Karnataka High Court Grants Ex-Parte Injunctions In Favour Of Neil Patel Digital LLC In Dispute Over Breach Of LLP Agreement

The Karnataka High Court bench of Justice Suraj Govindaraj has passed ex-parte injunctions under Section 9 of the Arbitration and Conciliation Act, 1996, in favour of Neil Patel Digital LLC (“NPD LLC”). The disputes had arisen from breach of the covenants of a Limited Liability Partnership Agreement. The LLP Agreement contained various negative covenants restricting the Respondent No. 1 in respect of, among other things, transfer of funds beyond stipulated limits, appointment of key managerial personnel, induction of partners, etc.. Alleged violations of these covenants by the Respondent No. 1, including suspicious transactions, gave rise to disputes inter se the parties. Serious allegations were made against Respondent No. 1 as regards siphoning of nearly ₹7.9 crores. As per Clause 15.1 of the amended and restated LLP Agreement executed between the Petitioner and Respondent No. 1, which contained a restriction on signing cheques or transferring any amount exceeding ₹2.5 lakhs from the LLP's bank account. The court perused the account statements and noted that amounts exceeding ₹2.5 lakhs had been transferred, which, ex facie, violated Clause 15.1H of the LLP Agreement. Consequently, NPD LLC filed a petition under Section 9 before the Karnataka High Court, seeking urgent interim protections. The Court granted the following reliefs: (1) restraining the Respondent No. 1 from transferring any funds of the LLP from its bank account; (2) restraining the Bank (Proforma Respondent No. 2) from acting upon any instructions issued by the Respondent No. 1 regarding the transfer of any funds; (3) restraining the Respondent No. 1 from dealing with, alienating, encumbering, or exploiting any tangible or intangible assets of the LLP; and (4) permitting NPD LLC to publish a public notice of the order in the relevant newspapers, to notify the general public of the restrictions imposed on Respondent No. 1 through the order. The Petitioner was represented by Shiv Sapra, Partner, assisted by Christopher Edwin, Partner; Syed Shujath Mehdi, Principal Associate; and Aviral Tripathi, Associate (Kochhar & Co.). Case Title: NEIL PATEL DIGITAL LLC Vs. PRADEEP KUMAR RAJARATHINAMCitation No: 2025 LiveLaw (Kar) 160 Case Number: AP.IM 4/2025(KAHC010291822025) Date of Order: 24/04/2025 Click Here To Read/Download The Order

Karnataka High Court Grants Ex-Parte Injunctions In Favour Of Neil Patel Digital LLC In Dispute Over Breach Of LLP Agreement

Tazeen Ahmed

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