On 9 December 2020, the Delhi high court reserved its judgment in the saga of the acrimonious split between the co-founders of L&L Partners, Rajiv Luthra (often referred to as RKL) and Mohit Saraf (referred to as MS in court filings).

The case had been listed for hearing on up to 16 separate days and had seen oral arguments on at least ten days by 14 December, when both sides made nearly 200 pages of further and final written submissions that we have published in full below.

The judgment may be out in a few weeks or even months, though whichever way you look at it, Justice V Kameswar Rao has a decidedly tricky job here.

As promised, now that the dust is settling, here’s the recap of the entire season of court drama.

Required reading

The hearings had started in earnest again on 11 November 2020, after court-ordered mediation between the two had unsurprisingly proved unproductive.

Practically, the delay would be working in Luthra’s favour, of course. Although Saraf was credited in a deal report released by the firm on 11 December 2020, he de facto does not have access to the office, email or other office infrastructure, and public statements have gone out from Luthra to clients to deal with Saraf at their own risk.

As such, every day of extra arguments is another day that Saraf can’t return to the L&L partnership or alternatively, another day that he can’t start up his own firm with any L&L loyalists who might join.

Bar & Bench has been reporting on the proceedings live on Twitter and we will be quoting and relying on their reports in the summaries below.

Very broadly, in terms of the factual arguments, what has played out in court has been very similar to what had played out in public to date: notably wrangling about who had (and had not) the right to terminate whom under the (rather terribly-drafted) partnership deed between Luthra and Saraf from 1999, as amended in 2003 and 2004.

It is worth skimming the deeds here, including our annotations of the main sections relevant to dispute, in order to make more sense of some of the arguments by each side.

Suffice it to say, both sides have disagreed deeply about how to interpret the document.

Then there was also much ado about the Partnership Act, section 9 of the Arbitration Act (and whether the court could grant injunctive relief), and the Specific Relief Act, as well as more case law than you could shake a stick at.

Plus Legally India made several cameo appearances.

[documentcloud https://www.documentcloud.org/documents/20433515-luthra-saraf-partnership-deeds-as-amended The 1999 Luthra Saraf partnership deed as amended in 2003 and 2004]### 11 & 12 November: Saraf’s side makes case

On 11 and 12 November (as we had reported live), Saraf’s lawyers had reiterated his fundamental case that Luthra had no right to terminate him under the deed or in law.

(Remember, after Saraf had sent an internal email around claiming Luthra had voluntarily-cum-effectively resigned from the partnership, Luthra had responded in turn by locking Saraf out of his firm email account, posting armed guards outside the office and alerting clients that Saraf was no longer with the firm).

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

• No ‘master-servant’ relationship in a partnership (pg 11)
• Partner can only be expelled by express provision in deed and in good faith (pg 12)
• Fact that RKL was ‘dominant partner’ not relevant to any expulsion powers (pg 14)
• Judgment cited by RKL has different facts, modified by SC, contrary to later HC case (pg 15)
• Either RKL has retired and MS constituted new partnership (pg 18)
• Or RKL has not retired but MS is entitled to continue to function as a partner (pg 18)
• If MS was validly expelled, partnership would cease to exist & MS would have right to continue in firm until dissolution (pg 19)
• RKL does not have right to unilaterally induct new partners (pg 19)
• Induction of new partners by RKL was not discussed with MS (pg 20)
• If expulsion of MS were effective, firm would stand dissolved, contrary to current status (pg 21)
• Any new partners inducted by RKL would only function as assignment of RKL’s economic interest (pg 21)
• Termination rights by RKL under deed limited and not expulsion (pg 22)
• RKL does not have unilateral right to oust other partner under deed or Act (pg 23)
• Situation under deed was envisaged to change after 10 years, with fewer powers to RKL (pg 25)
• RKL termination rights would mean the right to dissolve the firm, not oust MS (pg 26)
• MS provides evidence that RKL was seeking to dissolve firm, not oust MS (pg 28)
• Since MS did not agree to dissolution, only alternative was for RKL to have withdrawn from firm (pg 29)
• RKL had never alleged material breach to terminate (pg 30)
• Allegations of MS’ material breach are vague and without evidence (pg 30)
• RKL did not respond regarding MS allegations of RKL misconduct (pg 31)
• Alleged ‘leaking of confidential info’, induction of new partners could not have been reason for MS’ termination (pg 32)
• Termination under deed required several notices & attempts to resolve, which was not followed by RKL (pg 33)
• RKL’s termination notice does not specify any material breach by MS (pg 34)
• Case law: Expulsion notices to be strictly constructed and imply duty of good faith (pg 36)
• Any purported termination rights under deed are rights to terminate the deed, not MS (pg 37)
• Only remedy to RKL was dissolution of firm (pg 39)
• MS needs urgent interim relief: RKL ‘ran riot’ using ‘might and muscle’ (pg 40)
• Two partners accounting for 15-20% of revenues have resigned since MS ouster (pg 40)
• 23 partners invited by MS to join equity make up 60-70% of revenue (pg 40)
• Balance of convenience in Saraf’s favour since locked out of email, etc (pg 41)
• Whether firm is dissolved can only be decided by arbitrators (pg 42)

