[Algo Legal, Sandeep Kapoor v. Sequoia, media] Bengaluru court rules no interim stay till it hears all parties, issues notice

A Bengaluru court on Wednesday issued notice to Sequoia Capital, Twitter and a number of media outlets including Hindustan Times and Times of India in a ₹1 crore defamation suit filed against them by law firm Algo Legal and its founder Sandeep Kapoor. .Notice was issued specifically on the interim application filed by Algo seeking injunction against publication of articles in relation to the issue.City Civil and Sessions Judge MH Annayyaanavar, however, refused to grant any interim stay on publication of articles relating to Algo. The Court observed that after examining the arguments of counsel of both parties, it was of the opinion that defendants (Sequoia and media) have to be given the opportunity to file their objections before pronouncing the order in the plea by Algo for injunction..The parties impleaded in the suit included HT Media Limited (owner of Hindustan Times and other publications) Bennett Coleman (owner of Times of India, Economic Times and others), the owners of News18, journalists from these publications, and Twitter.The suit arose after the media companies, and other respondents had published news articles reporting that Sequoia Capital had cut ties with Algo Legal after Kapoor apparently threatened some of its portfolio companies..On Tuesday, the Court was witness to arguments by Senior Advocates before orders were reserved in the matter.Appearing for Sequoia, Senior Advocate Sajan Poovayya insisted that he be allowed to argue before an interim order is passed.Poovayya said that he is entitled to file his pleadings both in interim application and in plaint.He also defended the act of calling out the lawyer (Kapoor)."If there is one lawyer who is a crook, then it is in the interest of the bar that it is called out. In such an event there is no question of injunction," he contended..On the other hand, representing Algo Legal and Sandeep Kapoor, Senior Advocate Udaya Holla had pressed for an interim order."These funds come here and now making allegations. Is it their argument they will go ahead with defamatory statements...Reputation cannot be sullied. Innuendo is evident," he had submitted. He also drew comparisons between Sequoia and the East India Company..Advocate Manu Kulkarni, appearing for Twitter, submitted that an intermediary cannot be held liable for third part posts made via its platform."I am an intermediary. Can injunction be granted against me? There is a specific provision on this. Section 79 of IT which exempts me from third party information or communication," Kulkarni said.Khaitan & Co's Senior Partner Ajay Bhargava and Partner Nikhilesh Rao appeared for HT Media and E Eighteen.com Limited.For Sequoia, Poovayya was briefed by Senior Partner at AZB & Partners, Aditya Vikram Bhat.Partner at Poovayya & Co Shravanth Arya Tandra represented Twitter along with Kulkarni..In the defamation suit, Algo Legal and its founder Sandeep Kapoor have claimed that the publication of false news items resulted in the exit of three partners and several lawyers of the firm.Claiming that the news articles were maliciously motivated, laced with canards and entailed deliberate misrepresentation of facts, Kapoor stated in the plaint that he has been ridiculed and jeered in social circles as a result, and that the good opinion that people have of him has been diminished.Owing to the fiasco, Algo Legal's standing in the market has also been directly impacted, the plaintiffs have stated..Algo Legal is a law firm founded by Sequoia Capital's former general counsel Sandeep Kapoor, who as per his LinkedIn profile, worked at Sequoia for almost nine years till 2019.As per an email, Sequoia informed companies that “concerning incidents” involving the law firm Algo Legal were found in a recent investigation.Kapoor allegedly threatened some of the Sequoia portfolio companies with cases for violations of the Foreign Exchange Management Act (FEMA) and investigations by the Income Tax Department, the Enforcement Directorate (ED) and other government agencies.It was further alleged that Kapoor, while taking advantage of his earlier position as Director Legal of Sequoia, was arm-twisting these portfolio companies to make them hire his firm (Algo Legal) or related entities for all legal work.