2015 (8) TMI 1489 - HC - Companies Law

Grant of interim injunction - restraint from selling/alienating or creating any third party rights in the assets and investments of the respondent company - HELD THAT - The impugned order passed would immobolise the day-to-day affairs of the appellant company and that the order was passed without giving an opportunity to the appellant though the respondent had earlier taken several adjournments, this Court is of the view that, without going into the merits of the case, it would be appropriate to remit the matter to the Company Law Board. The matter is remitted to the Company Law Board at New Delhi for hearing Company Petition after affording opportunities to both the parties and to pass appropriate orders on merits and in accordance with law. The interim order dated 10.7.2015 passed by this Court would continue till the disposal of the Company Petition. Appeal disposed off.

Summary

Issues:
Challenge to interim injunction order passed by Company Law Board restraining the appellant from selling/alienating assets and investments of the respondent company.

Analysis:
The Company Appeal challenges the interim injunction order passed by the Company Law Board, Principal Bench at New Delhi, restraining the appellant from selling or creating third-party rights in the assets and investments of the respondent company. The appellant's counsel argued that the ex parte and blanket interim injunction order would paralyze the company's proceedings and functioning. On the other hand, the Additional Solicitor General contended that since the order was interim and no final decision was made, the appeal was not maintainable. He also raised the issue of territorial jurisdiction since the order was passed in New Delhi. The impugned order cited the Forward Markets Commission's order and a draft merger order as reasons for the injunction. The High Court, after considering the submissions, issued an interim order allowing the injunction to continue only for immovable assets, suspending it for other investments. The Court, without delving into the merits of the case, remitted the matter back to the Company Law Board for a full hearing, emphasizing the importance of affording both parties a fair opportunity. The Company Law Board was directed to expedite the proceedings and dispose of the matter by a specified date.

This detailed analysis highlights the legal arguments presented by both parties, the basis for the interim injunction order, the High Court's decision to remit the matter back to the Company Law Board for a full hearing, and the directives issued for the expeditious disposal of the case.