Bangalore District Court
Ms.Payal Sandhu Khurana vs Alabaama Design Consultants Llp on 13 December, 2021
IN THE COURT OF THE LXXXVI ADDL. CITY CIVIL JUDGE
AT BANGALORE [CCH.No.87]
Present:
Sri.SUNIL ANDANEPPA SHETTAR, B.Sc., LLB., (SPL)
LXXXVI ADDL. CITY CIVIL JUDGE
Dated this the 13th day of December, 2021
Com.A.A.No.90/2021
Plaintiff/s : Ms.Payal Sandhu Khurana
Q 503, Rohan Jharokha Apartments,
Phase 2, Yemalur Main Road,
Behind HAL Airport,
Bengaluru-560 0037.
(By S.A, Advocate)
- Vs -
Defendant/s : 1. Alabaama Design consultants LLP
Represented by its Chairman
Mr.Sukant Gupta
Having its registered office at,
No.325, 4th cross, OMBR Layout,
Banaswadi Post, Bengaluru-560 043.
2. SDSS Management Services LLP
Represented by its Authorized Signatory
MR.Deepak Nagraj
Having its registered office at,
No.325, 4th cross, OMBR Layout,
Banaswadi Post, Bengaluru-560 043.
3. Mr.Udaya Shankar Krishnappa
Designated Partner,
Alabama Design Consultants LLP
No.332 B, Flat No.301, Archita 3, 18 th cross,
2 Com.A.A.No.90/2021
Ideal Home Colony, Raja Rajeshwari Nagar
Bengaluru-560 098.
4. Mr.Prabhuprit Singh Kochar
Director, Adrianse India Private Limited
Sitting out of it's Bangalore Office at,
1st Floor, 4, PDS Tower,
Gangadhara Chetty Road,
Ulsoor, Bangalore, Karnataka-560042.
5. Mr.Atul Kulkreja
Director, Adrianse India Private Limited
Sitting out of it's Registered Office
B-37, Geetanjali Enclave,
New Delhi-110 017.
6. Mr.Deepak Nagraj
Director, Adrianse India Private Limited
Sitting out of it's Bangalore Office at,
1st Floor, 4, PDS Tower,
Gangadhara Chetty Road,
Ulsoor, Bangalore, Karnataka-560042.
7. Adrianse India Private Ltd,
Represented by its Director
Mr.Atul Kukreja,
Having its registered office at,
B-37, Geetanjali Enclave,
New Delhi-110 017.
(R.1 to 3 by T.S.R, Advocate)
(R.4, 7 by M.B.A, Advocate)
3 Com.A.A.No.90/2021
JUDGMENT
This is the petition filed by the petitioner Under Section 9 of the Arbitration & Conciliation Act, 1996, seeking an order of injunction restraining the respondents No.1 to 3, their agents and all the persons acting on their behalf from giving effect to the amendment to clause 6 and clause 13 of the main LLP agreement dated 25.07.2019 pending resolution of the disputes through arbitration. The petitioner has also sought an order of injunction restraining the respondents No.1 to 3, their agents and all the persons acting on their behalf from altering the capital structure of the respondent No.1 LLP in any manner or handling or removing or alienating or diluting the holding of the petitioner of 15% in the capital structure of respondent No.1 as per the supplementary agreement dated 02.07.2019 pending resolution of the disputes through arbitration.
2. The brief facts of the case of the petitioner as narrated in the petition are as under:-
That the petitioner is a qualified architect having professional work experience for nearly 20 years in the area of interior architecture and design as relevant to corporate real estate and is associated with top design firms in the country 4 Com.A.A.No.90/2021 and has also gained reputation for handling the business with reputed MNC clients.
3. The respondent No.1 is a Limited Liability Partnership established as per Sec.23(4) of the Limited Liability Partnership Act, 2006 having its registered office at the address shown in the cause title of the petition and is engaged in the business of engineers, consultants and contractors including civil, electrical, mechanical etc., and other related services and provide integrated turn key solutions.
