

Sometimes we are in the trench and it is narrow, so the imam
cannot stand in front of us to lead the prayer; rather we make him stand in
the middle of the first row. Is that valid? If it is not valid, then where
is the correct place for him to stand? Please note that if we pray outside,
we may be shelled and die. 

He (may Allah have mercy on him) replied: 

It is Sunnah for the imam to stand in front of the
worshippers, but if that is not possible because the place is cramped, then
there is nothing wrong with him standing with them in the middle of the row.

End quote from Majmoo‘ Fataawa wa Rasaa’il ash-Shaykh
(15/185)

And Allah knows best.