Supreme Court of India

DR. RAJESHW AR KUMAR MALHOTRA AND ANR. ETC.versusMIS LLOYD ELECTRIC ENGINEERING LTD. AND ORS.

Citation: 1996 INSC 1531
Decided: 20 December 1996
Disposal: Appeal(s) allowed
Bench: K RAMASWAMYG T NANAVATI

Holding

The injunction granted against the company is dissolved as the factual circumstances no longer justify its continuance.

Summary

The Supreme Court considered appeals against a Rajasthan High Court order that had granted an injunction against Mis Lloyd Electric Engineering Ltd. The appellants, Dr. Rajeshwar Kumar Malhotra and S. Srinivasan, argued that the two senior individuals whose presence formed the basis of the injunction had resigned and that the shareholding structure had changed, making the injunction unnecessary. The respondents contended that a bank loan to the appellants was conditioned on those individuals continuing to work for the company, and thus the injunction should remain in force. The Court examined whether the changed factual circumstances justified maintaining the injunction and concluded that, since the individuals no longer held positions in the company, the injunction could not be sustained. Accordingly, the Court dissolved the injunction and allowed the appeals without costs.

Issues considered

Whether an injunction against a company can be maintained when the key persons whose conduct is restrained have resigned.
Whether a loan condition requiring specific individuals to continue employment affects the validity of an injunction.
Whether the factual changes justify vacating the High Court's injunction.

Subjects

injunctioncompany lawresignation of officerschange of circumstancesloan conditioncivil appealspecial leave petitionvacating injunction

Judgment

A                  DR. RAJESHWAR KUMAR MALHOTRA                                 •
                                 AND ANR. ETC.
                                         v.
                MIS LLOYD ELECTRIC ENGINEERING LTD.
                                     AND ORS.
B                              DECEMBER 20, 1996

                 [K. RAMASWAMY AND G.T. NANAVATI, JJ.]

            Injunction-Granted against appellant Company-f'ennissibility
C of-Two persons resigned from the respective posts held by them in the com-
    pany-As a result, they are no longer continuing in the company-Shares held
    by the different groups, are different and varied-Held no injunction can be
    granted against the company much less due to the change in the circumstances.

            CIVIL APPELLATE JURISDICTION : Civil Appeal No. 16989 of
D   1996.

         From the Judgment and Order dated 24.10.96 of the Rajasthan High
    Court in C.R.P. No. 715 of 1996.

          S.J. Sorabjee, Ravinder Narain, P.P. Tripathi and Ms. Punita Singh
E   for the Appellants.

            H.N. Salve, Maninder Singh and Sandi! Sethi for the Respondents.

            Raju Ramachandran and Sanjay Kaul for the Intervener.

F           The following Order of the Court was delivered :

            Leave granted.

            We have heard learned counsel on both sides.

G           Intervention is permitted.

          These appeals by special leave arise from the order of the High Court
    of Rajasthan, made on October 24, 1996 in Revision Petition No. 715/96.
    One matter relates to the two individuals, i.e., appellants in appeal arising
    out of SLP (C) No. 22164, namely, Dr. Rajeshwar Kumar Malhotra and S.
H   Srinivasan. This Court on November 26, 1996 directed as under :
                                        918
           R.K. MALHOlRAv. LLOYD ELECTRIC ENGG. LID.                   919

          "We do not find any substance in the appeal as regards the          A
          injwiction against the individual petitioner is concerned. But as
          regards the injunction against the Company Shri Salve, learned
          senior counsel appearing for the respondents seeks for ·and is
          granted one week's time as to how the injunction requires to be
        , modulated."

       Accordingly, the matter was adjourned. Today, Shri Soli J. Sorabjee,
learned senior counsel appearing for the appellants in appeal arising out
of SLP (C) No. 22769/96, namely, appeal filed by the company has stated
that in the rejoinder affidavit, the appellant has stated that the aforestated
two persons resigned from the respective posts held by them in the com- C
pany. As a result, they are no longer continuing in the company. It is also
pointed out that shares held by the different groups, as stated at page 148
of the additional paper-book filed in this case, are different and varied. So,
no injunction  can  be granted against the company much less due to the
change in the circumstances. We find force in the contention. Though the
learned counsel appearing for the respondents, Shri Harish Salve, seeks to D
contend that the bank had granted loan to the appellants with a condition
that the aforestated two persons would be required to continue to work in
the company. Therefore, it is only a make- believe show to see that no
injunction is granted against the company and the one granted by the High
Court is vacated. We do not find any justification for the contention as cin E
today. If the two persons really still work for the company in any form and
in any manner, it is open to the respondents to approach the trial Court
for appropriate relief. As facts stand today, injunction granted by the High
Court against the company is not warranted.

      The appeals are accordingly allowed with the above liberty. The         F
injunction order granted against the company stands dissolved. No costs.

T.NA.                                                    Appeals allowed.

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