Interim restraint on company assets may issue where a related-party transfer appears prima facie improper and risks irreparable harm.

Interim restraint may be granted to protect a company asset from transfer where a proposed dealing under a board resolution appears prima facie to breach related-party restrictions. The Tribunal applied the established tests of prima facie case, balance of convenience and irreparable prejudice, and treated protection of the asset pending adjudication as just and equitable. It also accepted that a fresh interim application remained maintainable because the earlier order had ceased to operate in changed circumstances. On that basis, dealing with the land was restrained pending decision on the Section 8 application and, if needed, until final disposal of the company petition.

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Issues: Whether ad-interim restraint could be granted against dealing with the 7 acres of land pending decision on the Section 8 application and the main company petition.

Analysis: The land stood registered in the first respondent company's name, the proposed dealing was under a board resolution in favour of related parties, and the transaction was found to be prima facie in breach of the related-party restrictions. The Tribunal held that the applicants had shown a prima facie case, balance of convenience and the risk of irreparable prejudice if the property was transferred during the pendency of proceedings. It also held that the earlier interim order had ceased to operate and the fresh application was maintainable in the changed circumstances. In exercise of the interim power under the Companies Act, 2013, the Tribunal considered protection of the company's assets pending adjudication to be just and equitable.

Conclusion: The application was allowed and the respondents were restrained from dealing with the 7 acres of land until the Section 8 application was decided, and if that application failed, until final disposal of the company petition.

Final Conclusion: Interim protection was granted to preserve the company asset and prevent prejudice pending adjudication of the arbitration objection and the company petition.

Ratio Decidendi: Where a company asset is proposed to be transferred under a prima facie contentious related-party resolution, the Tribunal may grant interim restraint under its statutory powers if the applicant establishes prima facie entitlement, balance of convenience, and risk of irreparable harm.

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