Thread by @barandbench

Delhi High Court begins 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

Senior Advocate Arvind Nigam begins rejoinder submissions on behalf of Mohit Saraf.

So far as their main defence that this relief can't be granted by virtue of bar under Specific Relief Act.. it is our endeavour to show that there is no bar: Nigam

Nigam reads section 4 of Partnership Act.

That's the principle of agency : Nigam

My right as a partner will bind the other partners. It is the principle of agency that binds the partners. By the act of one person seeking to terminate the partnership, the deed will get resolved. Till the dissolution is complete, I continue to be a partner : Nigam

Your act is illegal. You cannot throw me out and run away with the partnership: Nigam

I'm not divested of everything. If you throw me out, if the court sees any book on partnership, the remedy of any partner is restitution and not damages : Nigam

Position is that I am entitled to seek a stay on the illegal act of termination of my partnership. I have rights even in the assets of the firm : Nigam

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 : Nigam

My status as a partner will continue till partnership is dissolved: Nigam

Nigam reads section 4 partnership act.

It was contended that L&L is nothing but Luthra and Luthra. Originally Luthra & Luthra was a sole proprietorship of Rajiv Luthra. They say this firm is referred as L&L. Between the partners, they constituted an LLP later. It was a change -- Lex and Legal: Nigam

Being an asset of the firm..section 38 of SRA permits injunction to prevent breach of an obligation: Nigam

How do you exclude me from the assets of the firm: Nigam

Nigam reads a judgement.

They seek to exclude me from my own property.. they can't assume that there is dissolution. It could equally belonged to me: Nigam

Nigam argues that the court must prevent the irreparable injury to Saraf in the interest of justice.

Nigam reads a judgement on grant of mandatory injunction.

Illegal act is throwing me out, taking away of the assets of the firm.. : Nigam

Nigam reads Section 41 SRA.

My status, relationship arising out of contract in the nature of Partnership can't be taken away by Luthra .. that's an act that can be remedied: Nigam

I will continue to be a Partner till dissolution. There can't be a firm with one partner: Nigam

According to them also the firm has not dissolved. Then what is my status? I have to rights according to them. That's complete fallacy. My rights are governed by partnership act. SRA is not barring my remedy: Nigam

My remedy is under partnership act : Nigam

SRA doesn't bar my relief. It is an enabling provision. In the old SRA, there were illustration given (on partnerships) : Nigam

My relief is to declare that I continue to be a partner. It has nothing to do with specific performance of any clause of a contract. It is nobody's case that firm has dissolved: Nigam

If firm dissolves, he can't run the firm either: Nigam

SRA is not a bar on me coming to court to seek relief which is to be given to me under Partnership Act: Nigam

Argument on SRA being a bar was not accepted in Suresh Kumar Sanghi's judgement: Nigam

Nigam reads the judgment.

The illegal act of a partner is liable to be interdicted where necessary: Nigam

The firm court have been dissolved unanimously. He has grievance against me. What is his remedy. Please see section 44 of Partnership Act: Nigam

Could have been*

His grounds in Oct 13 letters are in the section. He can't terminate and highjack the assets of the firm. His notice of Jan 6 was founded on the consent of both partners to dissolve the firm. I said your understanding was wrong : Nigam

The defendant wanted out. For him to go out, there is a financial commitment. He wanted a golden handshake: Nigam

Coupled with the events that happened .. he made a zoom call to entire firm and dirty linen was washed in public.. his wrongdoing came to fore. He took action on Oct 4 saying I'm going to induct two partners: Nigam

Nigam reads the Oct 4 letter.

Luthra wants to share his equity: Nigam continues to read

I never consented to induction of two people. He wants to share his equity: Nigam

Nigam reads section 31 Partnership Act.

He didn't have my consent. Without my consent, they cannot be. Partnership is out of principle of agency: Nigam

There could be no partnership of four. It was a still born decision: Nigam

Nigam reads section 29.

They may take whatever is due from Luthra. But they don't become partners with me and interfere in the management of the firm: Nigam

Nigam reads a judgment.

The judgement is on sub partnerships.

How are these two alleged to be partners of the main firm. They don't have my consent. On Oct 4 I was a partner: Nigam

The essential condition in the deed is section 31. It requires my consent qua those strangers: Nigam

Prior to their letter of Oct 13, I issued him a notice on his desire to go out. His desire was initially in a notice of Jan 6. It purports to be a notice to consensual dissolution of the firm. On the same day I say there is no unanimity : Nigam

He extends the notice. It only shows his desire to leave the firm. He wants to dissolve because he wants to go out : Nigam

He says dissolution and not my termination: Nigam

These are his unilateral acts to dissolve the firm. Between August and Oct 31.. he sent a message to corporate partner on his proposal. He says he will not participate in Partners meeting. It is followed by a zoom call where dirty linen is washed : Nigam

Much is said about me being a bad boy.. this relationship is different. I am an equally founding partner of the firm. The semblance of junior and senior was only for the first few years : Nigam

Nigam lists Saraf's credentials.

He took the firm to the heights that it reached. The defendant only wanted the golden handshake: Nigam

I wrote to him saying it reflects your desire to leave.. this deed could be dissolved on certain conditions. Your request constituted your desire to withdraw and I accept. But I don't put bouncers: Nigam

He has not moved the court saying my letter accepting his withdrawal was wrong : Nigam

I'm not in anyway upsetting the apple cart. I'm reading his continuous stream of letters to me as his intent to depart. We are willing to pay: Nigam

We are not barring him because there ar consequences: Nigam

Nigam reads section 47.

