A Bench of Justice V Kameswara Rao of Delhi High Court today ordered for the Luthra dispute between L&L Partners Senior Partner Mohit Saraf and Founder Rajiv Luthra to be decided by mediation .
“We’ll put it for mediation..if it doesn’t work out, come back. I’ll decide the petition.”
The mediation in Luthra dispute will take place virtually either tomorrow and day after, as per Panchu’s convenience.
The Court also clarified that the fee payable to Panchu shall be shared equally by Luthra and Saraf. Senior Advocate Arvind Nigam, appearing for Mohit Saraf, said that this was not a matter that should have come to court.
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Case Arguments
While dealing with Luthra dispute and with the clause on induction of new partners to the firm, Nigam stated,
“If the two [Saraf and Luthra] 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.”
This notice period was extended on April 4, April 30 and then again on August 30. It was last extended till October 31, he said.
Nigam said that finally, on October 12, Luthra’s withdrawal from the firm was accepted by Saraf.
He went on to argue in Luthra dispute,
“I never wanted dissolution and termination of the firm. I wanted to induct new partners. Luthra has practically been a sleeping partner this year.”
Speaking of Luthra’s decision in luthra dispute to remove Saraf from the partnership, Nigam argued,
“There is no consent on dissolution of firm…not only has he terminated (me), he has removed my name and removed my access to my email, papers. Entire IT infrastructure is blocked...
…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 of the firm, which he cannot do. He has published it in the newspaper.”
Stating that Saraf has approached the High Court to challenge this decision in Luthra dispute , Nigam said,
“Irreparable damage would be caused to all the lawyers in the firm and the clients. The balance of convenience is in my favour.”
He thus sought that Saraf’s access to the firm and its infrastructure be restored, and that the bouncers deployed at the office be removed.
Revealing that Luthra’s decision was brought to Saraf’s attention through a client, Nigam concluded,
“I am sorry that this matter has come to court. It should have been mediated and settled..I am willing to go to a time-bound mediation…subject to status quo ante.”
Senior Advocate Abhishek Manu Singhvi, appearing for Rajiv Luthra, raised an objection at the very outset. He said,
“He (Saraf) has made persons who are not party to the arbitration agreement as parties.”
Singhvi submitted that to say that Luthra intended to retire was a complete red herring. Singhvi reiterated that in all crucial matters, including termination, the power belonged to Luthra and not Saraf.
“We are paying Rs 15 crores without being liable to pay“, he said.
Hence, Both the counsel opposed passing of any orders at this stage. They nonetheless agreed that the dispute be sent to mediation.
