Cyrus Mistry has yet again moved the National Companies Law Tribunal (NCLT), following Tata Son’s notice calling for an extraordinary general meeting for his ouster as a director from the board of Tata Sons.
Mistry filed a contempt petition in the NCLT last Wednesday, alleging that such a move is violative of the interim order passed by the NCLT on 22 December, last year.
While the Petitioner’s case largely rests on the ‘assumption’ that NCLT had granted three interim reliefs, one of which was restraining all respondents from removal of Mistry from his directorship, it was the Respondent’s case that either all or none of the interim measures had been granted, implying that none were granted.
As a response to this, Aryama Sundaram, who appeared for Mistry, argued that these interim measures were, in fact, not ‘rejected’ but were ‘deferred’ for consideration.
Sundaram further contended that this is a tactic to create multiplicity of proceedings before the NCLT. Sundaram argued,
“There is no urgency in removal, why can the respondents not wait until the final hearing is done? The whole point of the interim order was to maintain status quo which the respondents are disrupting”
Abhishek Manu Singhvi, referring to this petition as ‘surreptitious circumventive behaviour’, brought the NCLT’s attention to the wordings ‘initiate any action or legal proceedings’ in the interim order and interpreted it to exclude the removal of Mistry from his position as directorship, as not being an action falling within the confines of the order.
Singhvi further argued that a ‘consent order’ of even a substantiative nature, much less a procedural one, cannot be the subject of a ‘contempt petition’.
Pointing to a Supreme Court precedent in this regard, Singhvi further added that there was ‘no undertaking’ given by the Respondents to not initiate any such action against Mistry, and even if they did, it would not hold valid.
Sundaram refuted to the argument by saying that there can be ‘no consent’ on ambiguity, and to say that such a consent order does not amount to ‘undertaking’ is erroneous. Janak Dwarkadas, stepped in here to highlight the provisions of the Contempt of Courts Act, 1971, according to which, a ‘civil contempt’ is one which encompasses within itself any ‘wilful disobedience’ .
During the course of his arguments, Singhvi also raised the issue of Mistry disclosing certain information to the Income Tax department, relating to the functioning of Tata Trusts and their involvement in Tata Sons, thereby disclosing information which wasn’t required.
Dwarkadas, however, clarified that the Income Tax Department had asked for certain particulars with respect to functioning of Tata Trusts since they enjoy tax exemptions. He further brought the NCLT’s attention to Sections 175 and 176 of the Indian Penal Code, 1860 which provide for imprisonment of those who do not produce documents asked for by public servants.
After nearly 3 hours of arguments, Judicial Member B.S.V Prakash Kumar reserved the order for January 18, 2017.
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