Arvind Nigam’s written submissions for MS

• MS senior counsel Arvind Nigam’s written arguments (pg 45)
• Nigam talks partnership act (pg 46)
• The L&L brand does not belong to RKL but to the firm (pg 49)
• Remedy for wrongful expulsion is reinstatement (pg 50)
• MS relief is statutory under Partnership Act, not specific performance (pg 53)
• RKL’s new equity partners could not have been inducted unilaterally (pg 56)
• If termination of MS was effective, then firm would be dissolved (pg 58)
• RKL allegation that MS leaked confidential information to press has no evidence (pg 60)
• RKL had also spoken to Kian from LI (pg 60)
• Allegation that MS ‘has affinity for Kian’ false: MS had blacklisted Legally India for 2 years (pg 61)
• It was RKL who commented ‘on record on gossip columns’ & LI article confirming partnership dispute (pg 61)
• Norton Rose, clients called L&L partner about turmoil & comments on LI story (pg 61)
• MS warned RKL before Zoom call that it would end up on Legally India (pg 62)
• RKL first started discussing allegation relating to foreign bank in public (pg 62)
• Transcripts from Zoom call: Partners request RKL end to call (pg 63)
• Associate requests handling 1:40 hour Zoom call more sensitively next time (pg 63)
• MS did not breach confidence in filing relevant documents in court (pg 64)
• Client lists, partnership deed’ are not ‘confidential document- - [s’ (pg 64)]
• WhatsApp messages are not confidential either but evidence (pg 64)
• RKL’s allegations vs MS misconduct are ‘wild and reckless’ and in ‘bad faith’ (pg 66)
• RKL agreed to dissolve (MS did not) (pg 66)
• RKL tells senior partners that he agreed with MS to dissolve in Dec 2019 (pg 67)
• Corona gets RKL to extend dissolution notice period in April 2020 (pg 68)
• RKL extends notice of dissolution to 31 October 2020 (pg 68)
• MS claims he wanted to professionalise the firm, RKL did not (pg 69)
• RKL asks for golden handshakes repeatedly (see messages below) (pg 69)
• All of this should be settled in arbitration (pg 72)
• MS is not asking DHC to pronounce on RKL’s purported retirement, only on wrongful expulsion of MS (pg 75)
• MS expulsion is void and of no legal effect under partnership law (pg 76)
• If MS was validly expelled, the firm is now dissolved and both RKL & MS should run firm until dissolution (pg 77)

