Home / Companies / Cyrus Mistry, firms to face Rs500 crore defamation suit

Mumbai: A Mumbai magistrate’s court on Tuesday admitted a Rs500 crore criminal defamation suit, filed by R. Venkataramanan, a trustee at Tata Trusts, against ousted Tata Sons Ltd chairman Cyrus Mistry and his family investment firms.

Mistry and the firms—Cyrus Investments Pvt. Ltd and Sterling Investments Pvt. Ltd—will have to face trial on charges of criminal defamation under sections 499, 500 and 501 of the Indian Penal Code and appear before the court on 24 August.

Venkataramanan filed the defamation complaint in his personal capacity on 7 June through the law firm MZM Legal, citing allegations that Mistry made against him in an email he wrote to Tata Sons directors and Tata Trusts trustees on 25 October. The allegations pertained to some transactions at AirAsia India, Tata Sons’ joint venture with AirAsia Bhd.

Mistry was sacked by Tata Sons in a boardroom coup on 24 October, following which he wrote the email that contained the allegations against Venkataramanan and others at Tata Sons, the Tata group holding company, and Tata Trusts.

According to Venkataramanan’s complaint, the email, which found its way to the media, caused “irreparable" damage to his reputation among colleagues, family, friends and society. The complaint said Mistry had also made “false, malicious and derogatory" allegations against Venkataramanan in filings with the company law tribunal in Mumbai.

In his petition, Venkataramanan pleaded that Mistry, Cyrus Investments and Sterling Investments be directed to cease and desist from circulating and/or publishing any defamatory, derogatory, malicious comments or statements, articles and posts through any medium either directly or indirectly against him.

He also demanded that Mistry and his firms be directed to immediately withdraw the statements and posts published till date.

“It’s the first step in the litigation and it may go on for several months," said Ramesh K. Vaidyanathan, partner at Advaya Legal, a law firm. “One can’t commit on the merits of the suit just as yet," he said.

Following his removal, Mistry and his family firms challenged his ouster at the National Company Law Tribunal (NCLT).

On 17 April, NCLT dismissed the main petition filed by Mistry and his family firms alleging mismanagement and oppression of minority shareholders. The two-member bench also refused to grant him a waiver from the minimum shareholding requirement for filing such a petition.

Subsequently, the Mistry family firms moved the National Company Law Appellate Tribunal (NCLAT) against NCLT’s decision.

“The move by the Tata Trustees to attempt to muzzle and interfere with legal proceedings faced by them, now before the NCLAT, will be effectively and appropriately dealt with," the office of Cyrus Mistry said in a statement. “We believe in the nation’s legal system and know such subversion of justice systems will meet its fate."

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