SFIO investigation was stayed pending contested adjudication of the injunction petition.

The three appeals arose from the same judgment and order dated 3 August 2026, by which the learned Single Judge continued an ex parte ad interim injunction dated 16 June 2026, dismissed two applications seeking vacation of that injunction, directed investigation by the Serious Fraud Investigation Office (SFIO), and invited affidavits in the injunction proceedings.

APO/56/2026 was filed by defendant nos. 2–4, APO/57/2026 by defendant nos. 5–8, and APO/58/2026 by defendant no. 1.

The suit was principally for recovery of money exceeding ₹20 crores and ₹35 lakhs under the first two prayers, against identified defendants.

The plaintiff, a company under the Companies Act, 2013, had undergone Corporate Insolvency Resolution Process, following which a resolution plan was approved and the present management assumed control; separate proceedings concerning that assumption of management were pending.

The allegations in the plaint concerned alleged defalcations relating to the funds of an Exempted Employees Provident Fund Trust.

The injunction petition itself had not been finally heard when the appeals were considered.

1. Whether the learned Single Judge ought to have continued the ex parte ad interim injunction and dismissed the applications for its vacation while the injunction petition remained pending?

2. Whether the direction requiring investigation by the SFIO should remain operative at the interlocutory stage?

3. Whether the issues concerning the plaintiff’s entitlement to pursue claims relating to the Exempted Employees Provident Fund Trust, the applicability of the Companies Act, 2013, alleged defalcation, suppression of material facts, and invocation of Section 94 CPC should be finally decided at the interlocutory stage?

4. What procedural directions and time-limit should govern the continuation and hearing of the injunction petition?

The Court applied the procedural principles governing interlocutory injunctions and appellate intervention where the injunction application remains pending and the parties have not received a final adjudication on contested issues.

Section 94 of the Code of Civil Procedure, 1908, concerning supplemental proceedings and interlocutory protective orders, was identified as one of the statutory issues raised by the appellants, but the Court did not finally determine its correctness at this stage.

The Court also considered the statutory framework relating to companies under the Companies Act, 2013 and the SFIO, while leaving open the questions whether the plaintiff could maintain claims concerning the separately constituted Exempted Employees Provident Fund Trust and whether the Trust’s affairs could properly be investigated by the SFIO.

The governing procedural principle was that findings on disputed legal and factual issues should not prejudice the final contested hearing of the injunction petition.

The Court recognised that the suit involved substantial monetary claims and allegations concerning the Trust’s funds, but also noted that the plaintiff and the Trust were separate legal entities and that the plaintiff’s right to pursue the claims raised issues requiring adjudication by the learned Trial Judge.

Since the injunction petition had not yet been finally heard, the appellants could be prejudiced if the observations and determinations in the impugned order were treated as final findings while they were still required to file affidavits.

To preserve the parties’ rights and prevent interlocutory observations from foreclosing the merits, the Court kept all issues open for determination by the learned Trial Judge.

It accordingly stayed the SFIO investigation, while preserving the possibility that the Trial Judge could direct such investigation after a contested hearing; even then, the SFIO would be restrained from commencing investigation for fifteen days from that order.

The Court further considered it appropriate to confine the operation of the impugned order to 31 December 2026 and prescribed a timetable for pleadings and hearing of the injunction petition.

The direction for investigation by the SFIO was stayed.

If, after contested hearing of the injunction petition, the learned Trial Judge again directed an SFIO investigation, the SFIO could not undertake it for fifteen days from that order.

All issues raised by the parties—including the plaintiff’s entitlement to pursue claims concerning the Exempted Employees Provident Fund Trust and the other objections advanced by the appellants—were left open for final determination by the learned Trial Judge.

The impugned judgment and order dated 3 August 2026 was limited to 31 December 2026.

The defendants were granted one week to file affidavits-in-opposition, with replies permitted within two weeks thereafter, and the injunction petition was directed to be listed three weeks later, subject to the parties not seeking adjournment.

If the injunction petition was not decided by 31 December 2026, the parties were permitted to seek appropriate orders from the learned Trial Judge.

All three appeals and pending applications were disposed of without costs.