MUMBAI: The National Company Law Tribunal (NCLT) on Friday dismissed a plea by Cyrus Mistry’s family firms for transfer of the case against Tata Sons Ltd to the Delhi bench from Mumbai, and penalized them Rs. 10 lakh for filing the petition.
“The plea is dismissed with penalty of Rs. 10 lakh to be borne equally by both the companies,” said Justice M.M. Kumar, while pronouncing the order. As a result, the case will continue to be heard by the Mumbai bench of the NCLT.
Tata Sons’ former chairman Mistry’s family firms – Cyrus Investments and Sterling Investments – had held that the Mumbai bench could have a cause of bias. Abhishek Manu Singhvi, counsel for Tata Sons, had opposed the transfer and saying that the plea amounts to forum shopping and bench hunting, and deserves to be dismissed.
“Tata Sons is pleased with the court order and respects the decision of the judiciary,” Tata spokesperson said. Mistry’s office was not immediately available for a comment.
Mistry, who was removed as Tata Sons chairman last year, had a small victory in September as Appellate Tribunal granted a legal waiver to his family firms to file a case against Tata Sons. The National Company Law Tribunal had earlier rejected their petition citing, as their shareholding was less than what was needed under law to move against the company.
“This is an extreme case of forum shopping by a large business house. Indeed, a worrisome development since it casts doubt on the integrity of a quasi-judicial authority like NCLT,” said a lawyer representing Tata Sons. “After patiently hearing the parties, the Principal Bench, Delhi has out rightly dismissed the request for transfer and imposed unprecedented costs of Rs. 10 lakhs on Mistry’s companies for filing such a frivolous motion.”
Mistry’s family firms, which own 18.4 percent equity shareholding in Tata Sons, are trying to press allegations of mismanagement and oppression of minority shareholder interests at Tata Sons. The legal battle followed an ugly public spat between Mistry and the Tata Group after he was sacked in October last year.
The 344-page petition was served on 23 people that include industrialists Ajay Piramal and Venu Srinivasan, Harvard Business School dean Nitin Nohria, country head of private equity fund Bain Capital Amit Chandra, retired bureaucrat Vijay Singh and former Tata veteran NA Soonawala.