Interlocutory injunction principles barred restraint of the annual general meeting, but protective directions were issued for fairness.

An interlocutory injunction to restrain an annual general meeting was refused because the applicants did not establish that the balance of convenience and risk of irreparable injury justified stopping the meeting, and allegations of mala fides in the share allotment were left for trial rather than decided on affidavit evidence. To preserve fairness pending the company petition, the court directed that the meeting be presided over by an independent chairman and extended the time for depositing proxies. The court therefore declined interim restraint but issued protective directions for the conduct of the meeting while remaining interim prayers were pending.

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Issues: (i) Whether the annual general meeting should be restrained by interlocutory injunction pending the company petition. (ii) Whether, if the meeting were to proceed, the court should regulate its conduct by appointing an chairman and extending time for deposit of proxies.

Issue (i): Whether the annual general meeting should be restrained by interlocutory injunction pending the company petition.

Analysis: The application was considered on settled principles governing temporary injunctions, namely the existence of a serious question to be tried, the balance of convenience, and the likelihood of irreparable injury. The court declined to decide the alleged mala fides of the share allotment at the interlocutory stage, holding that such questions required trial and should not be prejudged on affidavit evidence. On the materials then available, the applicants had not shown that refusal of restraint would cause irreparable prejudice outweighing the hardship to the company and the allottees if the meeting were stopped.

Conclusion: The request to stay the annual general meeting was rejected.

Issue (ii): Whether, if the meeting were to proceed, the court should regulate its conduct by appointing an independent chairman and extending time for deposit of proxies.

Analysis: To protect the fairness of the meeting without prejudging the merits, the court accepted that the proceedings should be supervised by a neutral officer and that shareholders should have a fair opportunity to exercise proxy voting rights. These directions were treated as appropriate ancillary measures pending further orders.

Conclusion: The meeting was directed to be presided over by an independent chairman and the time for depositing proxies was extended.

Final Conclusion: Interim restraint of the annual general meeting was refused, but the court issued protective directions for the conduct of the meeting, while the application remained pending as to the remaining interim prayers.

Ratio Decidendi: An interlocutory injunction will not be granted merely because serious allegations are made; the applicant must establish that the balance of convenience and the risk of irreparable injury justify restraint, and contested issues of mala fides should ordinarily await trial.

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