Day 2 in Delhi HC

12 November 2020, 15:38: Day 2 in Saraf’s submissions have just started. Bar & Bench is live tweeting the hearing.

17:12: After reiterating many of the arguments already made by Saraf in internal emails, his counsel Parag Tripathi concludes, according to B&B:

To sum up, there is no power of expulsion. If there was power of expulsion, it needed to be done in a bona fide manner, which is missing in this case. Thirdly, the 180-day notice was not followed: Tripathi concludes his arguments.

18:48: After Tripathi, Promod Nair argues on behalf of Saraf. According to B&B:

Saraf, who has been running this firm, has been thrown out overnight. If clients walk away as a result, the firm will come crumbling down. Therefore there is severe urgency to restore the status quo prior to Saraf’s expulsion: Nair

Matter adjourned until 18 November, this coming Wednesday.

Delhi HC Day 1 (discounting Day 0)

Update 11 November 2020: Yesterday’s scheduled hearing (as the last item in the list) did not happen, according to the court’s order which noted:

This matter is being heard through video-conferencing. It is already 16:50 hrs.

List on November 12, 2020.

L&L Partners senior partner Mohit Saraf‘s senior counsel Parag Tripathi recounted in a one-hour hearing to the Delhi high court the by-now well-known case of his client, according to Bar & Bench‘s live tweets today.

Notably, more than in the first hearing for injunction, Saraf’s side this time returned to first principles and went through the partnership deed between Saraf and managing partner Rajiv Luthra.

In particular, Saraf’s side claimed that Luthra did not have the unilateral right (after a trial period under the deed that elapsed in 2003, at least) to unilaterally eject Saraf from the partnership.

Furthermore, under section 33 of the partnership act, the majority of partners can only expel another partner if they are excercising in good faith the powers that they have under the contract.

And, according to Bar & Bench’s Twitter feed, “Tripathi’s junior reveals that the Luthra partnership deed doesn’t have the best drafting”.

Having read the partnership deed between them, we can confirm that it’s an understatement. (our full analysis of the deed from 15 October has attempted to translate much of what the deed could mean).

According to Bar & Bench’s tweet, there is also an bizarre reference by Tripathi of an allegation: “Luthra claimed that Saraf received kickbacks from a client who was being investigated by CBI. There is no proof of this, it communicates nothing: Tripathi. This is nothing but a simple abuse. But this abuse cannot be basis for throwing me out.”

It is likely that Luthra had included this allegation in his counter that was filed yesterday though it’s the first we have heard of it.

However, we also understand that worse and similar ‘abuse’ had already flown between the parties during the Zoom townhall and some of their internal conversations.

Next hearing fixed for Tuesday, 10 November, as the last item on the list.

The court does not seem to be in a huge hurry to hear this; in its previous order, the court had fixed Monday, 9 November as the date that Luthra would present his case but Saraf’s arguments have not even concluded yet so it could be a while longer until anything crystallises.

In the meantime, for a summary of Saraf’s case (if previous reports of leaked emails have not been sufficient information), we have uploaded a copy of Saraf’s petition to read below (excluding the annexures).

There is also our story with more information on the Rs 147 crore turnover and Rs 43 crore of profits that the L&L corporate partnership generated, how this changed and was divided between the two, and how it might be affected by partner departures.

We will update this article after Tuesday or if there are any substantive developments.

The Saraf v Luthra Petition