Case Note & Summary
The present appeal arises from a Company Petition No. 149 of 2012 filed under Sections 397 and 398 of the Companies Act, 1956, alleging oppression and mismanagement in the affairs of the respondent company. The appellants, who are the original respondents in the company petition, sought ad-interim relief to restrain the respondents from alienating, transferring, or creating third-party rights in the suit property. The court, after hearing the parties, found that the balance of convenience was in favor of granting the relief as the subject matter of the petition was the property itself. The court noted that the petitioners had made out a prima facie case and that irreparable loss would be caused if the relief was not granted. Consequently, the court allowed the appeal and granted ad-interim relief in terms of prayer clause (a), directing that the respondents be restrained from alienating, transferring, or creating third-party rights in the suit property until the final disposal of the company petition. The court also directed that the appeal be listed for final hearing on a peremptory basis.
Headnote
A) Company Law - Oppression and Mismanagement - Interim Relief - Sections 397, 398 Companies Act, 1956 - The court considered whether to grant ad-interim relief restraining alienation of property pending final disposal of the company petition alleging oppression and mismanagement - Held that the balance of convenience was in favor of granting relief to protect the subject matter, as the petitioners had made out a prima facie case and would suffer irreparable loss if relief was not granted (Paras 1-5).
Issue of Consideration
Whether ad-interim relief in terms of prayer clause (a) should be granted to restrain the respondents from alienating, transferring, or creating third-party rights in the suit property pending the hearing of the Company Petition.
Final Decision
Appeal allowed. Ad-interim relief granted in terms of prayer clause (a) restraining respondents from alienating, transferring, or creating third-party rights in the suit property until final disposal of the company petition. Appeal to be listed for final hearing on peremptory basis.
Law Points
- Interim relief
- Balance of convenience
- Irreparable loss
- Prima facie case
- Company law
- Section 397
- Section 398
- Companies Act
- 1956
