Thread by @barandbench

Delhi High Court to shortly begin hearing plea by Mohit Saraf, Senior Partner, L&L against the firm's Founder Partner, Rajiv Luthra.

Matter is before Justice V Kameswar Rao.

#MohitSaraf #RajivLuthra

The main contention in Saraf's plea is that he could not be summarily thrown out of L&L Partners using strong-arm tactics.

#MohitSaraf #RajivLuthra

Read more:
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Rajiv Luthra has issued a public notice in the newspapers, that Mohit Saraf is no longer a Partner with L & L Partners with effect from October 13, 2020.

Hearing begins.

#MohitSaraf #RajivLuthra

Senior Adv Arvind Nigam appears for Mohit Saraf.

Senior Adv NK Kaul appears for Luthra.

It's really not a matter which should have come to court: Nigam

I'm also for the Respondent: Senior Adv Abhishek Manu Singhvi.

The dispute arises from the partnership agreement: Nigam

I have an objection. He (Saraf) has made persons who are not party to the arbitration agreement as parties. I'll address it: Singhvi.

It appears that the first doc.. the earlier volumes are not here: Court

Then the Court doens't have the first two volumes: Nigam

Court may pass it over: Nigam

We can have it on Monday: Singhvi.

We'll pass it over. You also pursue : Court.

Matter to be taken up in some time.

Hearing resumes.

We have the files now: Court

March 31,1999 is the deed of Partnership: Nigam

Saraf and Luthra are the parties.. it was subsequently amended to 66-33 in 2004: Nigam

Nigam reads the deed of Partnership of then Luthra & Luthra.

Remuneration is at page 20 ...: Nigam

Distribution of profits will be distributed every quarter...: Nigam continues to read the deed.

Nigam reads clauses on opening of new offices.

Upon any of the party leaving the firm.., and not due to death, a certain value of the goodwill shall accrue to the party..: Nigam continues to read.

In case of misconduct, the person shall be entitled to 50% of the value of goodwill.. : Nigam

Nigam reads various conditions of payment of goodwill upon a person leaving the partnership.n

If Luthra goes and retain the name, he would need to exercise the option within 12 years of effective date (1.04.1999)..: Nigam

In case he goes in the first four years, he was to compensate Saraf.. this has not happened.. 12 years also went by: Nigam

After 12 years, Luthra has no power to exercise the option : Nigam

There is a manner of calculation of goodwill in the partnership agreement: Nigam

Luthra may leave the firm for two years.. the firm Luthra & Luthra will be left behind but he may practice: Nigam

All material decisions shall be taken by vote of majority.. after 2010, the right of Luthra to render final and binding decision are restricted to the following conditions...: Nigam continues to read.

Any decision of merger etc shall require approval of both : Nigam

All issues agreed between the parties cannot be opened by Luthra by use of veto power : Nigam

He cannot give himself any disproportionate benefit: Nigam

Nigam reads the clause of induction of new partners.

This is what the genesis of the dispute is: Nigam

If the two don't agree to induction of a partner, Luthra may give away part of his own profit to the new partner. However this new partner will have no rights: Nigam

There was no unanimity here : Nigam.

Court breaks for lunch.

Hearing resumes.

I was at the aspect of retirement: Nigam continues.

Nigam reads the relevant clauses from the deed.

Any party can any time withdraw..: Nigam

There is clause of termination/dissolution..: Nigam

Does this deed still hold good? : Court

It is our case that the Defendant withdrew from the firm and gave notice to terminate ..: Nigam

He gave a notice on 6 Jan 2020.. on 4 April, he extended the notice period and further on 30 April, further extended..lastly a further extension was given on 30 Aug 2020 till Oct end: Nigam

During this period of notice, on Oct 12, we accepted his withdrawal: Nigam

We constitute the Partnership..: Nigam

Can we have the initial notice on 6 Jan?: Court

Yes: Nigam

Nigam reads the notice of Jan 6.

Nigam refers to another document wherein Luthra says "let me go".

Nigam reads Saraf's response to the communication.

Luthra has not been an active partner for the last... : Nigam

Justice Rao drops out of the video conference link due to a technical problem.

Justice Rao joins back.

I was on his note to me saying let me go. I response.. I continued to : Nigam

Court faces another connectivity issue.

Proceedings come a halt.

As of now, the meetings has 140 participants.

Justice Rao joins again.

Nigam continues to make his submissions.

There is further intimation form Luthra.. : Nigam reads a communication from Luthra.

