Karnataka High Court
Neil Patel Digital Llc vs Pradeep Kumar Rajarathinam on 23 September, 2025
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NC: 2025:KHC:38445
AP.IM No. 4 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 23RD DAY OF SEPTEMBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE R. NATARAJ
ARBITRATION PETITION-INTERIM MEASURE NO. 4 OF 2025
BETWEEN:
NEIL PATEL DIGITAL LLC
A LIMITED LIABILITY COMPANY INCORPORATED IN
ACCORDANCE WITH LAWS OF CALIFORNIA,
UNITED STATES OF AMERICA AND HAVING ITS
REGISTERED OFFICE / PRINCIPAL PLACE OF BUSINESS AT
9710 RIVER TRADER STREET,
LAS VEGAS, NV, 89178,
CALIFORNIA,
UNITED STATES OF AMERICA.
REP BY ITS AUTHORIZED REPRESENTATIVE
AND SPA HOLDER
MR. PRASHANT KUMAR
AADHAR CARD NO.513805139615
AN INDIAN RESIDENT RESIDING AT
NO.6, 3RD CROSS, PILLAGANAHALLI,
Digitally KEMBATHAHALLI MAIN ROAD,
signed by GOTTIGERE, BANGALORE, 560083.
SUMA
...PETITIONER
Location:
HIGH (BY SRI. UDAYA HOLLA, SENIOR ADVOCATE FOR SRI. SYED
COURT OF
KARNATAKA SHUJATH MEHDI, SMT. MEENA V. AND SRI. CHRISTOPHER EDWIN,
ADVOCATES)
AND:
1. PRADEEP KUMAR RAJARATHINAM
HAVING HIS RESIDENCE AT
NO.5/207, TEACHERS COLONY WEST,
MOHANUR ROAD, NAMAKKAL,
TAMIL NADU-637 001
EMAIL: [email protected]
[email protected]
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AP.IM No. 4 of 2025
HC-KAR
2. HDFC BANK
HAVING ITS OFFICE AT
DOMLUR BRANCH, NO.94,
AMARJYOTHI LAYOUT, DOMULUR,
IRR, BANGALORE,
KARNATAKA - 560071.
REP BY ITS BRANCH MANAGER.
...RESPONDENTS
(BY SRI. UDAYA PRAKASH M., ADVOCATE FOR RESPONDENT NO.1;
SRI. FRANCIS XAVIER, ADVOCATE FOR RESPONDENT NO.2)
THIS ARBITRATION PETITION INTERIM MEASURE IS FILED
UNDER SECTION 9 READ WITH SECTION 2(e)(ii) AND (f) OF THE
ARBITRATION AND CONCILIATION ACT, 1996 AND READ WITH
SECTION 10 OF THE COMMERCIAL COURTS ACT, 2015 (AS
AMENDED) AND READ WITH RULE 9 OF THE HIGH COURT OF
KARNATAKA ARBITRATION (PROCEEDINGS BEFORE THE COURTS)
RULES, 2001 PRAYING TO DIRECT RESPONDENT NO. 1 TO DEPOSIT
THE SUM OF INR 7.9 CRORES (RUPEES SEVEN CRORES AND NINETY
LAKHS ONLY), BEING THE AMOUNT SIPHONED OFF BY THE
RESPONDENT NO.1 FROM THE LLP IN THE LLP'S BANK ACCOUNT OR
IN THE ALTERNATIVE DIRECT RESPONDENT NO.1 TO DEPOSIT THE
SUM OF INR 7.9 CRORES (RUPEES SEVEN CRORES AND NINETY
LAKHS ONLY), BEING THE AMOUNT SIPHONED OFF BY THE
RESPONDENT NO.1 FROM THE LLP WITH THIS HON'BLE COURT IN
AN INTEREST BEARING ACCOUNT OR IN THE ALTERNATIVE DIRECT
THE RESPONDENT NO.1 TO DEPOSIT A SUM OF INR 3,50,00,000/-,
OUT OF THE AMOUNT SIPHONED OFF BY THE RESPONDENT NO.1
FROM THE LLP INTO THE ACCOUNT OF THE LLP TO ENABLE THE
PETITIONER TO MEET THE IMMEDIATE AND FORESEEABLE
OPERATIONAL COSTS AND EXPENSES OF THE BUSINESS OF THE
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AP.IM No. 4 of 2025
HC-KAR
LLP, PENDING THE FINAL ADJUDICATION OF THE ARBITRAL
PROCEEDINGS.
THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER
WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE R. NATARAJ
ORAL ORDER
This petition is filed under Section 9 of the Arbitration and Conciliation Act, 1996 (henceforth referred to as 'Act, 1996') seeking following reliefs:-
a. Pass an order directing Respondent No.1 to deposit the sum of INR 7.9 Crores (Rupees Seven Crores and Ninety Lakhs Only), being the amount siphoned off by the Respondent No.1 from the LLP in the LLP's Bank Account, IN THE ALTERNATIVE Pass an order directing Respondent No.1 to deposit the sum of INR 7.9 Crores (Rupees Seven Crores and Ninety Lakhs Only), being the amount siphoned off by the Respondent No.1 from the LLP with this Hon'ble Court in an interest bearing account;
IN THE ALTERNATIVE Pass an order directing the Respondent No.1 to deposit a sum of INR 3,50,00,000/-, out of the -4- NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR amount siphoned off by the Respondent No.1 from the LLP into the account of the LLP to enable the Petitioner to meet the immediate and foreseeable operational costs and expenses of the business of the LLP, pending the final adjudication of the arbitral proceedings;
b. Pass an ad-interim order directing Respondent No.1 to disclose on affidavit the complete particulars of all his movable and immovable assets, including but not limited to bank accounts, shares, properties, investments, beneficial interests, and interests in any companies, trusts or partnerships, whether held individually or jointly or through any person or entity (including but not limited to Stan Ventures and Go Dash acting for or on his behalf) to the extent necessary to secure the Petitioner's claim and prevent frustration of the arbitral award;
c. Pass an order restraining the Respondent No.1, his family, successors, servants, agents, representatives, affiliates, and any entities under his control from alienating, disposing of, transferring, or otherwise dealing with any of his assets, to the extent necessary to secure the Petitioner's claim and prevent frustration of the arbitral award;
d. Pass an ad-interim order attaching all the assets disclosed in the Affidavit to the extent necessary to -5- NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR preserve the subject matter of the arbitration proceedings, until disposal of the present arbitration proceedings;
e. Pass an ad-interim injunction restraining the Respondent No.1, or any person, company, entity, subsidiary, associate, servant, agent, or person claiming through or under him, from accessing, operating, or in any manner utilizing (1) the LLP's Bank Account, including initiating or approving any transaction or withdrawal therefrom, (2) from acting for, on behalf of, or representing the LLP in any manner or capacity whatsoever, whether in commercial dealings, communications, or otherwise, (3) from using, misappropriating, exploiting, copying, or disclosing any intellectual property (defined as Petitioner's IP and Petitioner's Brand Name) owned by or licensed to the Petitioner, including but not limited to the "Neil Patel Digital" brand, software, website, source code, marketing materials, client information or any other proprietary information and (4) to strictly comply with Clause 16 of the LLP Agreement dated 18.08.2022 produced as Annexure-E and to refrain from in any manner contacting any existing clients of the LLP; from soliciting clients, employees, or vendors of the LLP, and from engaging directly or indirectly in any competing business during the -6- NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR subsistence of the LLP and for a period of two years thereafter; pending disposal of the present petition;
f. Pass an ad interim injunction directing the Respondent No.2 to forthwith refrain from entertaining or acting upon any instructions received from the Respondent No.1 in respect of the Bank Account of the LLP (Account Name: Neil Patel Digital LLP and Account Number: 50200045507221) including but not limited to initiating, approving, or completing any transactions, whether pre-dated, post-dated, or otherwise, pending disposal of the present petition;
g. Pass an ad interim injunction directing Respondent No.1 to strictly comply with Clause 5.5(b) of the LLP Agreement dated 18.08.2022 produced as Annexure-E within a period of 5 days or such time as this Hon'ble Court may deem fit; by immediately handing over to the Petitioner all User IDs, passwords, access credentials, and administrative control for the LLP's electronic systems, including but not limited to its bank accounts, domain, email, applications, software, and hardware; and further, to restore the LLP's website and all social media platforms (defined as LLP's Social Media) operating under the Petitioner's Brand Name, to their original form and configuration, and not to tamper with, -7- NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR rename, redirect, deactivate or delete the same in any manner whatsoever.
