Interim injunction against de facto directorship upheld where company records showed no valid shareholding or appointment.

At the interlocutory stage, the SC upheld an injunction restraining a person from acting as a company director where the company records, share register and minutes prima facie showed that he was neither entered as a shareholder nor validly appointed by resolution. His de facto exercise of director functions did not override the legal entitlement to hold office, and an earlier order permitting operation of the bank account was treated as without prejudice and not as recognition of directorship. The court also noted the delayed attempt to seek rectification of the share register and drew an adverse inference from that delay.

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Issues: Whether, at the interlocutory stage, the plaintiff had made out a prima facie case to restrain the defendant from acting as a director of the company on the footing that he was neither a shareholder nor validly appointed as a director.

Analysis: The company records, share register and minutes relied on by the plaintiff prima facie showed that the defendant was not entered as a shareholder and that no resolution validly appointed him as director. The fact that the defendant had acted as a director in practice did not displace the legal question whether he was entitled to hold office. The earlier company-court order permitting operation of the bank account was treated as without prejudice to the parties' rights and did not amount to recognition of directorship. The appellate court was therefore justified in assessing the material as establishing a prima facie entitlement to interim protection and in drawing an adverse inference from the defendant's delayed attempt to seek rectification of the share register.

Conclusion: The injunction restraining the defendant from functioning as a director was rightly granted.

Ratio Decidendi: At the interlocutory stage, an injunction may issue where the company records prima facie show that a person is neither a shareholder nor validly appointed as director, and de facto functioning cannot override the legal entitlement to office.

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