News

July 23, 2019

Bombay High Court Quashes Proceedings Against Ratan Tata, N Chandrasekharan In Nusli Wadia Defamation Case


[ By Bobby Anthony ]

ratan_tata_n_chandrasekharan

The division bench of the Bombay High Court has quashed proceedings against former Tata Sons Chairperson Ratan Tata, its current chairperson N Chandrasekaran and eight directors of the firm in a criminal defamation case filed by Bombay Dyeing Chairman Nusli Wadia.

Lawyer Abhishek Manu Singhvi, who appeared for Tata, told the court that the case is merely the fallout of a corporate dispute between Ratan Tata and Nusli Wadia, who is a strong supporter of Cyrus Mistry, who was ousted as chairman of Tata Sons. He added that the petitioner had filed the case without applying his mind.

Singhvi told the court that what Wadia termed as defamatory is not “defamatory per se”. He stated that the November 2016 letters and minutes of a meeting circulated by Tata Sons to its group companies were not defamatory, but only sought Wadia’s removal since he was acting against the company’s interest.

It may be recalled that a magistrate’s court in Mumbai had issued notices to Tata and the others in the criminal defamation case in December 15, 2018.

The magistrate had recorded a finding that the complainant (Wadia) had made out a case against the accused persons and hence issued process (notice) against them for offences punishable under Section 500 (defamation) of the Indian Penal Code.

The magistrate's order noted that the allegations were serious in nature and that statements made by the accused persons were derogatory in nature.

However, the Bombay High Court noted that a director of a company is expected to not involve himself in a situation in which he may have a direct or indirect interest that conflicts or possibly may conflict with the interest of the company.

If the company was of the opinion that the director (Wadia) had issued a statement which is contrary to the interest of the company and used it as a ground for his removal then the action is in exercise of the provision of the Companies Act, the court stated.

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