h. Pass an ad interim injunction restraining the Respondent No.1, or any person, entity, servant, agent, or affiliate acting on his behalf, (1) from transferring, alienating, encumbering, or creating any third-party interest or rights in any of the tangible or intangible assets of the LLP, or in the rights and obligations under the LLP Agreement dated 18.08.2022 produced as Annexure-E including the Petitioner's proprietary rights therein and (2) from destroying, altering or otherwise making inaccessible to the Petitioner any data, information, or documentation regarding financial records, operational records, customer information or any other material containing the Petitioner's IP, methodologies, procedures, developments, discoveries, code, software, hardware, algorithms, technical know-how and other proprietary or confidential information regarding the LLP's business; i. Pass an order directing the Respondent No.1 to maintain status quo ante in respect of the LLP's legal and financial position, its business operations, assets, and all proprietary rights, and to act in accordance with the Response-Cum-Demand Notice dated 18.04.2025 passed by the Petitioner in accordance -8- NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR with the LLP Agreement dated 18.08.2022 produced as Annexure-E;
j. Pass ex-parte ad-interim orders in respects of the prayers (a) to (i) above;
k. Pass an order directing the Respondent No.1 for payment of legal costs incurred by the Petitioner arising out of the present proceedings; and l. Pass such other or further order(s), direction(s), or relief(s) as this Hon'ble Court may deem fit, just, and proper in the facts and circumstances of the present case, in the interest of justice. m. Pass such other or further order(s), direction(s), or relief(s) as this Hon'ble Court may deem fit, just, and proper in the facts and circumstances of the present case, in the interest of justice.
2. (i) The petitioner and respondent No.1 had entered into a limited liability partnership (LLP) dated 18.08.2022 for the purposes of carrying on business in the name and style of "Neil Patel Digital LLP'. The partnership agreement contemplated that respondent No.1 shall be liable for the day-to-day operations of the partnership. He was also provided with full access and information about the operations -9- NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR of the partnership including details and information relating to bank accounts, finances, business dealings, employees, clients, contracts etc., The agreement contemplated certain reserved matters which had to be decided upon and approved by the partnership. One of the reserved matters was, purchase of any fixed assets and incurring any capital expenditure for an amount of Rs.2,50,000/-. The petitioner contends that respondent No.1 was bound under certain obligations, which were set out in clause 15.1 of the partnership, which inter alia mandated that respondent No.1 without prior written consent of the firm shall not buy, order, contract or procure any property, goods or services for the partnership exceeding Rs.2,50,000/- and sign any cheques or transfer any amount from any LLP account for a sum exceeding Rs.2,50,000/-. It also contemplated that respondent No.1 shall not either by himself or through any other person, during the term he holds an interest in the partnership and for a period of two years thereafter, either directly or indirectly carry on or invest in or promote or work with or engage or interest in any business or activity that directly and/or indirectly competes with or is same or similar as the business or proposes to be undertaken by the
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NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR LLP. He was also under an obligation not to solicit any person who was at any time a customer or client of the partnership or persuade any such customer/client to cease doing business with the partnership or reduce the amount of business which any such customer/client did or had customarily done or might propose to do with the partnership. He was also under the obligation not to solicit or hire or entice away from the partnership any employee of the partnership.
(ii) The petitioner contends that respondent No.1 was managing the business of the firm. However, respondent No.1 had effected payment of Rs.99,99,900/- and Rs.1,00,00,000/- to an Advocate named, Mr. Kamaluddin Ahmad. After paying the advocate, a notice was caused on 15.04.2025 by the respondent No.1 to the petitioner for winding up of partnership firm as provided under clause 8.2 and respondent No.1 demanded a settlement as provided under clause 9.3(b) of the agreement. This notice was replied by the petitioner on 18.04.2025. Thereafter, respondent No.1 surreptitiously without notice and knowledge of the petitioner, transferred a sum of Rs.3,00,00,000/- and Rs.2,90,00,000/- as investment in another company in his name. The petitioner claims that
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NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR this transfer was made without proper authorization and that too, after respondent No.1 had made a request for winding up of the firm. The petitioner contends that before the winding up process had begun, the respondent No.1 had started a business similar to that of the firm and was enticing employees of the firm to joint the competing business started by him. The petitioner contends that partnership document itself contemplated settlement of disputes through arbitration and the seat of arbitration was agreed to be in Bengaluru. The petitioner is therefore, before this Court seeking for the aforementioned interim measures.