4. The petitioner is a partner in the respondent No.1 having contributed 15% to the capital of respondent No.1. The respondent No.2 is also a Limited Liability Partnership engaged in the business of providing management, consulting and allied services and is holding a majority stake of 70% in the respondent No.1. The respondent No.4, respondent No.6 and the chairman of respondent No.1 by name Sukant Gupta are the partners of respondent No.2.
5. The respondent No.3 who is the director of respondent No.7 is also a partner of respondent No.1 holding 15% of the capital of respondent No.1.
6. The respondent No.4 who is also the director of respondent No.7 and erstwhile partner of respondent No.1 has resigned from the partnership by way of "Supplemental limited 5 Com.A.A.No.90/2021 liability partnership agreement" dated 30.07.2019. The fourth respondent is also the partner of respondent No.2.
7. The respondent No.5 who is also the director of respondent No.7 and share holder even prior to the acquisition of respondent No.7 in year 2019. Subsequent to the acquisition of respondent No.7 by respondent No.1, the respondent No.5 holds 30% of the stake in respondent No.7 and is obligated to exit the respondent No.7 on or before 31.03.2015 as per the terms of acquisition entered in the year 2018.
8. The respondent No.6 who is also the director of respondent No.7 is the authorized signatory of respondent No.2 and also the director of Artizen Interior Pvt., Ltd, and D and M building products pvt, Ltd., along with respondent No.4 and Mr.Sukant Gupta.
9. The respondent No.7 is a company registered under the companies act, 1956, which is represented by its director i.e., respondent No.5.
10. The respondent No.3 who had resigned from his employment had signed a partnership agreement on 27.04.2018 with the respondent No.4 in the name of ''Design Alphabet''. The said 'Design Alphabet' acquired 70% of the share capital of respondent No.7 on 18.03.2019 by way of a 6 Com.A.A.No.90/2021 share purchase agreement entered between 'Design Alphabet' through its authorized signatory i.e., respondent No.4, the respondent No.5 and Adrianse Group International Limited (AGIL). The said AGIL sold its remaining 1,50,000/- equity shares in the respondent No.7 and exited the company and the respondent No.5 sold 60,000/- equity shares of the company and retained 90,000/- equity shares of the company. Consequent to the execution of SPA, the two share holders of the respondent No.7 were 'Design Alphabet' and respondent No.5. The 3rd respondent was inducted into the board as a director of respondent No.7. The erstwhile director of defendant No.7 by namd Mr.Ronald Adrianse, Mrs.Pooja Kukreja and Mr.V.Murali resigned on 31.03.2018, 08.06.2019 and 15.06.2019 respectively.
11. In the meanwhile another LLP by name M/s ADA Design Consultants LLP was floated by respondent No.3 and 4 which is still active.
12. In the meanwhile the 'Design Alphabet' was converted into a Limited Liability Partnership as "Albama Design Consultants LLP" i.e., respondent No.1 by way of main LLP agreement dated 25.07.2019, in which the respondents No.3 and 4 who were the only two parties to the LLP agreement were named as 'Designated Partners' of 7 Com.A.A.No.90/2021 respondent No.1 and the profit sharing ratio between them was in the ratio of 90:10 as per clause 6 of the agreement. Thereafter the respondent No.4 transferred shares held by him in respondent No.7 to the ownership of respondent No.1 on 25.07.2019 and thereby the respondent No.1 became the majority stake holder of holding of 70% of share capital in respondent No.7.
13. Thereafter a 'Supplemental Limited Liability Partnership Agreement' dated 30.07.2019 was entered into between the petitioner and the respondents No.2 to 4, under which the petitioner was inducted as a technical partner of respondent No.1 with a stake of 15% of the profits. Likewise the respondent No.3 as a technical partner was holding a stake of 15% and the respondent No.4 as a financial partner/investor was holding a stake of 70% in respondent No.1. The respondent No.2 was inducted into the respondent No.1 in place of respondent No.4 to hold stake and receive 70% of the profits. As per the supplementary agreement the action for appointment of Mr.Sukanth Gupta as a designated partner of respondent No.1 and formalizing the resignation of respondent No.4 as a partner of respondent No.1 and rectification of the main LLP agreement was made.
