Tata Sons today opposed a petition filed by two firms belonging to its ousted chairman Cyrus Mistry’s family seeking waiver of an eligibility condition for moving the National Company Law Tribunal. The rationale behind the condition was to ensure stability, Tata Sons said.
The Mistry family firms have challenged Cyrus Mistry’s removal as a director of Tata Sons. Mistry was unceremoniously removed as the Tata Sons chairman last year. Tata Sons’ lawyer Abhishek Manu Singhvi argued before the NCLT bench of B S V Prakash Kumar and V Nallasenapathy today that the Company Act intended not only to curb vexatious litigation by imposing a condition of 10 per cent stake, but also to ensure “stability” of the company.
Most of the allegations of oppression and mismanagement made by the Mistry firms were not against the Tata Sons, he said. A waiver should be granted only under exceptional and compelling circumstances such as national or public interest, Singhvi said.
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Mistry’s lawyer Aryama Sundram is likely to argue on April 4. Under the Company Act, a petitioner should hold at least one-tenth of the “issued share capital” of the company or represent at least one-tenth of its minority shareholders to be eligible to move the NCLT.
Tata Sons have argued that if preference capital is also considered, the two Mistry firms hold only 2.17 per cent of the total issued share capital of Tata Sons.
NCLT can waive this condition, but Tata Sons argued that since the petitioners did not seek waiver at the time of filing the petitions, they cannot ask for it later.