3. The learned Senior counsel for the petitioner contended that the respondent No.1 was given the responsibility to carry on the day-to-day activities to run the business of the firm. He contends that the respondent No.1 was bound under the agreement not to incur any capital expenditure or buy any goods or avail any services valued at more than Rs.2,50,000/- without the approval of the petitioner. He contends that in flagrant violation of this stipulation, he had transferred Rs.1,99,99,900/- to an Advocate unauthorisedly and later got a notice of winding up of the firm issued through
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NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR the same Advocate. He contends that respondent No.1 did not stop at that. He then unauthorisedly transferred Rs.5,90,00,000/- from the petitioner's account to be invested as equity in his name in another company. He contends that once the winding up notice was issued, the respondent No.1 could not have transferred any funds. Besides this, he contends that respondent No.1 has established and incorporated another venture to pursue the same business as that of the petitioner and is trying to woo away the customers of the petitioner as well as its employees. He contends that when parties are bound by a written agreement, the status-quo as mentioned therein should be maintained pending resolution of the larger disputes through arbitration.
4. (i) The respondent No.1 has opposed the petition by filing an elaborate statement of objections inter alia contending that the petition under Section 9 of the Act, 1996 is not sustainable as the petitioner has not invoked arbitration clause. It is contended that it was he who initiated winding up of the firm by causing notice dated 15.04.2025. He also contends that the partnership agreement dated 18.08.2022 was amended without his consent. He claims that one of the
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NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR clauses, terms and conditions of the amended agreement dated 18.08.2022 was atrocious, unilateral, one sided and prejudicial to his interest and that the petitioner was guilty of playing fraud on him by misrepresentation and cheating. He therefore, contended that the petitioner cannot place reliance on the amended and restated agreement and no interim measure can be claimed unless legality of the agreement dated 18.08.2022 is established.
(ii) The respondent No.1 has also denied the allegation of the petitioner that he had acted in an illegal and prejudicial manner. On the contrary, he contends that he was actively involved in carrying on the day-to-day affairs of the partnership from the year 2019 and that he had not in any way troubled the petitioner or the partnership agreement. He claimed that when he pointed out the atrocities committed by the petitioner through its other designated partner Ms. Rubeena Singh, the petitioner resorted to making allegations as a counter blast. He contends that he being the designated partner, is a joint owner of the assets standing in the name of firm. In support of his contentions, he has relied upon the judgments of the Hon'ble Apex Court in Veljiraghavji Patel vs. State of Maharashtra
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NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR [1964 SCC Online SC 185] and Perm Ballabh vs. Mathura Datt Bhatt [1966 SCC Online SC 268]. He therefore, contends that he is deemed to be authorized to deal with the money and properties of the firm.
(iii) As regards the allegations that he had orchestrated the siphoning of a sum of Rs.7.9 crores from the bank accounts of the firm, the respondent No.1 has denied the same. He claimed that ever since the commencement of the business of the firm throughout India, he, out of his sheer dedication and hard work, had contributed for the partnership to gain popularity and getting business. He claimed that he was instrumental in operating the bank account through respondent No.2 which had issued authorization to operate accounts and transfer/withdraw amounts without limiting the amount. He contends that based on this authorization, the firm was managed in an efficient manner without the involvement of the petitioner. The respondent No.1 has relied upon the video published by the other designated partner Mr. Mike Kamo in 2023, where he spoke highly of the respondent No.1 as being vital in the growth of the business not only in India but even in several other countries.
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(iv) The respondent No.1 also denied allegations of the petitioner that he was attempting to usurp the entire business and clientele of partnership and consequently, depriving the petitioner of its financial stake and commercial reputation. He claims that since 14.02.2024, the petitioner had taken over the website, domain and control over the running of the digital platform and respondent No.1 was never in control. He also denied the use of email ID through the domain of the partnership. He claims that alleged amount which was transferred cannot be the subject matter of the arbitration as the initiation of winding up pulls the plug on all transactions until the process of winding up as provided under clause 8.2 read with clause 9.3 of LLP agreement reaches conclusion. He therefore, contended that the interim measure sought for by the petitioner is not maintainable and is not a step in aid to the process of winding up of the firm.
