The National Company Law Tribunal (NCLT) has dismissed the contempt of court application filed on behalf of ousted Tata Sons’ Chairman Cyrus Mistry, which was filed through his family-owned firms.
NCLT also said the petitioners has the liberty to file an affidavit in the next three days on the earlier petition of Tata Sons calling an extraordinary general meeting to remove Mistry as its director. Following which, Tatas can file a rejoinder within three days, NCLT said in its judgement on Wednesday.
All the petitions will be heard along with the final hearing on January 31.
On Monday, NCLT which heard the contempt petition filed by Cyrus Mistry earlier, said it will pronounce the verdict on January 18.
On January 11, Mistry has moved NCLT, stating that the proposed move to remove him as Tata Sons’ director violates the undertakings given before the tribunal.
Tata Sons, the holding company of Tata Group companies, has convened an extraordinary general meeting (EGM) on February 6 to remove Mistry as director.
In his petition, Mistry had also sought the prevention of issuance of securities by Tata Sons that would dilute the stake of the two investment companies through which Mistry had filed the case. He had filed the first petition before the tribunal on December 20, 2016, through his family companies Cyrus Investments and Sterling Investment Corporation (the petitioners). It was filed on account of acts of “wilful disobedience” by the respondents by disobeying the tribunal’s order dated December 22, 2016, the Mistry camp said in the contempt petition.
Tata Sons, its interim Chairman Ratan Tata, directors Amit Ranbir Chandra, Ishaat Hussain, Ajay Piramal and Venu Srinivasan among others are the respondents in the case filed before the NCLT.
The tribunal on December 22 had recorded that no party would “initiate any action or proceedings over this subject matter pending disposal of this company petition”. Yet, Tata Sons, which is the first respondent in the petition, has convened a shareholders at the behest of the trustees, all of whom are also parties.
“There is no contempt. We will make our submissions to the NCLT,” group spokesperson at Tata Sons said on January 11. This is the first contempt case heard by NCLT under the new company law.
Under the new company law, NCLT has been given powers of punishment for contempt of court. The violation of an order of this tribunal is directly liable to punishment under Section 425 of the Companies Act, 2013.
The EGM was convened through a circular resolution, and therefore the respondents have also acted in contempt of the order dated December 22, Mistry's petition had said, adding this is “wilful, deliberate and contumacious” breach, and therefore the respondents are guilty of contempt and punishable for the same.