Mumbai: The National Company Law Tribunal (NCLT) reserved its order on the contempt petition filed by the Cyrus Mistry family firms till 18 January. The contempt petition, filed by Cyrus Investments Pvt. Ltd and Sterling Investments Pvt. Ltd, sought to restrain Tata Sons Ltd from going ahead with a meeting of shareholders to eject Mistry as a director from its board.
The petition claims that Tata Sons calling the extraordinary general meeting (EGM) violates the undertaking given by its lawyers when the NCLT heard an earlier petition filed by the investment firms on 22 December.
Lawyers for the Mistry family firms argued that Tata Sons and Tata Trust agreed that they won’t take any incremental action till an earlier petition was heard by the NCLT on 31 January.
The counsel for Cyrus Mistry termed the extraordinary general meeting, called to oust him on 6 February, a violation of NCLT’s directives.
“There is no hurry for Tata Sons to remove Cyrus Mistry as director of Tata Sons,” said Janak Dwarkadas, a senior counsel representing Mistry.
Abhishek Manu Singhvi, who argued for Tata Sons, said that the tribunal’s directives on 22 December just meant that no legal action or proceedings can be undertaken by Tata Sons, Tata Trusts or the Mistry family firms. However, they were allowed to take company decisions, he said.
He cited that Tata Sons were seeking Cyrus Mistry’s removal as a director as he was acting in a manner detrimental to the company. In support, he presented a 12 January letter written by Mistry to the Income Tax Department where the ousted chairman highlighted that the Tata trustees were interfering in functioning of Tata Sons in violation of provision of the Income Tax Act.
The I-T department had called for an explanation from Tata Sons seeking whether the trusts were involved in activities other than charitable purposes.