Interim relief for firm expenses granted while rights remain open in pending arbitration-related proceedings

Ad interim relief was granted in a partnership deadlock to permit withdrawal of funds from the firm's accounts for payment of staff salary, bonus and other outstanding expenses pending the section 9 petition. The Court held that no prejudice would be caused by allowing the limited disbursement, while keeping the parties' rights and contentions open. The dispute over the existence of an arbitration agreement was expressly left undecided, and the withdrawal was confined to the specified operational liabilities.

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Issues: Whether ad interim relief should be granted permitting withdrawal of funds from the firm account to disburse salary, bonus and outstanding expenses pending the section 9 petition, without prejudice to the parties' rights and contentions.

Analysis: The matter involved a deadlock between the parties in the running of the firm and the immediate need to meet staff salary, bonus and other outstanding liabilities. The Court found that no prejudice would be caused to the respondents if the specified amount was allowed to be withdrawn for disbursement of these expenses, subject to the parties' rights and contentions remaining open, including the dispute regarding the existence of an arbitration agreement.

Conclusion: Ad interim relief was granted permitting withdrawal of Rs. 1,71,55,668/- from the suit firm's accounts for payment of salary, bonus and other outstanding expenses.

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