Mumbai: Two days after it dismissed a plea by Mistry family firms claiming Tata Sons Ltd was in contempt of court for summoning a shareholder meeting on 6 February, the national company law tribunal has explained its decision in a detailed order.
Contrary to the interpretation claimed by the companies, the tribunal said that it had not issued an order on 22 December asking Tata Sons to hold off on “dealing with the affairs of the company and its management.”
Cyrus Investments Pvt. Ltd and Sterling Investment Corporation Pvt Ltd filed a contempt petition with the tribunal seeking to restrain Tata Sons from going ahead with the extraordinary general meeting (EGM), aimed at evicting Cyrus Mistry as a director from the board.
Mistry was ousted as chairman of Tata Sons on 24 October in a boardroom coup. On 12 January, Tata Sons named Tata Consultancy Services Ltd’s chief executive officer N. Chandrasekaran as its new chairman.
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The contempt petition claimed that Tata Sons, by calling the meeting, had violated an undertaking given by its lawyers when the NCLT heard an earlier petition filed by the investment firms on 22 December.
The tribunal’s detailed order on Friday said that its earlier order was limited to filing additional applications and filings before various courts that could delay dealing with the main petition
The tribunal also explained why its 22 December order did not grant the Mistry firms any interim relief against possible moves by Tata Sons that would put in danger their shareholding and representation on the board.
The Mistry firms own 18.4% of Tata Sons.
“There being in-house checks and balances for the management, this bench will not normally interfere, unless action is solely done with a malafide intention to cause harm to interest of members,” the order observed.
NCLT says it believes that ordering interim relief could have hampered the functioning of the conglomerate.
The tribunal told the Mistry family firms to address their concerns about the Tata Sons shareholder meeting and club it with the first petition.