Tata Sons on Tuesday served a legal notice on its ousted chairman Cyrus Mistry for alleged criminal breach of trust and confidentiality by filing a detailed petition in the National Company Law Tribunal, Mumbai, seeking relief.
Tata Sons demanded that Mr. Mistry stop sharing any confidential and sensitive information accessed by him on his capacity as director of Tata Sons.
Cyrus Investment Private Ltd. and Sterling Investment Private Ltd., both owned and controlled by the Mistry family, on December 20, moved the tribunal, seeking dismissal of the Tata Sons' board among others.
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Tata Sons said that as part of that petition, the two investment firms had “deliberately included in the petition, as exhibits, confidential data, business strategies, financial information pertaining to the business affairs of Tata Sons, Tata Group companies and joint ventures.”
The legal notice, served by law firm Shardul Amarchand Mangaldas & Co., said:
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“By passing on confidential and sensitive information accessed by you ..to companies owned and controlled by your family, you have acted in complete violation of your confidentiality undertakings to Tata Sons, your fiduciary duties towards Tata Sons and your obligations under the Tata Code of Conduct.
"Please note that not only have you breached your legal duties as a director, but you have acted recklessly with the sole intent to cause harm and loss to our clients.”
The notice said Mr. Mistry was entrusted with confidential and sensitive information, which was in the nature of property, in his capacity as director and he had used such information in violation of law to cause loss to Tata Sons and Tata Group companies.
It said:
“Your actions and omissions have resulted in criminal breach of trust.
“Such reckless failure on your part in discharging your fiduciary, legal and contractual duties has caused irreparable harm and damage to Tata Sons and Tata Group and our client intends to exercise all legal rights and pursue all remedies available in relation to such breach on your part.
“Your actions and omissions have exposed Tata Sons to potential claims from third parties and our client has every intention to make you liable for such claims.”
Mr. Mistry’s action was an act of mismanagement. Such deliberate act clearly established the fact that he was no well wisher of Tata Sons and the Tata Group companies. “The lack of JN Tata ethos in your conduct, which you espouse often, is obvious,” the notice said adding, ''We also demand that you ensure that any such information which is sought to be used in legal proceedings, any documents or part thereof which are unrelated to the matters being agitated in such legal proceedings are suitably redacted.”
Sumit Agrawal, founder, Suvan Law Advisors, who is advising Mr. Mistry, said courts, on the other hand, had hitherto allowed disclosures in cases where public interest outweighed the harm to protected interests.
Other side’s claim
“Can anyone claim breach of confidentiality when the claim on the other side is that there should have been disclosure of the same information in the first place to stakeholders,” Mr. Agrawal asked.
“If the information is not truthful in any petition, petitioners may be liable for misleading the court. Hence, I hope any such notice is not construed as influencing or a counterblast to the ongoing legal proceedings.”