Denial of hearing in company disputes can justify notice and interim protection against immediate cancellation of shareholding and directorship.

An order affecting shareholding and directorship, passed without notice to the affected person, may justify appellate notice and interim protection where denial of hearing is seriously alleged. The Delhi HC noted that the challenge to the Company Law Board's cancellation order raised a substantial objection on audi alteram partem and that the impugned order should not continue to operate against the appellant pending consideration of the appeal. Notice was therefore directed in the appeal and connected applications, and interim stay was granted in relation to the cancellation of the appellant's shareholding and directorship.

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Issues: Whether the appellant was entitled to notice and interim protection against the Company Law Board order cancelling his shareholding and directorship; whether notice should issue in the appeal and connected applications.

Analysis: The appeal challenged an order that had cancelled the appellant's allotment and directorship without notice to him. The matter raised a serious objection of denial of hearing and a further contention that the impugned order could not continue to operate against the appellant pending consideration of the appeal. In these circumstances, the Court found that the questions raised required examination and that notice deserved to be issued. Pending further consideration, protection was also warranted against the operation of the impugned order insofar as it affected the appellant's shareholding and directorship.

Conclusion: Notice was directed to issue in the appeal and the connected applications, and interim stay was granted in favour of the appellant in relation to the cancellation of his shareholding and directorship.

Final Conclusion: The appellant obtained interim protection and the challenge to the impugned order was kept alive for further hearing.

Ratio Decidendi: An order affecting civil or company rights with immediate adverse consequences, passed without notice to the affected person, can justify issuance of notice and interim protection pending appellate consideration.

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