Interim relief for Tata Sons as tribunal rejects Mistrys' plea
| Updated On: 2017-01-19 06:31:13.0 | Location :
NCLT bench has given liberty to the Mistry family companies to file an affidavit within three days on the issue of Tata Sons holding an extraordinary general meeting (EGM) on February 6.
In a huge blow to Tata Sons ousted chairman Cyrus Mistry, National Company Law Tribunal (NCLT) on Wednesday dismissed a contempt petition which alleged the violation of NCLT directives in taking steps to remove him from the board of Tata Sons.
However, in a relief bench has given liberty to the Mistry family companies to file an affidavit within three days on the issue of Tata Sons holding an extraordinary general meeting (EGM) on February 6. Tata Sons was also asked to file a rejoinder if any, three days thereafter.
In the operative part of the order, a division Bench of the NCLT said, “The contempt petition is dismissed.” The Bench was of the view that the action of Tata Sons did not amount to contempt of court. In their petition, Cyrus Investments and Sterling Investment had also sought injunction against the Tata Sons barring them from “convening or holding of the EGM scheduled for February 6, 2017, or any other date or from transacting any business thereat.”
Earlier, the NCLT had kept this matter for hearing on January 31 and February 1 when the main petition filed earlier by the two Mistry companies against Tata Sons would be heard. The earlier petition had challenged Mistry’s removal as the chairman of Tata Sons alleging bad practices, oppression and mismanagement in the holding company.
The NCLT, on December 22 last year, had refused interim relief and posted the main petition for hearing on January 31 and February 1. Today, the tribunal clubbed the issue of holding EGM of February 6 along with the hearing of the main petition.
Meanwhile, the Mistry companies filed a contempt plea with the NCLT against Tata Sons alleging that the respondents “committed a breach” of an NCLT order of December 22 by giving a special notice on January 3, 2017, for removal of Mistry as a director of the board of Tata Sons, “in clear violation of the order”.
It sought punishment for Ratan Tata, other directors of Tata Sons and trustees of Sir Ratan Tata Trust and Sir Dorabjee Trust - N A Soonawala, R K Krishnakumar and R Venkatramana - under the Contempt of Court Act, which provides for simple imprisonment for a term which may extend to six months or fine of Rs 2,000 or both.
Last October, Tata Sons removed Mistry as its Chairman, nearly four years after he took over the reins of the over $100 billion salt-to-software conglomerate.
The NCLT dismissed the contempt petition of Mistry’s family owned companies, saying it does not amount to contempt of court.