8 Com.A.A.No.90/2021
14. As per the supplementary agreement there was an understanding between the parties that the respondent No.1 will be a holding entity in which the respondent No.7 as its primary asset which has to act as a front for all business transactions. The petitioner at the instance of respondents No.4 and 6 has provided services to the respondent No.1 company from 03.04.2019, but there was no written contract for employment and the petitioner earned a salary on par with respondent No.3 from time to time. Because of the hard work and services provided by the petitioner and the respondent No.3, the revenue of the respondent No.7 was drastically shotup to 70 crores from seven crores. The petitioner and the respondent No.3 had initiated talks with the remaining partners for higher salary and had shared with the partners that there were discrimination and sexism in the respondent No.7. It is alleged by the petitioner that the increase in the yearly emoluments given to the directors of the company were discriminatory and she had raised the issue of discrimination and other allegations.
15. Thereafter, the petitioner on 06.07.2020 had attended a private meeting with respondent No.4 in which she was asked to resign as a additional director of respondent No.7 and also as a partner in respondent No.1 and in return she was 9 Com.A.A.No.90/2021 offered a severance payment of Rs.50,00,000/- inclusive of goodwill amount of Rs.35,00,000/- which was protested by the petitioner. It is further alleged that all the email addresses of the petitioner and her digital signature was withheld by the respondent No.7 without prior notification. Thereafter, the petitioner has received a notice of separation from respondent No.4 through email for further discussion and in that aspect various email communications were exchanged.
16. It is further contended that as per the financial statements of respondent No.7 for the financial year 2019- 2020, no dividend was to be paid by the company despite increase in the revenue, which was brought to the notice of directors of respondent No.7. The petitioner has further alleged that there is an improper management of the respondent No.7 company with respect to the transactions.
17. The petitioner has not received any reasons for termination of employment. The petitioner also demanded that she is to be given indemnity for any false disclosures or actions undertaken by the company during her tenure at respondent No.7. The over all allegations of the petitioner against the directors of the respondent No.7 company is that the objections raised by her in the board meeting were not properly represented and her demands were rejected ignoring 10 Com.A.A.No.90/2021 her status as additional director of respondent No.7. The petitioner has also attended the virtual board meeting dated 04.09.2020 with respondent No.4 wherein she has made request for nomination of mediators for amicable resolution of disputes and to ensure that she is permitted to make suitable arrangement for her exit from respondent No.7, which were rejected by respondent No.4 through 'whatsapp' message on 13.10.2020.
18. Thereafter the petitioner received an email dated 18.11.2020 from the chairman of respondent No.1 about the meeting of partners held on 25.11.2020 and also the amendment proposed to clause No.13 with respect to expulsion of partners. Thereafter, the petitioner sought for remote attendance of the meeting through video conferencing, but ignoring the same, they went on to approve the financial statement of respondent No.1 and the amendment to clause
13.
19. Thereafter, the petitioner received a notice dated 25.10.2020 from respondent No.1 stating that she was required to make a payment of Rs.1,50,000/- towards capital contribution as agreed under the main LLP and to sign the second supplementary agreement incorporating a change to clause 13. The amendment to clause 13 of the 2 nd 11 Com.A.A.No.90/2021 supplementary agreement was executed by the majority partners without the consent of the petitioner. The petitioner has paid the capital contribution on 29.11.2020 as demanded by the respondent No.1 through online.
20. It is the allegation of the petitioner that the partners of respondent No.1 have unilaterally conducted the meetings excluding her and have taken decisions on extremely important matters. Various allegations of impropriety has been made against the partners of respondent No.1. The decisions taken by the partners of respondent No.1 are in contravention to the protection of interest of partners as per clause 13.1 of main LLP. Various allegations have been made against respondent No.4 in ousting the petitioner from the employment of respondent No.7. Though the petitioner has refrained from signing second supplementary agreement dated 25.11.2020, the respondent No.1 has considered the irregular amendment. The petitioner was not given a chance to discuss or dispute the validity of her exclusion from attending the meeting. The petitioner by disputing the outcome of the meeting dated 25.11.2020 as tainted and vitiated claims that all the resolutions passed therein are illegal and void abinitio.