Promod Nair’s submissions for MS

• Promod Nair’s Submissions for Saraf (pg 78)
• Nair summarises RKL’s case (pg 78)
• Expulsion of MS is illegal and contrary to deed and law (pg 79)
• MS’ relief would not create new status quo but only restore last uncontested position (pg 80)
• Partnership is relationship of equals, not master and servant (pg 80)
• RKL’s induction of new ‘equity partners’ can only be assignment of RKL’s economic interest (pg 80)
• RKL’s narrative is ‘unfair’ and a ‘smokescreen’ to divert from the issues (pg 81)
• RKL to MS: ‘Am sick and tired of dealing with our Lit partners, I would rather consider dissolving both the firms’ (pg 83)
• MS warned RKL that 50% of Mumbai office could disappear with Manan Lahoty departure, overnight (pg 83)
• MS tells RKL: More than 20 cap markets candidates from top firms refused to join because of L&L reputation (pg 83)
• MS claims RKL refused to discuss equity dilution for 2 months with him (pg 84)
• Excerpts of ‘frustration’ expressed by lawyers in firm with lack of commitment to reform (pg 85)
• Executive committee partners express ‘frustration’ at RKL dilution proposal (pg 88)
• RKL asks MS how much MS would pay RKL to leave the firm (pg 89)
• If status quo is not restored, irreparable injury would be caused to MS and other partners in firm (pg 91)
• Excerpt from mediator report: ‘comprehensive final settlement… efforts… unfortunately have not fructified.’ (pg 96)
• Nair distinguishes each case relied on by RKL as inapplicable or actually in favour of MS (pg 96)

[documentcloud https://www.documentcloud.org/documents/20433566-saraf-v-luthra-saraf-written-submissions.html Written submissions for Mohit Saraf by Parag Tripathi, Arvind Nigam, Promod Nair] ### Rajiv Luthra’s counsel written submissions

We have also published in full the 69 pages of submissions by Luthra’s lawyers.

Again, we have annotated the PDF with highlights - you can click on each of the below links that will take you to the section in turn, or navigate the annotations once you are browsing the document. #### Abhishek Manu Singhvi’s written submissions for RKL

• Abhishek Manu Singhvi summarises arguments for RKL (pg 1)
• MS’ section 9 petition is not maintainable, since RKL’s 2 new equity partners are not party to the proceedings (pg 4)
• Cites deed, noting RKL has right to induct new equity partners (EP) without management rights, creating two classes of EP (pg 4)
• Even if MS does not consent to new EPs having management rights, they are still EPs (pg 5)
• Partnership Act allows inducting new partners if deed allows this (pg 5)
• MS’ purported 23 new equity partners are not in a contract with RKL, therefore their rights can not be part of S. 9 (pg 6)
• MS claims RKL has no right to induct new EPs without RKL’s consent: so how could MS create 23 new EPs? (pg 6)
• MS’ S. 9 prayers also pertained to non-corporate L&L partnerships, which are very different and can’t be part of arbitration (pg 6)
• MS had also included several employees in the petition and later sought to have those deleted (pg 7)
• MS is not seeking reinstatement but ouster of RKL by HC (pg 8)
• MS only amended prayers to restore status quo ante before the court (pg 8)
• Case law cited: Injunction only allowed where specific performance exists under SR Act (pg 9)
• RKL has right under deed to terminate MS: if aggrieved, MS only has remedy in damages (pg 11)
• Court can not force MS and RKL to manage the firm jointly again, since both have stated they can’t work together (pg 12)
• MS can not claim specific relief if he himself was at fault & acted in bad faith (pg 13)
• MS acted in bad faith by attempting to retire RKL (pg 14)
• Damages for MS would suffice, since he can just continue practising law independently (pg 16)
• RKL did not retire, only calling for termination, dissolution of Delhi, Mumbai firms (pg 16)
• MS agreed to termination of the partnership on 9 January 2020 (pg 16)
• RKL tells MS that he would terminate partnership but RKL would remain in the firm (pg 17)
• RKL blames MS’ browbeating for why new EP induction was held up for a year (pg 17)
• RKL announcing new EPs was understood by MS to mean that RKL was not retiring (pg 17)
• In the Zoom townhall, RKL reiterated that he was not retiring (pg 17)
• RKL had kept renewing termination period but since he continued negotiations, there was no question of it having taken effect (pg 18)
• MS was aware that claim of RKL’s retirement was ‘fallacious’ (pg 19)
• MS ‘bad faith’ claim of RKL’s retirement relied on reading RKL’s messages out of context (pg 20)
• The Deed: RKL has right to terminate MS (pg 20)
• Deed is clear that a partner can be terminated without dissolution of the firm (pg 21)
• The deed specifies that the partnership would continue even without a 2nd partner (pg 21)
• It is clear the deed foresees a ‘terminated party’ rather than only termination of the deed (pg 21)
• In any case, only RKL had right to ‘dissolve or terminate’ the deed (pg 22)
• Relying on case law, even if no explicit RKL power to terminate, RKL had ‘implied power’ (pg 23)
• MS selectively claims RKL gave notice to retire, but that MS not given notice of termination (pg 23)
• RKL told MS no further notice of termination need be given (pg 25)
• Out of good will, RKL offered MS 3 days severance pay despite termination of MS without notice (pg 25)
• RKL justified in terminating MS, who insulted RKL & family & falsely alleged kick backs (pg 26)
• MS allegations of RKL cheating ‘disproved after an audit’ (pg 27)
• RKL accuses MS of ‘trying to rally people against him’ (pg 27)
• RKL makes ‘clear by implication’ that MS ‘is behind the Legally India articles’, RKL says has proof that kick back allegations false (pg 28)
• MS LinkedIn profile falsely states he was a senior partner at L&L since 1990 (pg 28)
• MS has admitted ‘his conduct has been rude’ (pg 28)
• MS falsely claimed Citibank was one of his clients (pg 28)
• RKL did have greater power than MS under the deed, and MS not entitled to contrary equitable remedy (pg 31)
• Filing WhatsApp convos in court breached confidentiality, with details now ‘find mention on legal news websites’ (pg 32)
• If MS returned into firm, it would ‘result in acrimony’ and hamper ‘smooth functioning’ (pg 33)
• AMS explains the case law relied on by RKL (pg 37)
• MS written rebuttals make case a ‘moving goal post’, modifying prayers, contradictions (pg 43)
• If L&L success due to MS, ‘surely, he would be equally successful if he were to start another firm in his own name’ (pg 46)