There are ongoing matters in working and firm will be liable. If a client sues a the firm, and money is to be paid, it will go out of my share as well. He issued a public notice saying I'm expelled: Nigam

In spite of their illegal act, I continue to be a partner: Nigam

He has not questioned my Oct 12 letter to say that his letters were misread.. he accepted that position. He has set up a new case here: Nigam

I'm not saying that the court should pronounce on the legality of my letter. I'm entitled to seek relief from his interference: Nigam

For irregular expulsion, remedy is restitution: Nigam

Nigam refers to a Madras High Court judgement.

Nigam continues to read the judgement.

Nigam asserts that partners don't have exclusive rights over property till there is dissolution of the firm.

Nigam submits that the technical infrastructure of L&L is not the private property of Luthra.

There cannot be a partnership of one. They can't say the firm js surviving with one: Nigam.

Nigam reads a Supreme Court judgement.

Luthra can't say that this is mine entirely. This is not the position in partnership law. Partners have a right I'll dissolution. It is not their case that firm was dissolved. How do you exclude me : Nigam

If you can't work with me, dissolution is the answer: Nigam

I have every right to be there. What secrets have I given away? : Nigam

Partnership deed in not a secret. Correspondence between you and me.. I have filed it before court. Nobody can claim any privilege from the court : Nigam

They say the Petition is bad for misjoinder and non joinder. The width of the relief is in my rejoinder. The two gentlemen who were inducted by Luthra are not partners with me/firm and have no right to be here : Nigam

They are not necessary parties here. They are not parties to the arbitration agreement: Nigam

Non joinder of 23 people I signed a partnership agreement with.. they have no privity of contract. Luthra has no relationship with him. They are neither proper nor necessary: Nigam

Much was said that I jeopardised the firm by my conduct, that I leaked information (to Legally India). That document was also not placed on record. It was entirely speculative : Nigam

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 : Nigam

Nigam reads a communication to Luthra from Saraf on the issue of not having the townhall meeting online.

Yet I'm the black sheep of the firm : Nigam

Nigam reads a communication from Luthra.

All kind of dirty linen was washed. And who was the saying don't do it (townhall meeting) : Nigam

WhatsApp communication.. you can serve another person on WhatsApp. As long as it is relevant, it is admissible: Nigam

Is it their case that under Evidence Act, this material can't be seen? That's not their case. It admissible material: Nigam

It's not a master servent relationship, whichever way the court looks at it : Nigam

I can't be my own employer and employee: Nigam

Nigam concludes.

Adv Promod Nair begins.

There are only 3-4 points: Nair

What is relevant to remember is that all correspondences between the partners were on WhatsApp for years. In fact that Luthra's own notice was on WhatsApp: Nair

There has bene an attempt to create an impressive that the dispute is about loyalty: Nair

The argument was that Mr Saraf was trying to take over the firm and was being disloyal..this narrative is completely false. The dispute was to professionalise the firm. It lead to the event of Oct 13: Nair

Best firms are the ones which attract the best lawyers. How to retain them is the core of the issue. Till 2014-2015, the firm had a golden run. Then it had problems retaining the best and brightest lawyers: Nair

The best of the lawyers had no say in the firm or its profits.. there were discussions to broad-base the equity of the firm. There were senior level departures in late 2019. The entire capital markets team departed : Nair

To take corrective measures, there was friction between Luthra and Saraf: Nair

We were looking at a situation where over 70 senior employees out of 300 were leaving : Nair as he explains that Luthra was looking issues of the firm closing down within a year

Looking at*

Nair reads the correspondence between Luthra and Saraf on the issue.

This battle was not between the parties here. It was from the younger partners who were working for the firm : Nair

Nair continues to read.

Focus was equity dilution and reward to younger partners : Nair

Nair stresses that it was not an ego fight and Saraf was pressing for a fair and transparent process of institution building and the ability to attract and retain bright minds.

Nair reads a communication from the youngest partner of the firm on finding "future stability".

Nair reads another similar communication.

During the last 12 months, there were several communication .. younger partners wanted stake in the equity: Nair as he says he would show certain decisions.

The matter is being rearguard. We are all very keen to close it today: Senior Adv Abhishek Manu Singhvi for Luthra

Yes, I'm also blocking my board: Court

Whatever you want to say, say it in your written submissions: Court

Nair says he will wrap up.

On expulsion, if it can't be supported, I have shown a prima facie case in section 9 proceedings: Nair

Don't repeat anything. Argue what they've not argued : Court

Court and Tribunal can't rewrite the contract: Nair

We've not said that we don't have the power to expel : Adv Haripriya for Luthra

Nair suppliments certain points made by Nigam and Senior Adv Parag Tripathi.

Reinstatement will not create chaos. Two partners and 10 associates have left the firm since the case was opened. I have pursuaded the clients to stay: Nair

That's all Mr Nair: Court

I'll take actual 10 mins and not lawyer's ten mins: Singhvi

You say delete parties and prayers when you wre pinned down. You moved the goal post : Singhvi

Moving goalposts to confuse everyone is not allowed : Singhvi

They are saying they want two bite at the cherry. You argue here and there also. They are saying Luthra is bad for the firm and should be out in the petiton : Luthra

This presumption is the basis of the petition. Contract is not equal. Specific performance can't be granted in teb teeth of the contract. Don't join the unjoinable: Singhvi

The teeth*

The issue of notice has come for the first time in the rejoinder. It is not in the petiton. De facto, de jure notice was given is our case : Singhvi

There is no need to rebut the case laws. Their case laws are on express vs implied power debate: Singhvi

We may have to close it. I have a meeting : Court

I have two more points but I will put it in written submissions: Singhvi

Give us one week : Adv Haripriya

Maximum Monday evening: Court

Hearing adjourned.

Order reserved.