1. NCLT reserves order on maintainability of Cyrus Mistry firms’ pleas

NCLT reserves order on maintainability of Cyrus Mistry firms’ pleas

The National Company Law Tribunal here today reserved till March 6 its order on maintainability of the petitions filed by two companies owned by the family of Cyrus Mistry against his ouster from Tata Sons.

By: | Mumbai | Updated: February 20, 2017 10:53 PM
The National Company Law Tribunal here today reserved till March 6 its order on maintainability of the petitions filed by two companies owned by the family of Cyrus Mistry against his ouster from Tata Sons. The National Company Law Tribunal here today reserved till March 6 its order on maintainability of the petitions filed by two companies owned by the family of Cyrus Mistry against his ouster from Tata Sons.

The National Company Law Tribunal here today reserved till March 6 its order on maintainability of the petitions filed by two companies owned by the family of Cyrus Mistry against his ouster from Tata Sons. As the arguments on the issue ended, the NCLT bench of BSV Prakash Kumar and V Nallasenapathy said it will pass the order on maintainability of petitions filed by Cyrus Mistry Investment and Sterling Investment Corporation on March 6.

If the petitions are held maintainable, then further hearing would continue on March 7. The NCLT would then also hear an application filed by the two firms seeking waiver of certain requirements as to eligibility for filing a petition.

Tata Sons opposed the petitions, saying as per a Supreme Court order on the Companies Act, the petitioners were not eligible to file such petitions before the NCLT as the minority shareholders.

The Mistry firms pleaded that under the Act, NCLT can waive the requirement that a petitioner should hold at least one-tenth of the ‘issued share capital’ of the company, or represent at least one-tenth of the minority shareholders.

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Tata Sons argued that if preference capital is also considered, the two petitioner firms hold only 2.17 per cent of the total issued share capital of Tata Sons.

The Companies Act also says these conditions can be waived, but the Tata Sons’ lawyers said as the petitioners did not seek waiver at the time of filing the petitions, they can not seek such a leave later.

In December 2016, the two Mistry firms challenged before NCLT Cyrus Mistry’s unceremonious removal by Tata Sons as a director of its board.┬áThe petitions alleged mismanagement at Tata Sons and oppression of minority shareholders.

  1. J
    Jon
    Feb 20, 2017 at 10:33 pm
    NCLT under 244 will not maintain on this complaint. He does not qualify under the Act.The Act's plain meaning will have to be changed to accommodate this claim. The plaintiff does not hold the type of shares mentioned as applicable for redress. Reason is Liability. They hold equity shares which are in a totally different catagory! The legislators clearly reasoned this due to standard accounting practices and legal liabilities which follow per each share "bucket". There is another reason it will not be maintainable, that is because the Act was supposed to ward off personal fights, spats and ss. Clearly, this is a derailed powergrab on epic scale by Mistry foiled by an astute BOD. The waters of Tata and India are calm now with Chandra at the helm.
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