12 Com.A.A.No.90/2021
21. The petitioner has attended the meeting dated 15.03.2021 and there were no discussions regarding the alleged loan taken by the respondent No.1 and she had expressed her objections in the meeting about the repayment of the alleged loan to the respondent No.5. The petitioner has not been provided with any documents pertaining to the said loan. The petitioner has not at all agreed for further capital contribution and also for the amendment to clause 13 of the main LLP agreement. It is alleged that the respondents No.1 to 7 are hand in glove in malicious and wrongful campaign against the petitioner and are taking undue advantage of the petitioner as a minority stake holder.
22. The respondent No.2 has sent a letter dated 17.04.2021 whereby the partners of respondent No.1 were informed that the respondent No.2 was willing to contribute capital contribution amount of Rs.37,50,000/-, which was allegedly due to be paid by the petitioner and unilaterally called for the appropriate documentation for the revision of capital. The petitioner has replied for the same stating that it is unjust and illegal and has not agreed for the same.
23. The respondents No.1 to 3 have gone ahead with the capital contribution needed for the repayment for the alleged loan payable by the respondent No.1 to respondent No.4. it is 13 Com.A.A.No.90/2021 alleged that the respondents No.1 to 3 have blindly following the dictates of respondent No.4 and have unilaterally resorted to alter the capital contribution structure of respondent No.1. The alteration to the capital structure of respondent No.1 is in total disregard to clause 20 of the main LLP agreement. The petitioner claims that she has made out a prima facie case and balance of convenience leans in her favour. She also claims that greater hardship will be caused to her if the temporary injunction as claimed in the petition is not granted. Hence, on these grounds the petitioner has prayed to allow the petition.
24. The respondents No.1 to 3 have resisted the petition by filing their objections. The respondents have raised preliminary objections that the pleadings are not in compliance with the mandatory requirements of arbitration act and rules and the provisions of CPC as well as civil rules of practice.
25. It is also their contention that the contribution of the applicant is Rs.1,50,000/- and therefore the subject matter of the dispute is below the specified value. There is no arbitration agreement between the petitioner and respondents No.4 to 7 and hence, the petition is not maintainable against the respondents No.4 to 7. Since the amendment to clause 6 and 13 of the main LLP agreement have already been given effect and filed with ROC, the petition has become infructious. 14 Com.A.A.No.90/2021
26. The respondents No.1 to 3 defending the amendments to clause 6 and 13 of the LLP agreement dated 27.05.2019 have contended that there is no breach of law or the terms of the mian LLP agreement and since the petitioner has failed to make her additional capital contribution to repay the loan taken by the respondent No.1, cannot claim the reliefs of injunction as prayed in the petition.
27. It is the specific case of the respondents No.1 to 3 that the respondent No.4 in the year 2017-18 with an intention to establish an independent venture of design related activities and also design, building and construction, based on the designs that the venture would create for the business got in touch with the petitioner, respondent No.3 and other persons and after thorough discussion came forward with a creation of partnership on 04.04.2018 by the name 'Design Alphabet' and the partners of the said firm were respondents No.3 and 4.
28. Thereafter, the respondents No.3 and 4 acquired 70% of the share holding of respondent No.7 on 18.03.2019 by way of share purchase agreement. At that time the 'Design Alphabet' was not having enough funds to acquire share holding of respondent No.7 and therefore the respondent No.4 being one of the partners provided the required amount. 15 Com.A.A.No.90/2021
29. Thereafter, the petitioner though never being the partner of 'Design Alphabet' on coming to know of acquisition of 70% of share holding of respondent No.7, was intrested in being a partner in the venture. The respondents No.3 and 4 under took all the initial risk in the venture of 'Design Alphabet'. Now the petitioner wanted to reap the benefits of the efforts made by others without any effort of her. Accordingly, the petitioner joined the venture by becoming an employee of respondent No.7 on 03.04.2019. In the meanwhile the 'Design Alphabet' was registered as Limited Liability Company i.e., is the respondent No.1 on 25.07.2019 in which the respondents No.3 and 4 were the designated partners and the petitioner was also inducted as a partner on 29.08.2018 by the LLP agreement dated 25.07.2019.