(v) The respondent No.1 denies that the petitioner is a distinguished and leading organization having global presence for its end-to-end global digital marketing organization. He claims that he was informed about the fraud committed by the petitioner to the tune of Rs.2,50,00,00,000/-. An email
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NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR communication in that regard is also enclosed along with the statement of objections. He also placed on record certain online articles relating to the scam in which the petitioner was allegedly involved.
(vi) The respondent No.1 admits that he and the petitioner had jointly incorporated the LLP in the year 2019. However, he contends that the LLP agreement dated 18.08.2022 is shrouded in fraud and is a result of misrepresentation.
(vii) The respondent No.1 also contended that the digital assets of the partnership are jointly held by the petitioner and respondent No.1 and therefore, he is equally entitled to all rights which stand in the name of Neil Patel Digital LLP/ Neil Patel Digital LLC. He denies that the petitioner is a majority partner in the LLP even though it holds 70% of the profit and loss of the firm. He claims that when it comes to the ownership of the assets of the firm, it would be joint and equal.
(viii) The respondent No.1 contended that when the petitioner designated another person named, Ms. Rubeena Singh as the Managing Director of the firm, he did consent.
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NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR However, after her appointment, she started harassing all the employees, due to which the business environment was vitiated. Several mails were shot by him informing the petitioner about the conduct of Ms. Rubeena Singh which however, was not noticed by the petitioner. The respondent No.1 has alleged that appointment of Ms. Rubeena Singh was not in the best interest of the LLP as all the existing employees including him felt threatened and business of the firm slumped. He claimed that the petitioner showed no interest in ensuring business of the firm improved and that the same was evident from the various emails and correspondences prior to the issuance of legal notice dated 15.04.2025. He also contended that the transfer of funds by him cannot be termed as misappropriation, as statement of accounts in the account held by the firm in respondent No.2 established that several transactions exceeding Rs.2,50,000/- were done based on the authorization given to him. Therefore, respondent No.1 contends that the allegation of the petitioner that he was involved in several unauthorized transactions, was without any basis. He contends that funds transferred by him cannot be termed as misappropriation of the funds of the firm but at the
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NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR most can be treated as overdrawing of the amounts, which is subject to a detailed enquiry by the Arbitral Tribunal to be appointed by the Hon'ble Apex Court, where a request is pending consideration under Section 11(6) of the Act, 1996. He contends that it is always open for the petitioner to seek restoration of the funds by making a request before the Arbitrator under Section 17 of the Act, 1996. Thus, the respondent No.1 contends that until suitable enquiry is held, it would not be possible to decide, whether the transfer of funds made by him was with the prior approval of the designated partners or was in violation of the partnership agreement. He also denies the allegations of the petitioner that he was trying to siphon off and misappropriate the funds which was forthcoming from WhatsApp communications. It is also contended that respondent No.1 is also a partner in the firm and therefore, there can be no restraint against him and interim measures sought for against him, would cripple him in operating as partner of the firm.
5. The learned counsel for respondent No.1 while reiterating the above contentions submitted that respondent No.1 owing to various reasons had invoked clauses in the
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NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR partnership agreement, which provided for winding up of the firm. He submits that once a notice was issued under Rule 4 of the Limited Liability Partnership (Winding up and Dissolution) Rules, 2012, all issues will have to be adjudicated before the Tribunal which is National Company Law Tribunal constituted under the Companies Act, 1956. He therefore, contends that the petitioner cannot rush to this Court seeking for interim measure. He also contends that respondent No.1 had invested his own money and in view of the deadlock between the petitioner and respondent No.1, the respondent No.1 has merely transferred certain funds of the firm to a safe destination so as to protect his investment. He contends that respondent No.1 cannot be accused of misappropriating, as it was clearly shown in the account that the amount was invested in another company in his name. He contends that the question, whether the respondent No.1 is accountable for the said amount or not, are all matters which have to be adjudicated during winding up of proceedings or before the Arbitrator and no interim measures can be passed as sought for by the petitioner in this petition.
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6. I have considered the submissions of the learned Senior counsel for the petitioner as well as the learned counsel for the respondent No.1.
