NCLAT Upholds Denial of Interim Relief Due to Breach of Service Contract

Case Details: Smt. Dr. Thoyajakshi Bai Sakranaik v. Patanjali Hospitals (P.) Ltd. - [2025] 175 taxmann.com 273 (NCLAT-Chennai)

Judiciary and Counsel Details

• Sharad Kumar Sharma, Judicial Member & Jatindranath Swain, Technical Member
• Vinay Kumar, Adv. for the Appellant.
• Bharadwajaramasubramaniam R., Rishitha Kishan & Samjyor Lepcha, Advs. for the Respondent.

Facts of the Case

In the instant case, the appellant was the director of the respondent company. The appellant filed an interlocutory application seeking a grant of an interim order in a pending proceeding under sections 241 and 242 of the Companies Act, 2013.

The NCLT rejected the said application on the ground that the appellant had functioned in a fashion detrimental to the interest of the respondent-company, to whom she was contractually bound to render services, by changing over and above what they had been billed at the hospital. Thus, she could not claim to be oppressed.

Thereafter, an appeal was made before the National Company Law Appellate Tribunal (NCLAT) against the order passed by the NCLT.

It was noted that the appellant had not come with clean hands for the grant of equitable relief, and, therefore, rejection of the prayer for the grant of interim relief could not be legally faulted with, because the actions of the appellant had prima facie resulted in a continuous breach of the service contract.

Further, apart from that, rejection of interim relief as prayed for, being of an interlocutory nature, would not amount to an adjudication of any rights, which was still a subject matter of appeal, as it would still be left open to be independently decided after the exchange of pleadings and enabling parties to lead their evidence.

NCLAT Held

The NCLAT held that the denial to grant interim relief by the impugned order, owing to conduct, which NCLT considered as unbecoming of a medical officer for the respondent company, to whom the appellant owed an allegiance, did not suffer from any legal vices and hence did not call for any interference.