Boardroom tussle: NCLT dismisses petition against Tata Sons, directors

The tribunal observed that there is “no contempt” by Tata Sons in the issue.

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Cyrus Mistry, Former Tata Sons Chairman.

The National Company Law Tribunal (NCLT) on Wednesday dismissed 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. The tribunal observed that there is “no contempt” by Tata Sons in the issue.

NCLT, however, has allowed Mistry to file an affidavit in the tribunal seeking a stay on the extraordinary general meeting (EGM) of the shareholders of Tata Sons scheduled on February 6, to remove him as a director from the board. The NCLT has given Mistry 3 days to file the affidavit after which Tata Sons can file a rejoinder to the submissions made by Mistry in the fresh affidavit. Cyrus Investments Ltd and Sterling Investment had filed a contempt petition seeking injunction against Tata Sons barring from “convening or holding of the EGM scheduled for February 6, 2017, or any other date or from transacting any business threat”.

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The contempt plea alleged that the respondents have “committed a breach” of an NCLT order of December 22 last year 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.”

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It sought punishment for 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 6 months or fine of Rs 2,000 or both. Earlier, NCLT had accepted a caveat filed by Mistry’s firms in the ongoing tussle. The caveat technically barred Tata Sons from holding “any further actions in the issue” without prior information to NCLT.

Tata Group spokesperson had earlier said that there was no contempt in convening the EGM by Tata Sons to eject Mistry from the board.