Relief for Tata Sons: Bombay HC refuses to entertain class-action suit in Tata-Mistry spat
BCCL
Synopsis
Verdict minimises the legal risks for Tata Sons as all concerned shareholders now have to file suits in their personal capacities and even the damages will be limited to personal loss.
By Ashwin Mohan, ET Now
In a relief to Tata Sons, the Bombay High Court on Monday revoked its earlier permission to hear a representative class action suit filed by six Tata group shareholders which sought Rs 41,000 crores in damages against the holding company, its directors and Tata Trusts, two individuals familar with the verdict told ET NOW on the condition of anonymity.
"The high court has revoked its own leave which was granted in December 2016 allowing six shareholders of listed Tata group companies for the institution of the suit as a representative suit to sue Tata Sons, its directors, Tata Trusts and some of the Tata operating companies," said one of the individuals cited above.
"This verdict is likely to be challenged and this case may go all the way to the Supreme Court," said the second individual cited above.
The shareholders had moved court claiming damages of Rs 41,832 crores for alleged loss caused to all the non-promoter shareholders of certain listed Tata group companies arising from a fall in share prices following the removal of former Tata Sons chairman Cyrus Mistry. It was also submitted to the court that 60 other shareholders had filed applications in support of the suit. Challenging this stance, Tata Sons argued earlier that it was "perverse to say that all non-promoter shareholders have the same grievance and are unhappy."
Tata Sons was represented by Senior Advocate P Chidambaram and Nitesh Jain, Partner, Shardul Amarchand Mangaldas. Senior advocate Dinyar Madon appeared for the shareholders and Cyrus Mistry was represented by senior advocate Janak Dwarkadas.
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The verdict minimises the legal risks for Tata Sons as all concerned shareholders now have to file suits in their personal capacities and even the damages will be limited to the personal loss of the shareholders. ET NOW was the first to report the development and is awaiting a detailed copy of the judgement. "The high court has revoked its own leave which was granted in December 2016 allowing six shareholders of listed Tata group companies for the institution of the suit as a representative suit to sue Tata Sons, its directors, Tata Trusts and some of the Tata operating companies," said one of the individuals cited above.
"This verdict is likely to be challenged and this case may go all the way to the Supreme Court," said the second individual cited above.
The shareholders had moved court claiming damages of Rs 41,832 crores for alleged loss caused to all the non-promoter shareholders of certain listed Tata group companies arising from a fall in share prices following the removal of former Tata Sons chairman Cyrus Mistry. It was also submitted to the court that 60 other shareholders had filed applications in support of the suit. Challenging this stance, Tata Sons argued earlier that it was "perverse to say that all non-promoter shareholders have the same grievance and are unhappy."
Tata Sons was represented by Senior Advocate P Chidambaram and Nitesh Jain, Partner, Shardul Amarchand Mangaldas. Senior advocate Dinyar Madon appeared for the shareholders and Cyrus Mistry was represented by senior advocate Janak Dwarkadas.
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