Disclosure in prospectus defeats injunction against share issue where no prima facie case or balance of convenience is shown.

Interim injunction to restrain a public share issue was refused where the prospectus disclosed the secured loans, the applicant's claim, and the Debt Recovery Tribunal restraint order, and also included risk disclosures and issuer responsibility statements. The alleged criminal complaint had not been shown to have become a pending criminal case. As the applicant was only a creditor, the Court held that injunction proceedings could not be used to obstruct the share issue or force payment of disputed dues. No prima facie case was made out, and the balance of convenience favoured continuation of the share issue, which had already opened and attracted subscriptions.

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Issues: Whether the applicant established a prima facie case and balance of convenience for grant of interim injunction restraining the public issue of shares.

Analysis: The relief sought was founded on alleged non-disclosure in the prospectus of liabilities and pending proceedings. The prospectus, however, disclosed the secured loans and specifically referred to the applicant's claim and the restraint order of the Debt Recovery Tribunal. The alleged criminal complaint was not shown to have matured into a pending criminal case, and the prospectus also contained express risk disclosures and issuer responsibility statements. The applicant, being only a creditor, could not use an injunction application as a device to obstruct the share issue and compel payment of disputed dues. The Court found no prima facie case and held that the balance of convenience was against continuing the injunction, particularly as the issue had already opened and shares had been subscribed.

Conclusion: The applicant failed to justify continuance of the interim injunction, and the relief was declined.

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