30. By virtue of the amendment to the main LLP agreement dated 25.07.2019 and first supplementary agreement dated 29.08.2019, the respondent No.1 under went changes, whereby the respondent No.4 resigned as a partner and the respondent No.2 and the petitioner were made partners in respondent No.1. The respondent No.1 continued to hold 70% of the share holding in respondent No.7 through which the business of design and build are being carried out. The respondents No.1 to 3 by denying all the grounds 16 Com.A.A.No.90/2021 mentioned in the petition in toto have prayed to dismiss the petition.
31. The respondents No.4 to 7 have also filed their separate objections and resisted the petition. It is the case of the respondent No.4 to 7 that the petitioner had been employed by the respondent no.7 as a 'principal' on 03.04.2019 and her employment came to an end on 15.09.2020. The petitioner is in no way related to respondent No.7 and her employment is not the subject matter of the proceedings before the court. The respondents is neither necessary nor proper to the proceedings. The petitioner herself claimed that the alleged arbitral agreement exists between herself and respondent No.1 to 3. The allegations made by the petitioner against all the respondents are flatly denied.
32. Based on the contentions of the respective parties, and the materials available on record, the following points arise for my consideration:-
(1) Whether the applicant has made out sufficient grounds for grant of injunctions as an interim measure U/s.9 of the Arbitration and Conciliation Act as prayed in the main petition?
(2) What Order ?17 Com.A.A.No.90/2021
33. Having heard the arguments of both the counsels the entire material available on record, I answer the above point as under:
Point No. 1 : - In the Affirmative.
Point No. 2 : - As per my final orders for the following reasons.
REASONS
34. Point No.1:- The preliminary objection raised by the learned counsel for the respondents No.1 to 3 is that the petitioner has not mentioned specified value of the subject matter of the petition and hence this court has no jurisdiction to entertain the petition. The said aspect was discussed in the order at the time of passing of orders on I.A.No.1 and it has been held that according to the petitioner the value of the holding of the petitioner in respondent No.1 is not less than Rs.15,00,000/- as stated in para No.64 of the petition and hence the specified value is more than Rs.3,00,000/- as required under section 6 the Commercial Courts, Act, 2015.
35. The fact that the applicant came to be inducted as one of the partner of respondent No.1, LLP with a holding of 15% in the capital structure by virtue of first supplementary agreement dated 30.01.2019 is not in dispute. It is also not in dispute that the respondents No.2 and 3 are also the partners 18 Com.A.A.No.90/2021 of respondent No.1 with a holding of 70% and 15% in the capital structure of respondent No.1 and that the partners of respondent No.1 are governed by the main LLP agreement dated 25.07.2019.
36. In order to appreciate the rival contentions of the respective parties, it is necessary to go through the clause No.6 and 13 as well as clause No.20 of main LLP. Clause No.6 of the main LLP agreement is in respect of capital contribution of LLP, profit and loss sharing ratio and partners contribution. Clause No.13 of the main LLP is in respect of expulsion of a partner and clause 20 pertains to powers of designated partner requiring consent of partners. On going through the clause No.6, which pertains to capital contribution as well as capital and loss sharing ratio of a partners, it reveals that if at any time further capital is required for the purpose of LLP, the same shall be additionally contributed by the partners as may be agreed upon between and among the majority of the existing partner and may or may not be in the proportion as agreed. In other words further contribution towards the capital of LLP should be on the basis of the agreement of the partners and among the majority of the existing partners. 19 Com.A.A.No.90/2021
37. So far as expulsion of partners is concerned as per clause 13, no majority of partners can expel any partner except in the situation where any partner has been found guilty of carrying of activity/business of hte LLP with fraudulent purpose. Such expulsion shall be only after serving a show- cause notice in writing on that partner giving seven days time for his response and in that event the partner expelled shall be entitled to the benefits of a retitring partner and be libale to the same obligations applicable to a retitring partner in accordance with the provisions of the agreement in that behalf.