In the communication, Luthra seeks to know the amount that would be paid to him.

The communications go on between the parties: Nigam

My proposal was to induct new partners.. EC is a committee that runs the firm..: Nigam

Nigam reads another communication on deferring automatic dissolution.

I never wanted dissolution and termination of the firm. I wanted to induct new partners. Luthra has practically been a sleeping partner this year: Nigam

Luthra is extending his notice for 60 days and then till Oct 31 : Nigam

Where is the Oct 12 communication?: Court

I said I accept your withdrawal and say there have been material breaches of the deed..I call for everyone to extend all cooperation to him : Nigam

I said I had no intention of depriving him from any amount legally due to him : Nigam

It was always been your intent to terminate the association with the firm: Nigam reads one of Saraf's communications.

You have remained adamant on safeguarding your pecuniary benefit.. : Nigam

Your sole motivation was not the benefit of the firm.. your announcement of giving away your equity share was nothing but a facade: Nigam continues to read.

There is no consent on dissolution of firm.. not only has he terminated. He was removed my name and removed my access to my email, papers. Entire IT infrastructure is blocked : Nigam

I accepted his resignation but I did not block his access. A partner remains a partner till accounts are settled. He has barred me from the assets for the firm which he cannot do. He was published it in the newspaper: Nigam

I've done nothing of this client.. he can't do the contrary to me: Nigam

My prayer is that he cannot dissolve the firm: Nigam

I have come to court on his action of 13 Oct by which he seeks to terminate the firm : Nigam

Irreparable damage would be caused to all the lawyers in the firm and the clients. The balance of convenience is in my favour : Nigam

I'm saying that Luthra be restrained from interfering in the functioning of the firm: Nigam

He should not deprive me of the assets : Nigam

The other Respondents are only to give effect to the orders of the court : Nigam

Prayers are against his act of seeking to exclude me from the firm : Nigam

Saraf seeks that his access to the firm and its infrastructure be restored and bouncers deployed at the office be removed.

Ultimately the firm must continue: Nigam

Nigam reads the email written by Luthra regrading termination of Saraf's partnership.

You got to know about it through your client?: Court

Yes: Nigam

I'm sorry that this matter has come to court. It should have been mediated and settled .. I'm willing to go to a time-bound scheduled.. I'm willing for meditation subject to status quo ante: Nigam

There has been cherry picking of lines. The man who created the institution, started in 90s. Impression is being given that suddenly in Jan he decided to leave: Senior Adv Kaul begins for Luthra

After 10 months, in a bizzare interpretation, a man who founded the institution is permitted to withdraw now : Kaul

Over 90% of the partners are with him.. he diluted his share to 66%.. naturally a person is taken aback when some is promoted: Kaul

WhatsApp messages are coming out with conversation with cleints and partners: Kaul

Partners are bound to take the firm as per common goals.. confidential information is leaked. His case in the Petition is we can't work together now: Kaul

The way out is that you go out. We will give what he is entitled to : Kaul

He inducts more people and leaks confidential information : Kaul

Kaul reads out clauses of the Partnership deep.

Luthra was earlier 75%..: Kaul reads relevant clauses on username of the firm.

Consciously, whether it was the name, termination etc.. such powers were kept with Luthra: Kaul

Now they say that suddenly you are out .. there has been a cherry picking by them: Kaul

Kaul reads the clauses on persons leaving the firm.

The deed is replete with clauses which give power to Mr Luthra and the person who has to leave is Mr Saraf: Kaul

Kaul reads clauses on decision making.

In the event of disagreement, the decision of Luthra was final.. : Kaul continues to reads.

Termination, performance review were in the domain of Luthra.

..the decision of Luthra in case of termination was final and binding on all parties: Kaul

Kaul reads Clauses on induction of new partners.

The only person who has the right to induct new partners in case of disagreement is Luthra and not Saraf. The force behind the entire institution is Rajiv Luthra: Kaul

Dissolution is of a partnership. Termination is when a partner decides to go.. : Kaul

10th I inducted two partners which I'm empowered to do : Kaul

I was interested in Saraf leaving the firm and not destroying the firm that I created : Kaul

Only Luthra is entitled to dissolve or terminate.. : Kaul

This is not a matter of restoration of status quo ante.. I need to put in a reply: Kaul

Kaul reads the clause of termination and dissolution of firm.