7. It is now well settled that the application under Section 9 of the Act, 1996 has to be considered on the same lines as an application under Order XXXIX Rules 1 and 2 of CPC. The time tested principles such as prima facie case, balance of convenience and comparative hardship that would be caused in not granting an order of injunction or interim measure, would also apply to an application under Section 9 of the Act, 1996. In this regard, it is profitable to refer to the judgment of the Hon'ble Apex Court in Adhunik Steels Ltd., vs Orissa Manganese and Minerals (P) Ltd., [(2007) 7 SCC 125. Interim measures are therefore, a step in aid to the final relief.
8. Coming to the case on hand, it is not in dispute that the petitioner and respondent No.1 had entered into limited liability partnership (LLP), which was evidenced by a document dated 18.08.2022. Some of the relevant clauses of the
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NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR agreement, which are necessary for the purpose of considering this application are extracted below:-
5.1 Day to day management:
Pradeep shall liable for the day-to-day operations of the LLP. However, NPD LLC and its Designated Partner shall be provided full access and information about the operations of the LLP at all times including details and information relating to bank accounts, finances, business-dealings, employees, clients, contracts, etc. as and when such information is sought by NPD LLC.
5.3 Reserve Matters
(a) to (j) xxxxxx
k) Purchase of any fixed assets or incurring of any capital expenditure for an amount above INR 250,000/- (Indian Rupees Two Hundred Fifty Thousand)
15. DUTIES AND OBLIGATION OF PRADEEP 15.1 Pradeep shall not without the prior written consent of the NPD LLC.
(a) to (e) xxxxx
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f) Buy, order, contract or procure any property, goods and services for the LLP exceeding INR 250,000/- (Indian Rupees Two Hundred Fifty Thousand)
(g) xxxxx
h) Sign any Cheque or transfer any amount from any LLP account for a sum exceeding INR 250,000/- (Indian Rupees Two Hundred Fifty Thousand).
16. NON-COMPETE/NON SOLICIT 16.1 Pradeep hereby irrevocably and unconditionally undertake that he shall not, either by himself or through any other person, during the term he holds an Interest in the LLP ("Non-Compete Period") and for a period of 2 (two) years thereafter, either directly or indirectly, (whether as a partner, joint venture partner, collaborator, contractor, shareholder, lender, advisor, principal, agent, director, Affiliate, distributor, proprietor, employee, consultant, nominee in any other capacity or manner whatsoever of a company, LLP, proprietorship firm, partnership firm or any other entity or body corporate, whether for profit or otherwise):
a) carry on or invest in, promote or work with or be engaged or interested in, any business or activity
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NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR that directly and/or indirectly competes with or is same or similar as the Business or proposes to undertake the same or similar business as that of the LLP, except through the LLP; and/or
b) xxxxxx
c) solicit any Person who is or has been at any time (i) a customer/client of the LLP (irrespective of whether the relationship between the LLP and such customer/client was originally established in whole or in part through the efforts of the Senior Personnel or any other employee of the LLP) or a lead provided by the NPD LLC, by offering or enticing such customer/client/lead to compete with the whole or part of the Business except to the extent of doing Business with such customer/client, or (ii) persuade any such customer/client to cease doing Business with the LLP, or reduce the amount of business which any such customer/client does or has customarily done or might propose to do with the LLP; and/or
23. DISPUTE RESOLUTION Except as otherwise provided by law, any dispute, difference or question arising out of or under or connected with this LLP Agreement which cannot be amicably resolved through negotiations between the Parties within thirty (30) business days of being so
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NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR notified by a Party or if such negotiations do not start within (fifteen) 15 days of such notification, shall be finally settled by arbitration by a sole arbitrator to be jointly appointed by the Parties in accordance with the provisions of the Arbitration and Conciliation Act, 1996 ('Arbitration Act'). The arbitration shall be conducted in English language in accordance with the provisions of the said Arbitration Act. Any arbitration award made shall be final and binding on the Parties the and not be subject to appeal and shall be enforceable in any court of competent jurisdiction. The seat and place of arbitration shall be Bengaluru, Karnataka. Such arbitral award(s) shall be binding on all parties to the dispute.
24. GOVERNING LAW This LLP Agreement shall be governed by the laws of India which are in force and which may be enacted by the Government of India from time to time.
25. JURISDICTION Subject to the provisions mentioned hereinbefore, competent courts in Bengaluru, Karnataka shall have jurisdiction to adjudicate over matters relating to or arising out of the present Agreement.