38. As per clause 20 of the main LLP agreement any alteration/amendment or change in the LLP agreement including any change of main business of the LLP shall not be valid unless it is reduced to writing as a supplement to this agreement duly accepted by majority of partners of the LLP or his/her legal representatives as on the relevant date of alteration, amendment or change and increase of reduction in the amount of capital of the company.
39. On going through the contentions of the respective parties and the documents placed before the court, the dispute has arisen between the partners of respondent No.1 with respect to the loan of respondent No.4, and further contribution towards the capital structure of R.1 and 20 Com.A.A.No.90/2021 amendment to clause 6 and 13 of main LLP. The petitioner is seriously disputing the claim of the respondents No.2 and 3 with respect to the repayment of the alleged loan of respondent No.4 and further contribution towards the capital structure of respondent No.1. On perusal of the copy of LLP agreement dated 25.07.2019 furnished by the counsel for the petitioner there is a clause for settling the dispute between the partners. As per clause 34.0 and 34.1 of the LLP agreement dated 25.07.2019, all disputes between the partners or between the partner and LLP arising out of the agreement, which cannot be resolved in terms of the agreement shall be referred for arbitration as per the provision of Arbitration and Conciliation Act, 1996. Hence, on going through the pleadings of the respective parties and the materials available on record a dispute has arisen between the parties and as per the arbitration agreement the same has to be resolved through the process of arbitration.
40. At this juncture it is necessary to go through the requirements of Sec.9 of the Arbitration and Conciliation Act, 1996. As per Sec.9 of the Arbitration and Conciliation Act, 1996, the parties are permitted to seek interim measure in order to safeguard their interest if the other party violates the terms and conditions of the agreements. Any contracting 21 Com.A.A.No.90/2021 party is at liberty to file an application U/s 9 of the said act for interim measure during or before the arbitration proceedings.
41. The principle governing the grant of ad-interim injunction is to maintain the status-quo. The grant of an interim relief in regard to the nature and extent thereof depends upon the facts and circumstance of each case and no strait - jacket formula can be laid down. In other words the object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages. No doubt grant of temporary injunction is discretionary, but such discretion is to exercised in a judicious manner. The three cardinal principles while granting an order of temporary injunction is that the plaintiff has to make out a prima-facie case, the balance of convenience should be in favour of plaintiff and greater hardship will be caused to him if the temporary injunction is not granted.
42. The learned counsel for the petitioner has relied upon the judgment of the Hon'ble Supreme Court of India in C.A.Nos.141-143/1999 decided on 13.01.1999 between Sundaram Finance Ltd., V/s NEPC India Ltd., wherein the scope of Sec.9 and 21 of the Arbitration and Conciliation Act, 1996 has been dealt with. I have gone through the said judgments 22 Com.A.A.No.90/2021 and as held by the Hon'ble Supreme Court, this court has jurisdiction to pass interim orders even before commencement of the arbitral proceedings and before appointment as an arbitrator.
43. The Hon'ble High Court of Orissa in its judgment reported in 2006 SCC online Orissa 68 has discussed the requirement of Sec.9 of the Arbitration and Conciliation Act, 1996. In the said judgment the Hon'ble High Court at para No.29 has discussed that :
" The order U/s.9 can be passed by way of an interim measure of protection before or during the arbitral proceeding or at any time after making of arbitral award but before it is enforced in accordance with Sec.36 of the Act. So, it is an interim measure of protection. The act is implicit that the dispute must have arisen, it is referable to arbitration tribunal and when an application U/s.9 is filed before commencement of the arbitral proceeding, there has to be manifest intention on the part of the applicant to take recourse to the arbitral proceeding, if at the time when application U/s.9 is filed, the proceeding has not commenced U/s.21 of the Act. While exercising the jurisdiction U/s.9, the court should satisfy itself that 23 Com.A.A.No.90/2021 effective steps have been taken to commence the arbitral proceeding. The court could also pass a conditional order to put the applicant to such term as it may deem fit with a view to see that steps".
