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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: (i) Whether the Company Court had inherent power to grant interim injunction in proceedings under the Companies Act. (ii) Whether the order refusing to extend the existing injunction without assigning reasons was sustainable.
Issue (i): Whether the Company Court had inherent power to grant interim injunction in proceedings under the Companies Act.
Analysis: Rule 9 of the Companies (Court) Rules, 1959 preserves the inherent powers of the Company Court to make such orders as may be necessary for the ends of justice or to prevent abuse of process. The earlier Division Bench ruling had already recognised that this inherent power includes the power to grant interim injunction, and the restored injunction operated on that basis. The Company Court was therefore not lacking jurisdiction to deal with the interlocutory relief sought.
Conclusion: The Company Court had inherent power to grant interim injunction.
Issue (ii): Whether the order refusing to extend the existing injunction without assigning reasons was sustainable.
Analysis: A discretionary or interlocutory order must ordinarily disclose reasons when it affects an existing right already conferred by an earlier order. Here, the existing injunction had been restored by the Division Bench, and the impugned order, though adjourning the matter, declined to continue that protection without any stated reason. Such non-speaking interference with the subsisting injunction was held to be unjustified, particularly when the substantive applications were still pending and required final adjudication after hearing both sides.
Conclusion: The refusal to extend the injunction without reasons was unsustainable and liable to be set aside.
Final Conclusion: The impugned order was set aside, the earlier injunction was restored, and the Company Court was directed to decide the pending applications expeditiously after hearing both sides.
Ratio Decidendi: Where an existing interim injunction has been restored and continues to affect substantive rights, its discontinuance or refusal of extension must be supported by reasons; the Company Court's inherent powers under Rule 9 include authority to grant such interim relief.
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