Interim restraint on creating encumbrances cannot be lifted without prima facie necessity, balance of convenience, and irreparable harm analysis.

Binding articles of association protected investor participation, board quorum rights, and consent requirements for material encumbrances, so an interim order allowing unilateral creation of charges or liabilities could not properly be modified without a clear prima facie basis, consideration of balance of convenience, and assessment of irreparable prejudice. The pending arbitration-related proceedings reinforced the need to preserve the status quo and protect the subject matter of the company petition. The modification order was therefore unsustainable, and the earlier restraint against creating encumbrances was restored.

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Issues: Whether the tribunal was justified in modifying the earlier interim order and permitting the respondent company to create charge or encumbrance over its assets pending the dispute, in the face of the articles of association and the pending arbitration-related proceedings.

Analysis: The appeal arose from an order that altered an earlier restraint against creating encumbrances. The Articles of Association expressly protected the investors' rights, including participation in the board, quorum requirements, and approval for significant changes in liability structure and encumbrances. The challenged order was passed without properly addressing the appellant's objections and without a satisfactory prima facie assessment of the merits, balance of convenience, or irreparable prejudice. The pendency of arbitration proceedings and the tribunal's earlier view that the matter could not then be decided further supported restraint from altering the status quo. The tribunal's modification was found inconsistent with the contractual framework binding the parties and with the need to preserve the subject matter of the company petition.

Conclusion: The modification order was not sustainable and was set aside. The earlier interim restraint was restored in favour of the appellant.

Ratio Decidendi: Where the parties' binding articles of association protect investor participation and require consent for material encumbrances, an interim order permitting unilateral creation of substantial liabilities cannot be modified without a proper prima facie showing of necessity, balance of convenience, and absence of irreparable harm.

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