1988 (9) TMI 273 - SC - Companies Law

Whether there is need for the continuance of the order of injunction passed by this court on August 25 1988? Held that - It is difficult in the absence of any reliable data for any person to come to a conclusion as to how exactly the publication of articles of the type published by the respondents would cause prejudice in the manner contended for by the petitioner. It seems to me however that the danger apprehended by the petitioner company is not so real or substantial as to warrant the continuance of the injunction order passed by us on August 25 1988. Even if for the purpose of argument one were to assume that such claims for refund will be made they cannot straightaway harm the interests of the petitioner company. There is no possibility that pending determination of the issues raised any court will order interim relief to such applicants by way of grant of such refunds. The petitioner will be liable to make any such refund only if it is ultimately decided by this court or any other court that the issue of debentures is invalid and that the application moneys have to be refunded. That of course the company will have to do in any event. There is however no immediate cause for any apprehension on the part of the petitioner that the publication of any such article could abort the debenture issue in the manner it could have done before August 31 1988. I therefore agree that there is no justification for the continuance of the interim order dated August 25 1988 any longer.

Summary

Issues Involved:
1. Continuance of the order of injunction.
2. Alleged contempt of court.
3. Freedom of the press vs. administration of justice.
4. Prima facie validity of the debenture issue.
5. Balance of convenience and imminent danger.

Detailed Analysis:

1. Continuance of the Order of Injunction
The court was tasked with determining whether the injunction order passed on August 25, 1988, should continue. The injunction restrained the respondents from publishing any articles questioning the legality or validity of consents, approvals, or permissions related to the debenture issue of Reliance Petrochemicals Ltd. The court noted that the debenture issue had been oversubscribed, and there was no imminent danger of withdrawal of subscriptions before allotment. Thus, the balance of convenience did not necessitate the continuance of the injunction, and it was decided that the injunction should not continue further.

2. Alleged Contempt of Court
The petitioner claimed that the respondents' article published on August 25, 1988, interfered with the administration of justice by commenting on a sub-judice matter. The court declined to take cognizance of the alleged contempt without the Attorney-General's sanction. It was emphasized that the publication of any article related to the matter would be subject to the court's decision on contempt of court, specifically prejudging the issue and interfering with the due administration of justice.

3. Freedom of the Press vs. Administration of Justice
The court had to balance the freedom of the press with the need for unimpaired administration of justice. It was argued that pre-stoppage of a newspaper article on public matters was contrary to the right of freedom of the press under Article 19(1)(a) of the Constitution. The court referred to various precedents, including American and English cases, emphasizing that the freedom of speech and fair trial are both cherished values. The court concluded that preventive injunction against publication must be based on reasonable grounds to keep the administration of justice unimpaired.

4. Prima Facie Validity of the Debenture Issue
The petitioner argued that the debenture issue was prima facie legal and valid, having obtained all necessary consents and permissions. The court noted that the primary concern was the potential impact of any injunction or stay order on the debenture issue, which could cause irreparable loss or damage to the petitioner. The court's earlier orders aimed to ensure that the debenture issue proceeded without hindrance, reflecting a prima facie satisfaction of its legality.

5. Balance of Convenience and Imminent Danger
The court considered whether there was a present and imminent danger that justified the continuance of the injunction. It was highlighted that the injunction was initially granted to prevent any legal impediment to the debenture issue. However, given that the issue had been oversubscribed, the court found no imminent danger of subscription withdrawal that would justify the continuance of the injunction. The balance of convenience favored lifting the injunction to uphold the freedom of the press.

Conclusion:
The court decided that the injunction against publication should not continue further, emphasizing that any future publications would be subject to the court's decision on contempt of court. The decision balanced the freedom of the press with the need for unimpaired administration of justice, concluding that there was no imminent danger to the debenture issue that warranted the continuance of the injunction.