Interim use of frozen foreign exchange assets upheld where ancillary relief and safeguards prevented final relief at the interim stage.

Interim permission to use frozen foreign exchange assets for loans to the petitioner's concerns was treated as ancillary to the main prayers for declaration, quashing and injunction, so it was not rejected as beyond the scope of the petition. The absence of an express repatriation prayer was not treated as fatal where the relief was necessarily implied in the substantive case. The Court also held that provisional use of the funds did not amount to granting final relief at an interlocutory stage because safeguards were imposed: the loans were to be interest free, and any repatriation after success would follow the prevailing exchange rate. The motion was therefore allowed on conditions to preserve the value and utility of the funds pending final disposal.

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Issues: (i) Whether a motion seeking permission to utilise frozen foreign exchange assets for loans to the petitioner's concerns was beyond the scope of the substantive petition. (ii) Whether such interim permission could be granted without impermissibly giving the petitioner the final relief at an interlocutory stage.

Issue (i): Whether a motion seeking permission to utilise frozen foreign exchange assets for loans to the petitioner's concerns was beyond the scope of the substantive petition.

Analysis: The relief sought in the motion was treated as ancillary to the pending prayers for declaration, quashing, and injunction. Once those principal prayers were granted, the petitioner would be free to deal with the funds, and the absence of an express prayer for repatriation did not justify rejection of the motion on a technical view of pleadings. The Court preferred substance over form and held that what was necessarily implied in the main relief could be granted provisionally.

Conclusion: The objection that the motion was beyond the petition was rejected and the relief was held maintainable.

Issue (ii): Whether such interim permission could be granted without impermissibly giving the petitioner the final relief at an interlocutory stage.

Analysis: The frozen funds would otherwise remain idle for years, causing loss through denial of productive use and erosion of value by inflation. The proposed loans were to be interest free and repatriation, if the petition succeeded, was to be subject to the then prevailing rate of exchange. Those safeguards were considered sufficient to protect the respondents while avoiding irreparable prejudice to the petitioner. The Court held that granting the permission did not confer the ultimate relief but merely preserved the value and utility of the funds pending final disposal.

Conclusion: The interim permission was granted and was not treated as a prohibited grant of final relief.

Final Conclusion: The motion was allowed with conditions, permitting temporary utilisation of the frozen funds while protecting the respondents by restrictions on interest and exchange-rate terms.

Ratio Decidendi: Interim relief may be granted to prevent irreparable loss and preserve the value of disputed funds where the relief is ancillary to the main petition and adequate safeguards protect the opposite party.

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