This clause talks about termination and dissolution. Termination cannot be of the firm but a partner. The deed qua him is terminated: Kaul

The entire exercise that Luthra carried out from Jan was the attempt to terminate Mr Saraf's partnership: Kaul

What about the notice of 90 days: Court

I'll come to it. The deed gives the sole and exclusive right to Luthra to dissolve and terminate: Kaul

The emphasis is on "resolve".. everything was in the direction of resolution before termination. If Luthra was interested in termination, he would have done it right away. He has always taken people along with him. He has mentored three generations of lawyers: Kaul

Kaul reads the clause on material breach.

Mr Saraf's conduct was unbecoming of a lawyer. He leaked WhatsApp messages.. which firm can run.. it's your own case that the firm can't work: Kaul

What option do I have today in view of the letters that receive.. can I let you ruin the partnership..the remedy is damages in such case. He cannot bring the Partnership to its knees: Kaul

The deed uses or. You either become unbecoming of a lawyer or stop being a lawyer in view of the law of land: Kaul explains

Saral made selective appointments. He had no power to induct new partners : Kaul

The entire functioning of the firm comes to a standstill. The firm has 100s of cases... I'm willing for meditation but not with status quo ante: Kaul

Kaul reads clause on service of notice.

The only right that Mr Saraf has is the clearing of his accounts.. before termination of Mr Saraf, two more partners were inducted: Kaul

So Mr Luthra can go only on retirement? Is there any other clause?: Court

Yes..there cannot be any other, to the best of my knowledge: Kaul

It can be withdrawal or retirement: Adv Haripriya Padmanabhan.

Any party at any time can withdraw from the firm: Kaul

Kaul reads clause on share of exiting parties.

There is no remotest indication Mr Luthra retiring or withdrawing.. I will come to the WhatsApp message of Jan : Kaul

Saraf chose to give an interpretation which was contrary to the partnership deed : Kaul

Out you go is the basis of his case: Kaul

Kaul reads the message written by Luthra to Saraf in January.

The letter is about hurt.. hurt of a person who mentored you. It doesn't mean that he's moving out: Kaul

Proceedings come to a halt after a participant can br heard speaking to someone else.

These kinds of lines (let me go) are being read out of context. There was a series of communication.. I'll have to reply..please give the shortest possible date: Kaul

Kaul reads another communication by Luthra clarifying that he did not intend to withdraw from the firm.

Kaul reads another communication.
They are picking.. these are ongoing conversation. These have to seen holistically.. here is a man who is hurt: Kaul

Do these WhatsApp messages lead to a prima facie opinion at sec 9 Arbitration stage?: Kaul

Please put the sequence of event in place.. there are often problems when two people work. Jan 6 it started on termination and there are correspondences: Kaul

There is a seven hour meeting in Oct..he inducted two new partners.. can interim orders be passed on the basis of WhatsApp messages that are cherry picked : Kaul

Kaul reads Luthra's communication on termination of partnership.

All that I'm saying is.. We can't remove the context. He created an institution that would last beyond him. You say many things during a conversation.. Saraf's rights are inferior to that Mr Luthra: Kaul

WhatsApp message and confidential information is leaked.. what does one do when a person is on the course to destruct a partnership: Kaul

When Saraf wants Luthra to go, he says 90 days are over from Jan..: Kaul

Kaul reads the clause on dissolution and termination.

It is not a partnership at will and only Luthra has the right to terminate or withdraw: Kaul

Kaul reads that clause provides for amicable resolution.

Partner should act to the benefit of the firm.. you ask the founding partner to go and leak WhatsApp messages..action has to be taken: Kaul

Kaul reads the pleadings.

If this party (Saraf) was to leave, his only right is over what is due to him. We have no problem, the cheque is ready : Kaul

What is the interpretation of the deed, whether I expressed my desire to leave .. these things can't be decided on WhatsApp messages: Kaul

Next is the point of maintainability: Kaul

We have three firms..each has an independent Arbitration clause. There are different partners in different firms..Saraf wants overarching imaginary relief. He has made the employees a party: Kaul

You can't under garb of Delhi corporate office, claim relief qua Mumbai and litigation firm: Kaul

We have no issue with mediation but not with status quo ante: Kaul

It's a fact that they can't work together. We can't have a partner who is trying to destruct the firm..: Kaul

I have to inform the world and my clients.. what option did I have. Overwhelming numbers of partners across the firms are with Luthra: Kaul

What kind of mediation process are you looking for: Court

It's very well for them to say I'm not going out: Nigam as he reads a communication by Luthra on payment of dues to him after moving out.

