The Bombay High Court has granted interim protection to Clippings LLC and its Indian subsidiary in a suit seeking recovery of ₹222.62 crore over alleged diversion of company funds. Justice Arif S. Doctor directed the defendants to disclose their assets and financial records and granted limited interim relief restricting dealings with their assets.
Background
The suit was instituted by court-appointed receivers of Clippings LLC, a Delaware-incorporated company, against its former chief executive officer, Vinayak Shrivastav, and seven other defendants.
According to the plaintiffs, Shrivastav obtained a $53.15 million loan from Park View SPV III in October 2025, purportedly to refinance an existing debt and meet the company's working capital requirements. They alleged that $23.27 million was subsequently diverted to Shrivastav and other defendants instead of being used for its stated purposes.
The plaintiffs relied on a forensic accounting memorandum that identified payments from company accounts to several defendants. The defendants disputed the allegations, offering explanations for the transactions and questioning the plaintiffs' conduct, authority to institute proceedings and alleged suppression of relevant documents.
After considering the rival submissions, Justice Doctor found that the plaintiffs had established a strong prima facie case for limited interim relief. The Court noted that Shrivastav had not specifically addressed the serious allegations concerning alleged forgery and fabrication of the credit agreement.
The Court observed:
"The material placed before this Court, including the Nardello Memorandum, is in my view sufficient to prima facie establish that monies belonging to Clippings have found their way to the Defendants."
The Court also considered the defendants' argument that the plaintiffs had withheld material documents. It declined to reject the interim application on that ground at this stage, observing that the receivers were acting to safeguard the company's interests.
Justice Doctor further stated:
"The Plaintiffs have, in my view, more than adequately made out a prima facie case and established that the balance of conveniences is in favour of granting the limited ad interim relief."
The High Court granted limited ad interim relief under prayer clauses (a), (b) and (f) of the application. It directed the defendants to file affidavits disclosing their assets and financial affairs within ten days.
The Court also restrained dealings with assets, subject to a specific qualification: defendants 2 to 8 could operate their bank accounts in the normal course of business or for necessary daily expenses. This permission did not extend to defendant 1.
The interim protection was directed to continue until the next hearing. The matter was listed for November 25, 2026.
