Bona fide exercise of company discretion supports interim injunction to protect corporate board representation pending trial.

Discretion in company administration must be exercised bona fide and in good faith, and a refusal to accept the nomination of an alternate director may be restrained by interim injunction where the applicant shows a prima facie case, balance of convenience, and likely irreparable injury. The Delhi HC noted that the plaintiff had a substantial interest in the company, faced limits on attending board meetings, and risked losing board representation if alternate-director relief was denied. On the materials then available, the company had not shown a mandatory right to reject the nomination merely because the board preferred otherwise, so interim protection was justified to preserve the plaintiff's corporate participation.

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Issues: Whether the plaintiff was entitled to an interim injunction directing the company to accept the nomination of Mr. Brij Anand as alternate director, and whether the refusal to accept the nomination was shown to be bona fide.

Analysis: The relief sought was interlocutory in nature and had to be tested on the usual principles governing temporary injunctions. The plaintiff had a substantial and prima facie interest in the company, and the record indicated that his ability to attend board meetings was limited. The company was not shown to have any mandatory right under the governing provision to reject the nomination merely because the board desired otherwise. The discretion involved in company administration had to be exercised in good faith, and mala fides would vitiate its exercise. On the materials then available, the plaintiff established a prima facie case. The balance of convenience also favoured protection of his position because, without an alternate director, he risked losing board representation due to absence. Irreparable prejudice was likely if interim relief was refused.

Conclusion: The plaintiff was entitled to interim relief, and the refusal to appoint the alternate director could not be sustained at that stage.

Ratio Decidendi: Discretionary powers in company administration must be exercised bona fide and in good faith, and where a prima facie case, balance of convenience, and irreparable injury are established, interim injunction may issue to preserve the claimant's corporate participation.

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