The National Company Law Tribunal (NCLT) will on Friday pronounce its decision on the plea of ousted Tata Sons chairman Cyrus Mistry’s investment firms, seeking transfer of their case alleging mismanagement and oppression of minority shareholders by Tata Sons from NCLT Mumbai to the principal bench in the capital or any other appropriate bench.
The National Company Law Tribunal (NCLT) will on Friday pronounce its decision on the plea of ousted Tata Sons chairman Cyrus Mistry’s investment firms, seeking transfer of their case alleging mismanagement and oppression of minority shareholders by Tata Sons from NCLT Mumbai to the principal bench in the capital or any other appropriate bench. After hearing both the sides, the principal bench of the NCLT, headed by chairman Justice MM Kumar, reserved its judgment on Thursday.
During the hearing, the chairman observed that “if we start transferring the petitions, it will affect propriety of the bench…We don’t do it unless there is a compelling reason to do so…We don’t want to encourage this practice. NCLT has to work independently”.
The two family firms – Cyrus Investments and Sterling Investments Corporation – said since the NCLT Mumbai bench had earlier decided the case on the merit, the same bench cannot be expected to deliver “the judgment on merits uninfluenced by its own earlier firm and conclusive assessment of merits”.
Clarifying that they are not making any allegations of “personal bias” against the Mumbai bench, senior advocate CA Sundaram, representing the Mistry group, argued that the Mumbai bench had already gone into the merits of the case while deciding the waiver petition. “We are asked to go before a forum (NCLT Mumbai bench) which has already judged the issue,” he argued.
Even while the petition was not being heard on merit but on waiver (from the minimum shareholding requirement to raise the issue), the Mumbai bench comprising judicial member BSV Prakash Kumar and technical member V Nallasenapathy had given “findings on the merits of each allegation and categorically ruled that there was no cause of action at all and that the petition was without merit”, the firms pointed out.
However, Tata Sons opposed any transfer, saying it was a case of “bench hunting” and “forum shopping” and the new application should be rejected at the threshold. Senior counsel Abhishek Manu Singhvi, Mukul Rohatgi and Amit Sibal, appearing for Tata Sons, said, “This should be dismissed at threshold. They have suppressed the facts that they have already raised the transfer issue twice before the appellate tribunal…transferring the case will send wrong signals. It is forum shopping and also unfair on the Mumbai tribunal. We are seeking dismissal of the case.”
Sibal argued that “to have a bench of their liking”, the Mistry group was “making repeated prayers before the NCLAT. When the prayer was not granted, they filed it here. Isn’t it bench hunting,” he asked.
The National Company Law Appellate Tribunal (NCLAT) on September 21 had granted the firms a waiver from the minimum shareholding requirement of 10% for filing a case against Tata Sons for alleged mismanagement and oppression of minority shareholders. Setting aside the NCLT’s April 17 order that had rejected the waiver plea of Mistry’s firms, the appellate tribunal had directed the Mumbai bench of the NCLT to allow the Mistry family firms to present their case and decide on it on merits within three months.