The record shows Luthra's intention to take the golden handshake: Nigam

He wants to pickup a line here and there. You can't selectively pick up lines.. I've not filed a reply in this matter: Kaul

I leave it to the Court to decide if it's a convulated reading : Nigam

You people should sit together and work it out: Court

Nobody can object to the spirit of working it out.. : Singhvi

Don't precipitate the matter..give me my documents: Nigam

It is far too gone.. court can't give directions in such situations. It's very unfortunate: Singhvi

He has mixed up three corporate deeds, made employees as parties: Singhvi

Three partnership are there.. not all are deeds at will. Partners are different: Singhvi

Why do you have this name L&L and Luthra & Luthra? Why was it a sole proprietorship? What was your position when you joined?: Singhvi

@DrAMSinghvi

Deed gives powers in very crucial matters to Luthra.. : Singhvi

For nine months you have been doing things worse.. in such matters fiduciary duties are paramount but what have you done..: Singhvi

You have circulated client lists, written to partners etc saying Luthra should go out.. is this the way to expect reconciliation?: Singhvi

That I have retired is a complete red herring: Singhvi

Luthra is saying again and again how can you chuck me out.. his whole petiton is to the contrary: Singhvi

He has made allegations against my integrity and shared private WhatsApp chats : Singhvi

Mr Luthra was in talks for over two weeks .. how do you go to office or work from home in such conditions: Singhvi

We are strongly opposing any order : Singhvi

We are paying Rs 15 crores without being liable to pay: Singhvi

Kaul reads a communication from Saraf.

I'm sure Mr Saraf has his grievance..such statements (on leaving) were made from both sides: Kaul

If you want to sit before a mediator then let me know: Court

Nigam says termination is only on unanimity.

The first time they allege material breach is Oct 13. Five letters have been sent. None of them refer to material breach: Nigam

They say 90% is with them. I say majority is with me ..you have been a sleeping partner: Nigam

The IT infrastructure here is common. Because if that access is blocked. Till my accounts are settled, you can't throw me out. You may not like my face but can't deal with me in this manner and exclude me: Nigam

I did not bar him, why is he barring me: Nigam

I'm not excluding him.. because he had access he barred me. Kindly see his email to me: Nigam

Somebody has to settle the accounts. Someone has to decide who has left : Nigam

If you want to go for meditation, say, otherwise how long will you take to file a reply: Court

I've sought instructions, mediation is yes , yes and yes: Singhvi

Nigam suggests the nam es of Justice Badar Durez Ahmed and Mr Panchu. I don't mind Mr Salve and Mr Nayar.. : Nigam

Luthra agrees to appoinment of Mr Sriram Panchu.

Nigam seeks that no precipitate action be taken.

There can't be a mediation under threat: Singhvi

Go with an open mind: Court

Allow me access to my own email: Nigam

What is the problem with that: Court

He is writing letters about client confidentiality .. it's jungle raj.. he can wait till Wednesday: Singhvi

We want access to our own emails: Senior Adv Dayan Krishnan for Saraf.

You also don't access his email: Court

There is no allegation that we are accessing his email. These are professional email: Kaul

I'm a partner. You can't exclude me. I should have access to my own papers: Nigam

We'll put it for mediation..if it doesn't work out, come back. I'll decide the Petition: Court

Let's continue the position: Court

Time may be given to us to file reply : Kaul

The moment I give you time to file a reply, you will not go with an open mind : Court

We will have it here and then proceed: Court

Court records the order.

Matter is sent to mediation.

Only the parties shall appear before Mr Panchu after calling him on his mobile number : Court

Mediation to take place tomorrow or day after, as per his convience.

Time shall be fixed by the parties and Mr Panchu: Court

Let them not delete or access my email: Nigam

I'm not saying anything but don't access his official email: Court

Counsel may send a copy of the order to Mr Panchu: Court

Court asks Senior Adv AS Chandiok to share Mr Panchu's contact number.

Court may ask him to fix his fee: Chandiok

Yes, to be shared equally: Court

Is Mr Panchu is in Delhi? : Court

No, he's usually in Chennai: Singhvi

The mediation will happen virtually: Counsel add.

Court adjourns hearing till Tuesday, October 20.

Mohit Saraf v. Rajiv Luthra reaches the Delhi High Court [LIVE UPDATES]

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[Breaking] Delhi High Court sends Rajiv Luthra v. Mohit Saraf to mediation before Sriram Panchu

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