The National Company Law Tribunal on Monday reserved its order till January 18 on a contempt petition filed by two Cyrus Mistry family companies against Tata Sons and its directors, including Ratan Tata, alleging violation of NCLT directives in taking steps to remove Mistry from the board, reports fe Bureau in Mumbai. The order was reserved by a division bench of the NCLT comprising BSV Prasad Kumar (member, judicial) and V Nallasenapathy (member, technical) after arguments by all the parties concluded on Monday.
In a January 11 petition, Mistry had alleged that Tata Sons by convening an EGM to remove him as a director amounted to contempt of the NCLT’s directions and violated the undertaking it had given to the tribunal. “The consent order as aforesaid was clearly binding upon and was required to be obeyed by the contesting respondents and any breach thereof would clearly amount to a wilful disobedience and contempt of the order of this honourable tribunal dated December 22,” the petition read.
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Mistry had in December 2016 moved the NCLT alleging oppression of minority shareholders by Tata Sons and the tribunal had asked all parties to not “initiate any action or proceedings over this subject matter pending disposal of this company petition”. However, on January 6, Tata Sons called for an EGM on February 6 to vote him off its board. According to sources, it had taken the step to ensure confidentiality ahead of the many legal battles the two sides are headed for.
Abhishek Manu Singhvi, who represented Tata Sons at the hearing, said the tribunal’s December 22 order restricted both the sides from taking fresh legal actions, it didn’t stop them from taking company decisions.
Following Mistry’s removal from the chairmanship of Tata Sons on October 24, the two sides have been involved in a bitter battle that started in the board room but is now out in the courts. First, Mistry stepped down as director of all other listed Tata Group companies following him being voted off the board of Tata Consultancy Services (TCS) at an EGM. Then he approached the NCLT seeking relief under sections 241 and 242 of the Companies Act, 2013.
The Tatas, on their part, claim that Mistry doesn’t have a 10% stake in Tata Sons to approach the NCLT, while also sending him legal notices for deliberately sharing sensitive and confidential information that he had access to as a director of the company. The Tata-Mistry fallout has also taken a toll on the Tatas’ decades-old friendship with Nusli Wadia with the former accusing him of acting in concert with Mistry against the interests of the Tata Group. Wadia, on his part, has called all allegations against him a part of vendetta by Ratan Tata and has already moved the Bombay High Court in a Rs 3,000-crore defamation suit against him and Tata Sons.