Neeraj Kishan Kaul’s written submissions for RKL

• Summary of Neeraj Kishan Kaul written arguments (pg 49)
• MS had misrepresented to court that RKL had retired / withdrawn (pg 50)
• MS had offered to be bought out, with his equity to be distributed to younger partners (pg 51)
• MS praised RKL for firm & Reliance deal (pg 52)
• RKL had power under deed to terminate MS or dissolve firm (pg 52)
• MS conduct was ‘unbecoming of lawyer’, therefore ‘squarely’ a ‘material breach’ under deed (pg 53)
• Bombay HC did not bar expulsion of partner for breach of contract (pg 53)
• RKL had given MS proper notice under deed (even if 90 days were not given) (pg 54)
• RKL right to terminate unilateral under deed, and would not need 2 new EP consent (pg 58)
• Section 9 would not allow MS the relief he is seeking (pg 60)
• MS filed confidential WhatsApp conversations in court (pg 66)
• MS’ counsel in open court mentioned financial and deal details (pg 67)
• Legally India ‘narrative clearly against’ RKL ‘thereby leaving no doubt who was feeding them’ (pg 67)
• Legally India published the full Delhi HC petition of MS (pg 67)
• Client confidentiality breached since deal and client details published Legally India (pg 67)
• Legally India published revenue details: First time law firm commercial details in public (pg 67)
• MS has ‘always communicated’ with ‘one Kian from Legally India’ (pg 68)

[documentcloud AMS and NKK written submissions on behalf of Luthra#### Legally India’s side of the story

We have reached out to both Saraf and Luthra; neither has responded for comment.

At this point, since Legally India has clearly been honoured enough to find mention several times in the proceedings, it seems fitting to end with a summary of our reporting on the Saraf v Luthra saga to date, including in terms of the sourcing each was based on (although we can not confirm or deny specific anonymous sources, as a matter of policy).

• our first story in September 2020 about the existence of the acrymonious dispute within the wider partnership and Saraf and Luthra was based on internal sources as well as Luthra’s formal comment confirming it.
• accounts from the Zoom call town-hall attended by 300 of the firm’s lawyers.
• internal emails sent to either the entire firm or the entire partnership by both Luthra and Saraf.
• an analysis of the partnership deed, which had been circulated to the entire L&L partnership.
• reports of court proceedings and court-ordered arbitration.
• the revenue of the firm that had been mentioned in open court,
• and profitability and more revenue information on the firm, based on Saraf’s petition filed in the Delhi high court, which by the time we had reported it was already circulating in the wider market outside the firm.