The respondent’s case: Luthra’s seniors get busy
Luthra’s counsel’s arguments included that Saraf’s inner assertions that Luthra had retired from the agency have been a “misrepresentation”, that Luthra had the correct and trigger to terminate Saraf’s partnership, in addition to that Saraff had insulted Luthra, carried out himself as unbecoming of a lawyer and was due to this fact in materials breach of the deed, and that Saraf had admitted he was impolite to Luthra.
Plus, that Saraf had no case underneath part 9 and elsewhere for interim reduction.
November 18: Abhishek Manu Singhvi disputes RKL’s retirement
Singhvi hammered residence the purpose that Luthra didn’t retire a number of instances, in line with B&B’s transcript of the proceedings.
“2-3 stray sentences can not make my retirement,” Abhishek Manu Singhvi had informed the court docket. “The query is whether or not I’ve left or I’m about to go away. The court docket isn’t seeing the rightness or wrongness.
“There isn’t any query of me retiring. He’s counting on a supposed voluntary retirement by me. Luthra wasn’t handing him the agency. Assuming that in my second of ache I stated that I wish to depart, can the court docket grant reduction on such a stray sentence?”
Singhvi additionally stated that part 9 of the Arbitration Act for interim reduction was not appropriate on this case, because it was an “interpretation train” and the place was not “crystal clear”.
Singhvi additionally claimed that Luthra had powers of ultimate choices and veto powers underneath the deed.
“Solely Luthra has the facility to appraise the efficiency of Saraf. Spirit of the deed is that there’s a dominant particular person.. there are particular rights: I can both withdraw myself or retire. Saraf can not evict, terminate, expel Luthra,” in line with B&B’s tweets.
In what wouldn’t be the primary time, Singhvi additionally appeared to have implicitly complimented Legally India about its velocity and depth of protection of the dispute:
[Talking] to the press.. all the pieces is revealed by that portal earlier than the ink is dry
Two days later (and within the written submissions) he and Luthra’s facet would elaborate additional on this.
November 19, Neeraj Kishan Kaul takes over
For essentially the most half, Kaul reiterated Singhvi’s factors, claiming that Luthra had the facility underneath the deed to terminate, additionally elevating the next complaints:
- Saraf had unilaterally inducted new companions and given them fairness shraes, which was “dishonest and opposite to” the deed,
- Saraf had disclosed consumer particulars, WhatsApp conversations of companions and monetary particulars,
- Saraf had been inflicting “mayhem” and been “backstabbing” his mentor, and now needed an order to “return to the agency and trigger mayhem, as if he hasn’t created sufficient mayhem already”,
- and another barbs directed at Saraf: “He himself grew on the platform that Luthra set for him. Don’t give this impression that you’re the karta-darta of the agency”.
Kaul additionally mentioned clause 8 of the deed about termination and dissolution, claiming that Luthra didn’t have to attend 90 days to terminate Saraf and will the truth is accomplish that unilaterally.
Kaul stated that Saraf ought to both take the goodwill fee (underneath the deed) and never compete, or to start out his personal apply with no goodwill fee.
November 20: Singhvi continues, claims Saraf has ‘particular affinity’ for LI
Singhvi was again within the saddle on 20 November.
In substance, Singhvi argued that Saraf and Luthra’s was by no means an “equal association”.
And Singhvi additionally name checked Legally India, claiming that “Saraf has a particular affinity for the editor of Legally India” and “lamenting that data that might damage the agency was revealed on the web site… Accuses Saraf of washing soiled linen in public. Can a fiduciary relationship exist after this occurs?”
1 December: One other day for Kaul
Okaul claimed that Saraf had been asking for Luthra to “purchase me off” and that Saraf had “falsely unfold rumours” about Luthra’s exit, which was Saraf’s personal “unilateral and dishonest interpretation” of Luthra’s WhatsApp messages.
“Mr Luthra has defined that there’s a distinction between withdrawing, dissolving and terminating the partnership. The facility to terminate the partnership of a accomplice is with Luthra,” reiterated Kaul.
Kaul additionally famous that a lot of Luthra’s emails had made it clear that Luthra wouldn’t be retiring.
7 December: Parag Tripathi in rejoinder for Saraf
According to Bar & Bench’s Twitter thread, Tripathi stated that this was at coronary heart a dispute between companions, of whom one had expelled the opposite and whether or not he had the facility to take action. Saraf had been compelled to go to court docket as a result of Luthra “has stored bouncers exterior to forestall me from coming to workplace. I might have accomplished it on 12/10/2020 and thrown him out of the listing of companions. However I didn’t and he did.”
If I had accomplished what he did to me, the identical argument would have occurred? Is that this the legislation that in a partnership dispute, whoever pulls the set off first will get away? You expel a accomplice and the accomplice has no proper? As a result of there can’t be particular efficiency? The place is that this coming from?
Tripathi claimed the deed didn’t enable Luthra to do no matter he needed and Saraf was not in a servant relationship to Luthra underneath the deed.
“Please construe the deed in strictest sense.. even on an everyday studying there’s nothing (on energy to expel),” claimed Tripathi.
9 December: Arvind Nigam for Saraf
In abstract, Arvind Nigam argued that Saraf ought to proceed being a accomplice, till the partnership was absolutely dissolved.
“Conduct is irrelevant. I stands out as the worst accomplice. If the agency does to dissolution, it received’t be that I received’t get a share,” stated Nigam. “The agency court docket might have been dissolved unanimously. He has grievance in opposition to me. What’s his treatment? Please see part 44 of Partnership Act.”
Nigam additionally stated that if Saraf was certainly terminated, how might Luthra stay a accomplice in a “partnership of 1”. “They’ll’t say the agency is surviving with one [partner].”
9 December: Promod Nair continues for Saraf
Nassist stored it temporary and famous that each one correspondences between companions had occurred on WhatsApp, together with Luthra’s discover to Saraf, which is why these have been shared within the pleadings. “The perfect companies are those which are a magnet for one of the best legal professionals. How one can retain them is the core of the problem,” he added. “Until 2014-2015, the agency had a golden run. Then it had issues retaining one of the best and brightest legal professionals.”
The written submissions filed on 14 December 2020
Saraf’s written submissions
We have obtained a duplicate of documentcloud the 105-page written submissions to the court made after the tip of oral hearings on 14 December by Saraf’s arguing senior counsel Parag Tripathi and Arvind Nigam and counsel Promod Nair.
You possibly can learn their written submissions in full beneath, from which now we have compiled essentially the most pertinent and attention-grabbing highlights beneath, every 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
Promod Nair’s submissions for MS