Saraf v Luthra: Read the written submissions, arguments, deed, case law & gossip that will decide L&L’s future

Posted on By Legal 60

The respondent’s case: Luthra’s seniors get busy

Luthra’s counsel’s arguments included that Saraf’s internal assertions that Luthra had retired from the firm were a “misrepresentation”, that Luthra had the right and cause to terminate Saraf’s partnership, as well as that Saraff had insulted Luthra, conducted himself as unbecoming of a lawyer and was therefore in material breach of the deed, and that Saraf had admitted he was rude to Luthra.

Plus, that Saraf had no case under section 9 and elsewhere for interim relief.

November 18: Abhishek Manu Singhvi disputes RKL’s retirement

Singhvi hammered home the point that Luthra did not retire several times, according to B&B’s transcript of the proceedings.

“2-3 stray sentences cannot make my retirement,” Abhishek Manu Singhvi had told the court. “The question is whether I’ve left or I’m about to leave. The court is not seeing the rightness or wrongness.

“There is no question of me retiring. He is relying on a supposed voluntary retirement by me. Luthra wasn’t handing him the firm. Assuming that in my moment of pain I said that I want to leave, can the court grant relief on such a stray sentence?”

Singhvi also said that section 9 of the Arbitration Act for interim relief was not suitable in this case, as it was an “interpretation exercise” and the position was not “crystal clear”.

Singhvi also claimed that Luthra had powers of final decisions and veto powers under the deed.

“Only Luthra has the power to appraise the performance of Saraf. Spirit of the deed is that there is a dominant person.. there are special rights: I can either withdraw myself or retire. Saraf cannot evict, terminate, expel Luthra,” according to B&B’s tweets.

In what would not be the first time, Singhvi also appeared to have implicitly complimented Legally India about its speed and depth of coverage of the dispute:

[Talking] to the press.. everything is published by that portal before the ink is dry

Two days later (and in the written submissions) he and Luthra’s side would elaborate further on this.

November 19, Neeraj Kishan Kaul takes over

For the most part, Kaul reiterated Singhvi’s points, claiming that Luthra had the power under the deed to terminate, also raising the following complaints:

  • Saraf had unilaterally inducted new partners and given them equity shraes, which was “dishonest and contrary to” the deed,
  • Saraf had disclosed client details, WhatsApp conversations of partners and financial details,
  • Saraf had been causing “mayhem” and been “backstabbing” his mentor, and now wanted an order to “return to the firm and cause mayhem, as if he hasn’t created enough mayhem already”,
  • and some other barbs directed at Saraf: “He himself grew on the platform that Luthra set for him. Don’t give this impression that you are the karta-darta of the firm”.

Kaul also discussed clause 8 of the deed about termination and dissolution, claiming that Luthra did not have to wait 90 days to terminate Saraf and could in fact do so unilaterally.

Kaul said that Saraf should either take the goodwill payment (under the deed) and not compete, or to start his own practice without a goodwill payment.

November 20: Singhvi continues, claims Saraf has ‘special affinity’ for LI

Singhvi was back in the saddle on 20 November.

In substance, Singhvi argued that Saraf and Luthra’s was never an “equal arrangement”.

And Singhvi also name checked Legally India, claiming that “Saraf has a special affinity for the editor of Legally India” and “lamenting that information that would hurt the firm was published on the website… Accuses Saraf of washing dirty linen in public. Can a fiduciary relationship exist after this happens?”

1 December: Another day for Kaul

Kaul claimed that Saraf had been asking for Luthra to “buy me off” and that Saraf had “falsely spread rumours” about Luthra’s exit, which was Saraf’s own “unilateral and dishonest interpretation” of Luthra’s WhatsApp messages.

“Mr Luthra has explained that there is a difference between withdrawing, dissolving and terminating the partnership. The power to terminate the partnership of a partner is with Luthra,” reiterated Kaul.

Kaul also noted that many of Luthra’s emails had made it clear that Luthra would not be retiring.

7 December: Parag Tripathi in rejoinder for Saraf

According to Bar & Bench’s Twitter thread, Tripathi said that this was at heart a dispute between partners, of whom one had expelled the other and whether he had the power to do so. Saraf had been compelled to go to court because Luthra “has kept bouncers outside to prevent me from coming to office. I could have done it on 12/10/2020 and thrown him out of the list of partners. But I didn’t and he did.”

If I had done what he did to me, the same argument would have happened? Is this the law that in a partnership dispute, whoever pulls the trigger first gets away? You expel a partner and the partner has no right? Because there can’t be specific performance? Where is this coming from?

Tripathi claimed the deed did not allow Luthra to do whatever he wanted and Saraf was not in a servant relationship to Luthra under the deed.

“Please construe the deed in strictest sense.. even on a regular reading there is nothing (on power to expel),” claimed Tripathi.

9 December: Arvind Nigam for Saraf

The mammoth B&B Twitter thread of the final day of hearings has the full details.

In summary, Arvind Nigam argued that Saraf should continue being a partner, until the partnership was fully dissolved.

“Conduct is irrelevant. I may be the worst partner. If the firm does to dissolution, it won’t be that I won’t get a share,” said Nigam. “The firm court could have been dissolved unanimously. He has grievance against me. What is his remedy? Please see section 44 of Partnership Act.”

Nigam also said that if Saraf was indeed terminated, how could Luthra remain a partner in a “partnership of one”. “They can’t say the firm is surviving with one [partner].”

Then Nigam added: “What info have I leaked to Legally India? Nothing. Just off the cuff. The firm stopped providing releases to Legally India on my instructions. I said don’t conduct townhall meetings.”

9 December: Promod Nair continues for Saraf

Naid kept it brief and noted that all correspondences between partners had happened on WhatsApp, including Luthra’s notice to Saraf, which is why those were shared in the pleadings. “The best firms are the ones which attract the best lawyers. How to retain them is the core of the issue,” he added. “Till 2014-2015, the firm had a golden run. Then it had problems retaining the best and brightest lawyers.”

The written submissions filed on 14 December 2020

Saraf’s written submissions

We have obtained a copy of documentcloud the 105-page written submissions to the court made after the end of oral hearings on 14 December by Saraf’s arguing senior counsel Parag Tripathi and Arvind Nigam and counsel Promod Nair.

You can read their written submissions in full below, from which we have compiled the most pertinent and interesting highlights below, each linking to the annotated PDF.

Parag Tripathi’s written submissions for MS

Arvind Nigam’s written submissions for MS

Promod Nair’s submissions for MS

Written submissions for Mohit Saraf by Parag Tripathi, Arvind Nigam, Promod Nair

Rajiv Luthra’s counsel written submissions

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