Barely a year and a half after TPG Capital and Bain Capital jointly invested around $86 million in kids? apparel retailer Lilliput, relations have deteriorated between the partners, with promoters moving court to prevent the private equity investors from a possible exit from the company.

A person with direct knowledge of the situation told FE that the PE firms have started increasingly interfering in the company?s day-to-day affairs. ?They are creating problems for the management in the day-to-day running of the company,? the person said.

?There is some tension between Lilliput and the investors over management (issues) and transfer of share,? confirmed another source. Lilliput, he said, moved the Delhi High Court earlier this week, ?apprehending? the PE firms would sell their stake and exit. Bain?s has invested through BC India Private Investor, while TPG owns the stake through Star Market Asia.

Lilliput did not respond to an emailed questionnaire. While its founder Sanjeev Narula did not answer calls to his cellphone, Kahkashan Afrin, general manager, promised to get back to FE on time but did not respond till the time of going to the press.

Bain?s external communications agency told FE: ?The High Court in Delhi has issued an injunction based upon an ex parte application by Lilliput, forbidding Bain and TPG from discussing matters related to the company.?

?We do not admit a number of statements made in their filings in the court and will be responding in due course,? it said. The agency said that the statement is also made on behalf of TPG as well.

Lilliput is just the latest case of feuding retailers and their private equity investors. According to sources, TPG and Chennai-based Shriram Group are currently bickering over additional investment in Vishal Retail that the alliance acquired from its promoters earlier this year. Last year, Koutons Retail saw the flight of three directors from its board who were nominees of private equity funds which had invested in the company. A economic slowdown that hit India in 2008 left retailers struggling with a piling inventory and mounting debt, resulting in growing tensions between promoters and investors.

Started in 1991 as a supplier to some of the major global retailers, Lilliput forayed into direct retailing with a store in 2003. The company operates more than 250 stores in 153 cities and has presence in China and many Middle Eastern and African countries.

As the company appeared promising and there were talks of a possible public issue, TPG picked a minority stake in Lilliput for about Rs 120 crore, a week after Bain purchased an undisclosed stake in the company for Rs 270 crore.

(With inputs from Shruti Ambavat)