Class-rights variation valid with requisite shareholder consent; asset-preservation relief failed because it did not support the substantive suit.

Modification of preference-share redemption terms complied with the class-rights variation requirements because identical terms were offered to all preference shareholders and written consent exceeded the prescribed three-fourths threshold; no separate sub-class meeting was required. Interim asset-preservation relief must be ancillary to and support the final relief claimed in the suit. As the suit challenged the annual general meeting resolution while the application sought restraints on dealing with assets, the requested protection was not sustainable. Earlier interlocutory orders did not operate as res judicata because they expressly left all issues open for decision. The interim order's confirmation was therefore invalid.

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Issues: (i) Whether modification of the redemption terms of preference shares at the annual general meeting complied with the requirements for variation of class rights; (ii) Whether the interim asset-preservation relief sought was in aid of the substantive relief in the suit; (iii) Whether prior interlocutory orders operated as res judicata.

Issue (i): Whether modification of the redemption terms of preference shares at the annual general meeting complied with the requirements for variation of class rights.

Analysis: The notice, attendance record, minutes and written consents established that the proposed alteration applied on identical terms to preference shareholders as a class. Written consent was obtained from holders exceeding the prescribed three-fourths threshold; shareholders opposing the proposal represented only 0.9% of the paid-up preference capital. Where identical terms are offered to a class, a separate meeting of a sub-class is not required. The additional documentary evidence was admitted.

Conclusion: The alteration of redemption terms complied with Section 106 of the Companies Act, 1956 and was binding on the respondents; this issue was decided in favour of the appellant.

Issue (ii): Whether the interim asset-preservation relief sought was in aid of the substantive relief in the suit.

Analysis: The suit sought declarations concerning the validity of the annual general meeting resolution and injunction against its enforcement, whereas the interlocutory application sought restraint on dealing with assets and preservation of assets. The monetary claim was also being pursued independently. Interim relief must be ancillary to, and capable of supporting, the final substantive relief claimed.

Conclusion: The asset-preservation relief was not in aid of the substantive relief in the suit and could not be sustained; this issue was decided in favour of the appellant.

Issue (iii): Whether prior interlocutory orders operated as res judicata.

Analysis: The earlier appellate arrangement expressly continued only pending adjudication of the application and stated that prior observations would not bind the parties, with all issues remaining open for decision on affidavits.

Conclusion: The earlier interlocutory orders did not attract res judicata; this issue was decided in favour of the appellant.

Final Conclusion: The confirmation of the interim order was invalid because the class-rights variation was duly approved and the interlocutory protection sought was disconnected from the substantive suit relief.

Ratio Decidendi: A variation of rights affecting a class of shareholders is valid where the statutory written-consent threshold of that class is met, and interlocutory relief is unavailable unless it is ancillary to the final relief claimed.

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