"The party having succeeded in securing an interim measure of protection before arbitral proceedings cannot afford to sit and sleep over the relief, conveniently forgetting the 'proximately contemplated' or 'manifestly intended' arbitral proceedings itself. If arbitral proceedings are not commenced within a reasonable time of an order U/s.9, the relationship between the order U/s.9 and the arbitral proceedings would stand snapped and the relief allowed to the party shall cease to be an order made 'before' i.e., in contemplation or arbitral proceedings. The court, approached by a party with an application U/s.9, is justified in asking the party and being told how and when the party approaching the court proposes to commence the arbitral proceedings. Rather, the scheme in which Sec.9 is placed obligates the court to do so. The court may also while passing an order U/s.9 put the party on". 24 Com.A.A.No.90/2021
44. In the case on hand the learned advocate for the petitioner has filed a memo on 26.11.2021 narrating the steps taken by the petitioner for appointment of an arbitrator and has furnished the copies of notices sent to the respondents for appointment of an arbitrator. On going through the said memo and the notices the petitioner has taken steps for an appointment of an arbitration and hence there is no violation of Sec.9 (2) of Arbitration and Conciliation Act, 1996. The materials have been placed to show that the petitioner he has taken effective steps for appointment of an arbitrator in terms of Sec.21 of the act.
45. The materials placed by the petitioner at this stage are suffice to hold that a dispute has arisen between the parties which is referrable to the arbitral tribunal. Considering the contention of the respective parties and the materials available on record, at this stage the applicant has made out a prima-facie case. Admittedly the applicant is not a signatory to the second supplementary agreement. The disputes arisen between the parties have to be resloved by way of arbitration as per the arbitration agreement and till then, the parties have to maintain status-quo with respect to the capital structure of the partners of respondent No.1 and also that the terms of the LLP agreement should remain intact. In other words the 25 Com.A.A.No.90/2021 respondents should be restrained from giving effect to the amendment to clause 6 and 13 of the main LLP. The petitioner has shown that their exists a prima-facie case in her favour. The balance of convenience also leans in favour of the petitioner. No hardship will be caused to the respondents No.1 to 3, if the injunction is granted. Under the facts and circumstances of the case without further discussion on the merits of the case I am of the opinion that the applicant is entitled for injunction.
46. Rule 9 (4) of the High Court of Karnataka Arbitration (proceedings before the courts) Rules, 2001 reads as under:
In the case of an application for interim measure made before initiating arbitral proceedings, if the arbitral proceedings are not initiated within three months from the date of the presentation of the application U/s 9, any interim order granted shall stand vacated without any specific order being passed by the court to that effect. Hence, I answer the above point in the 'Affirmative' and proceed to pass the following:
ORDER The petition filed by the petitioner U/s 9 of the Arbitration and Conciliation Act, 1996 is hereby allowed with costs.26 Com.A.A.No.90/2021
It is hereby ordered that the respondents 1 to 3, their agents and all the persons acting on their behalf are restrained by an order of injunction from giving effect to the amendment to clause 6 and 13 of the main LLP agreement dated 25.07.2019 and also from altering the capital structure of the respondent No.1 in any manner as per the supplementary agreement dated 02.07.2019.
It is hereby made clear that the order of injunction shall remain inforce for the period of 90 days or commencement of the arbitration proceedings, whichever is earlier.
The petition against the respondents No.4 to 7 is hereby dismissed.
[Dictated to the stenographer online, transcribed & computerized by her, corrected on computer and signed by me then pronounced in the Open Court, dated this the 13th day of December, 2021] (SUNIL.A.SHETTAR) LXXXVI Addl. City Civil Judge Bangalore.