A division bench of Bombay High Court has set aside an interim injunction that enabled Zee Entertainment Enterprises Ltd (ZEEL) to stymie a demand by Invesco for an extraordinary general meeting to remove Punit Goenka as the managing director and chief executive officer of Zee and recast its board of directors.

The bench of Justices S.J. Kathawalla and Milind Jadhave on Tuesday allowed an appeal of Invesco Developing Markets Fund, the largest shareholder of Zee, against the single-judge order which had granted interim injunction on holding the EGM.

The division bench quashed and set aside the single bench order of October 2021. It also quashed all the observations made by the single judge in his order.

Invesco and OFI Global China Fund together hold close to 18 per cent in Zee. The feuding parties dragged the name of Reliance Industries in their battle to control Zee which has been raging since September last year.

Invesco had revealed that it had held merger talks between Zee and Reliance, although the deal fell apart.

In September 2021, Invesco had sought an EGM to remove Goenka and appoint six of its nominees to the Zee board.

When Zee did not respond, Invesco moved the National Company Law Tribunal (NCLT) in Mumbai, which directed the Subhash Chandra promoted-entity to consider the requisition in accordance with law. Zee then approached the high court maintaining the requisition notice was illegal and invalid.

In an interim order in October, the single bench of Justice Gautam Patel granted an injunction against the holding of the EGM.

Justice Patel, who agreed with all the points made by Zee’s senior counsel Gopal Subramanium, had then observed that “sometimes, it happens that a company must be saved from its own shareholders, however well-intentioned’’.

Invesco challenged the order where it maintained that the high court does not have the jurisdiction under the Companies Act to hear the case and that the NCLT was the right forum for the dispute.

“The appeal is allowed. The single bench order is quashed and set aside. We have held that the requisition notice (sent by Invesco to Zee) is neither illegal nor incapable of being set aside,’’ the court said. The detailed copy of the judgment is awaited.

Zee senior counsel Aspi Chinoy sought the court to direct for a status quo. The court directed that the status quo be maintained for a period of three weeks.

The development led to Zee shares falling on the bourses. On the BSE, it settled at Rs 248.55 — a drop of 3.23 per cent over the last close.