HYDERABAD: A company owned by the family of Tata Sons chairman Cyrus P Mistry has won a victory in the Andhra Pradesh high court as it tries to safeguard the assets it bought from the heirs of the erstwhile Nizam of Hyderabad. In an order last week, the court put a temporary halt to the sale or transfer of Cyrus Investments' assets in Hyderabad by the lawyer who was given a general power of attorney for the assets by the Mumbai-based company.
Cyrus Investments, which owns 9.2% of the Shapoorji Pallonji stake in Tata Sons, accuses the GPA holder PS Prasad of fraudulently selling the land it bought from heirs of Nawab Mir Usman Ali Khan in 1967. Prasad denies the allegation. Cyrus Investments was contesting a single judge's stay order on the company's decision to withdraw the GPA granted to Prasad. The land that the Shapoorji Pallonji family bought is located in Hyderabad's busy localities of Hafeezpur and Hashmathpet and estimated to worth thousands of crore.
Faced with numerous legal suits over the properties from the heirs of the Nizam, Cyrus Investments had appointed Prasad as its attorney in April 2004 to identify its share of land and buildings, secure the property rights, and manage them. Cyrus Investments served notices on Prasad in March following a spate of complaints it received from individuals alleging Prasad sold them properties without clear titles. The investment firm believes that the attorney did not act in its interests but rather sold properties worth at least few hundred crore without its consent.
Prasad's legal counsel NM Krishnaiah told ET last month that his client had acquired the rights over the properties from Cyrus Investments in January 2005, fought legal cases and secured titles for some of the land. Admitting that Prasad sold some 50 acre of land after securing clear titles, Krishnaiah said his client possessed rights since he "had struggled hard to protect the suit schedule properties at the field level and also in courts of law." Prasad moved high court last month and obtained an interim stay on Cyrus Investments' move to withdraw the power of attorney. Challenging the stay order, Cyrus Investments told the court that Prasad was "indulging in unlawful activities and making unjust gains." Further, it accused Prasad of misusing the power of attorney to execute "several sale deeds in favour of several persons with respect to the same property."
Cyrus Investments told the court that GPA holder never rendered proper account to it with respect to various transactions he undertook on its behalf. Further, it submitted to the court that it "came to know that several criminal proceedings are pending against Respondent No. 1 (Prasad) and arrest warrants are pending against him from various courts, including courts located outside India." Prasad did not reply to ET seeking comments on the allegations. A representative for Cyrus Investments said the court heard both the sides and delivered an interim order protecting the land while reserving judgement.