Interim protection in oppression and mismanagement disputes survives a pending arbitration plea when not all issues are arbitrable.

Interim status quo relief in an oppression and mismanagement petition was supported by recorded factual basis and a prima facie case; the order was not invalid merely because it lacked elaborate reasons. The arbitration clause and a pending Section 8 application did not by themselves oust the Company Law Board's interim jurisdiction, because the dispute was not shown to be fully covered by arbitration and all necessary parties were not bound. The Board could therefore grant interim protection while the Section 8 issue was examined, and the arbitration application had to be decided separately and expeditiously.

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Issues: (i) Whether the ad-interim order of status quo passed by the Company Law Board was vitiated for want of reasons and findings on prima facie case, balance of convenience and irreparable injury. (ii) Whether the pendency of the application under Section 8 of the Arbitration and Conciliation Act, 1996 ousted the jurisdiction of the Company Law Board to pass interim orders in the oppression and mismanagement petition.

Issue (i): Whether the ad-interim order of status quo passed by the Company Law Board was vitiated for want of reasons and findings on prima facie case, balance of convenience and irreparable injury.

Analysis: The order recorded the factual basis of the allegations, the existence of a prima facie case of oppression and mismanagement, and the reasons for granting interim protection. The Company Law Board acted within the wide interim powers available in matters under Sections 397, 398, 402 and 403 of the Companies Act, 1956, and the order could not be treated as void merely because it did not contain elaborate reasoning. The interim restraint was directed to preserve the company's affairs pending fuller consideration.

Conclusion: The interim order was not invalid for want of reasons and was held to be justified.

Issue (ii): Whether the pendency of the application under Section 8 of the Arbitration and Conciliation Act, 1996 ousted the jurisdiction of the Company Law Board to pass interim orders in the oppression and mismanagement petition.

Analysis: The existence of an arbitration agreement does not by itself oust jurisdiction. The Court held that the effect of Section 8 depends on whether the dispute is entirely covered by the arbitration agreement and whether all necessary parties are bound by it. Since the petition involved allegations of oppression and mismanagement, included non-signatory parties, and raised issues not capable of being fully bifurcated for arbitration, the Company Law Board was not denuded of jurisdiction to pass interim protection pending decision on the Section 8 application. The Court further held that the application under Section 8 required deeper factual examination and its pendency did not prevent the Board from acting in the meantime.

Conclusion: The Company Law Board retained jurisdiction to pass the interim order notwithstanding the pending Section 8 application.

Final Conclusion: The challenge to the interim order failed, the appeal was dismissed, and the matter under Section 8 was left to be decided expeditiously by the Company Law Board.

Ratio Decidendi: In a petition alleging oppression and mismanagement, the Company Law Board may pass a just and equitable interim order under the Companies Act, 1956 despite a pending Section 8 application, and an arbitration clause does not oust its jurisdiction unless the dispute is fully arbitrable and all necessary parties are bound by the agreement.

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