Breach of restraint orders and undertakings defeats equitable claims over company assets; notice under Section 242(2)(f) was unnecessary.

Transactions entered into in breach of an existing restraint order and recorded undertaking were treated as incapable of conferring equitable advantage, especially where the material dealings were not fully disclosed and no leave of the Tribunal was obtained. The Tribunal also took the view that, in a closely held company's dispute over its sole immovable asset, the majority shareholders could be given an opportunity to purchase the property in the company's interest rather than requiring notice to a prospective purchaser. Section 242(2)(f) of the Companies Act, 2013 was held inapplicable because the proceedings did not concern modification or termination of a disclosed agreement within that provision's scope.

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Issues: (i) Whether the agreement to sell and the subsequent assignment in favour of the prospective purchaser were valid in the face of the prior interim restraint order and the undertaking recorded by the Tribunal; (ii) Whether the Tribunal was justified in directing the majority shareholders to purchase the property without issuing notice to the prospective purchaser; (iii) Whether Section 242(2)(f) of the Companies Act, 2013 required notice to the prospective purchaser before passing the impugned directions.

Issue (i): Whether the agreement to sell and the subsequent assignment in favour of the prospective purchaser were valid in the face of the prior interim restraint order and the undertaking recorded by the Tribunal.

Analysis: The Tribunal found that the appellants had entered into and pursued transactions concerning the company's sole asset despite an earlier order restraining creation of third-party interest and despite an undertaking not to do so. The subsequent assignment and related steps were treated as contrary to that undertaking and as having been undertaken without obtaining leave of the Tribunal. The conduct was also viewed as lacking candour, since the material transactions were not disclosed when required.

Conclusion: The agreement to sell and the assignment were not accepted as overriding the Tribunal's earlier restraint, and the appellants derived no equitable advantage from them.

Issue (ii): Whether the Tribunal was justified in directing the majority shareholders to purchase the property without issuing notice to the prospective purchaser.

Analysis: The Tribunal held that the dispute did not involve open-market auction or liquidation-style bidding, but concerned a closely held company's sole immovable asset. It concluded that the majority shareholders, holding control of the company, could be afforded an opportunity to buy the property in the company's interest. The prospective purchaser's claim was not treated as sufficient to displace the Tribunal's management-oriented approach, particularly because the purchaser's conduct indicated awareness of the prior restraint and because the purchaser had withdrawn its deposit after the impugned order.

Conclusion: The direction giving the majority shareholders an opportunity to purchase the property was upheld.

Issue (iii): Whether Section 242(2)(f) of the Companies Act, 2013 required notice to the prospective purchaser before passing the impugned directions.

Analysis: The Tribunal held that the provision was inapplicable because no agreement sought to be modified had been placed before it for adjudication in the manner contemplated by the section. The application before the Tribunal was for modification of its earlier restraint order, not for termination or modification of a disclosed agreement with the prospective purchaser. The proceedings and the sanction letter were also subject to the Tribunal's permission, which was never sought by the purchaser.

Conclusion: Section 242(2)(f) did not require notice in the manner contended, and no procedural illegality was found on that ground.

Final Conclusion: The impugned order was treated as a reasoned and equitable exercise of jurisdiction aimed at protecting the company's interests, and no ground for appellate interference was found.

Ratio Decidendi: A party who acts contrary to an existing restraint order and an undertaking cannot claim equitable relief to enforce transactions arising from that conduct, and Section 242(2)(f) does not apply unless the Tribunal is actually asked to modify a disclosed agreement within its adjudicatory ambit.

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