Delhi HC Grants Interim Protection To Orange Orbit LLP in Rs. 18.6 Cr. Dispute With HostBooks Ltd.

The Delhi High Court recently granted interim protection to Orange Orbit LLP in its Rs. 18.6 crore investment dispute with HostBooks Limited in a petition under Section 9 of the Arbitration and Conciliation Act, 1996.

Justice Mini Pushkarna allowed the petition and restrained HostBooks and its founders (Respondent Nos. 2 and 3) from alienating or creating further encumbrances over its assets, business, software, intellectual property and securities pending arbitration till the next date of hearing on 7 October 2026. The Bench held:

“The respondents, whether by themselves, their directors, officers, agents, nominees, assigns or any person claiming through or under them, are restrained from selling, transferring, alienating, disposing of, parting with possession of, or creating any further encumbrance, charge, lien, security interest, pledge or third-party right over, the assets, undertaking, business, software and intellectual property of the respondent no. 1”

The dispute arises from a Share Subscription Agreement (SSA) and an Amended and Restated Shareholders' Agreement (SHA) executed on 24 November 2024, under which Orange Orbit LLP invested Rs. 18.60 crore as the first tranche of a proposed Rs. 38.60 crore investment and acquired about 11% stake in HostBooks through 74,573 Series A1 compulsorily convertible preference shares. While the SSA governed the investment structure, the SHA conferred governance and investor-protection rights.

Orange Orbit LLP triggered a special audit after concerns emerged in July 2025, which, according to its allegations, revealed PF and TDS compliance failures, denial of access to accounting systems and TRACES, and GST-related irregularities. The investor further alleged that HostBooks raised debt of up to Rs. 15 crore from Blue Ashva India LLP without obtaining prior consent mandated under the SHA.

The dispute escalated when Orange Orbit first learnt of the transaction on 26 March 2026, after Blue Ashva referred to an 8 July 2025 letter purportedly recording its consent. Orange Orbit disputed the authenticity of the letter, alleging that it had been forged and used to create encumbrances over HostBooks' assets and intellectual property.

Orange Orbit also alleged that the founders increased their remuneration without notice and suppressed related filings, thereby breaching contractual obligations under the SHA.

Seeking to protect its investment and preserve the subject matter of arbitration, Orange Orbit moved the High Court under Section 9 of the Arbitration and Conciliation Act, 1996, contending that any arbitral award would be rendered ineffective in the absence of interim protection.

The High Court accepted jurisdiction after noting that Clause 21 of the SHA and the corresponding clause in the SSA designated New Delhi as the seat and venue of arbitration.

The Bench granted five interim protections: it restrained HostBooks from creating further encumbrances over its assets and business; restrained the founders from dealing with their shareholding; directed status quo on the company's capital structure, assets and books of account; and prohibited any dealing with its intellectual property without consent.

Accordingly, the High Court also restrained HostBooks from acting upon the disputed 8 July 2025 no-objection certificate, issued notice to the respondents, and granted four weeks to file replies.

The matter is listed for further hearing on 7 October 2026.

Appearances for petitioner (Orange Orbit LLP): Advocates Bani Dikshit, Uddhav Khanna and Dhruva Vig.