Interim protection of company property upheld where lease irregularities and related-party concerns justified preserving possession pending final adjudication.
Interim protection over leased company property was treated as justified where the transaction showed prima facie irregularities, including differing lease deeds, non-registration of the earlier deed, stamp-duty concerns, disputed notice to a director, related-party elements, and unauthorised banking arrangements. On those facts, preservation of possession pending final adjudication was considered necessary to protect the subject matter. A limitation objection under section 242(2)(g) of the Companies Act, 2013 did not defeat that protective relief, because the surrounding circumstances suggested hurried execution and registration of the documents after the company petition and continuing compliance gaps.
Issues: (i) Whether the interim order restraining construction and preserving possession over the leased land was justified on the facts and circumstances of the case. (ii) Whether the plea based on limitation under section 242(2)(g) of the Companies Act, 2013 barred the grant of protection.
Issue (i): Whether the interim order restraining construction and preserving possession over the leased land was justified on the facts and circumstances of the case.
Analysis: The lease transactions were scrutinised in the context of the board meeting, execution of two lease deeds with materially different terms, non-registration of the earlier lease deed, adequacy of stamp duty, alleged absence of notice to a director, related-party involvement, and the opening and use of a bank account without proper authorisation. The factual matrix created serious doubt about the bona fides of the transaction and the transfer of possession. In such circumstances, the protection of company property pending adjudication of the company petition was found to be necessary.
Conclusion: The interim restraint and preservation of possession were upheld, against the appellant.
Issue (ii): Whether the plea based on limitation under section 242(2)(g) of the Companies Act, 2013 barred the grant of protection.
Analysis: Although the appellant relied on the statutory time bar, the surrounding facts showed hurried execution and registration of the lease documents after the company petition, together with prima facie compliance gaps in the transaction. On that basis, the time-bar plea was not accepted as a ground to deny interim relief.
Conclusion: The limitation objection under section 242(2)(g) did not assist the appellant.
Final Conclusion: The appeal failed and the interim order protecting the company's property and possession was sustained, leaving the substantive company petition to be decided independently.
Ratio Decidendi: Where a transaction affecting company property is surrounded by prima facie irregularities, related-party concerns, and doubtful compliance, the Tribunal may grant interim protection to preserve the subject matter pending final adjudication, and a limitation objection will not defeat such protective relief on these facts.
TaxTMI 
AI Drafter ✕
TaxTMI 