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9. It is therefore, evident that the respondent No.1 being the partner entrusted with the day-to-day management of the firm, was also under certain obligations namely that he would not bring about any transaction in capital goods which was valued at more than Rs.2,50,000/- and that he would not make any purchase of goods or avail services which was valued at more than Rs.2,50,000/- without the consent of petitioner. He was also under certain obligation not to get involved directly or indirectly in any similar business and was prohibited from soliciting any person or any customer of the firm and not to solicit or hire or entice away any of the employees. In the teeth of these clauses, it is seen from the records produced by the petitioner that respondent No.1 had transferred sum of Rs.99,99,900/- on 08.04.2025 and a sum of Rs.1,00,00,000/- on 09.04.2025 apparently towards legal expenses of an Advocate Mr. Kamaluddin Ahmad. Following this, a notice dated 15.04.2025 was issued at the instance of the respondent No.1 by Mr. Kamaluddin Ahmed for winding up of the partnership firm. After issuance of such notice, which must have arrested all transactions, the respondent No.1 transferred a sum of Rs.3,00,00,000/- on 17.04.2025 towards investment in GCT
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NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR India and a sum of Rs.2,90,00,000/- on 17.04.2025 towards investment in GCT India. Though the respondent No.1 has filed an elaborate statement of objections, he has not placed on record any permission or approval or consent given by the petitioner authorizing him to make such transfers. In the entire statement of objections, respondent No.1 has not even mentioned in whose name, such investment was made, despite the submission by the learned Senior counsel for the petitioner at the time of arguments that such investment is made in the name of respondent No.1. It is therefore, apparent that respondent No.1 has utilized the funds of partnership without proper authorization and has invested the same in his name in another company, particulars of which is not furnished and not provided to the partnership firm. Thus, the apprehension of the petitioner that respondent No.1 is not carrying on the day- to-day activities of the firm lawfully appears to be genuine.
10. This apart, the petitioner has alleged that the respondent No.1 is involved in a competing business and is also soliciting the customers and clients of the partnership firm as well as trying to entice away the employees of the partnership. A perusal of the statement of objections filed by the respondent
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NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR No.1 does not show that respondent No.1 has denied the allegations made by the petitioner. Therefore, pending appointment of arbitrator, status-quo of the affairs of the firm have to be maintained lest, the purpose of proceedings under the Act, 1996 will render it an empty formality.
11. In that view of the matter, the petitioner has made out a prima-facie case for grant of interim measures. This apart, the balance of convenience to grant some of the interim measures sought for by the petitioner lies in its favour. Going by the conduct of respondent No.1, the hardship that would be caused in refusing to grant injunction would be more to the petitioner as the respondent No.1 who is privy to lot of information of the petitioner such as customer database, support chain employees etc., may commit acts that would be detrimental to the existence of the petitioner. Accordingly, the following order is made:
ORDER
(i) This petition is allowed in part.
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NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR
(ii) The respondent No.1 is directed to deposit a sum of Rs.5,90,00,000/- (Rupees Five Crores Ninety Lakhs only) before this Court within a period of ten days from today. On such deposit, the Registry is directed to keep the amount in an interest earning fixed deposit in any nationalized bank for a period of one year.
(iii) The respondent No.1 is restrained by an order of injunction, either directly or indirectly, from accessing, operating or utilizing the petitioner's bank account, in any manner, whatsoever and from acting for or on behalf of or representing the petitioner, in any manner whatsoever and from using, misappropriating, exploiting, copying or disclosing any intellectual property owned by or licensed to the petitioner.
(iv) The respondent No.1 is also injuncted, in any manner either directly or indirectly, contacting any existing clients of the partnership and/or from soliciting business from them in any
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NC: 2025:KHC:38445 AP.IM No. 4 of 2025 HC-KAR manner or to reduce business with the petitioner etc. He is also restrained from engaging directly or indirectly in any competing business during the subsistence of the partnership with the petitioner and for a period of two years thereafter.
(v) The respondent No1 is also injuncted, in any manner either directly or indirectly, soliciting or hiring or enticing any employees of the petitioner.
(vi) It is open for the petitioner to seek the other reliefs before the arbitrator once the Tribunal is constituted in accordance with law.
Sd/-
(R. NATARAJ) JUDGE PMR List No.: 1 Sl No.: 16