The National Company Law Appellate Tribunal (NCLAT) on Wednesday admitted a petition moved by ousted Tata Sons chairman Cyrus Mistry.
The National Company Law Appellate Tribunal (NCLAT) on Wednesday admitted a petition moved by ousted Tata Sons chairman Cyrus Mistry, in his personal capacity, seeking to set aside an order of the Mumbai bench of the National Company Law Tribunal (NCLT) upholding his removal. In the July 9 order, the NCLT bench had dismissed Mistry’s plea challenging his removal as Tata Sons chairman.
The appellate tribunal also issued notices to Tata Sons and other respondents, asking them to reply in 10 days. The matter will now be heard on September 24 along with the original plea filed by Cyrus Investments (Mistry’s family firm) challenging Mistry’s ouster.
During the course of the hearing, Tatas’ counsel stated that they would wish to raise objections on the maintainability of the petition. However, the two-member NCLAT bench, headed by justice SJ Mukhopadhaya, refused. “How can there be an objection to an appeal? Don’t argue on maintainability, file your reply,” the bench said.
In his plea, Mistry also sought expunging of remarks and some words used in the July 9 order.
On August 24, the NCLAT had passed an order over the petitions filed by the investments firm of the Mistry family and directed Tata Sons not to force the companies to sell their shares in the Tata holding firm, but it refused to stay the conversion of the holding firm into a private company from a public limited one.
The conversion of a company into a private one from a public limited one restricts minority shareholders from selling their shares to external parties. Further, under Article 75 of the articles of association, the Tata Sons board can force a minority shareholder to sell out.
Mistry’s family firms had in the NCLAT challenged the move by Tata Sons to restrict shareholders from freely selling their stake and the Article 75 of the articles of association that can be used by the board to force a shareholder to sell out.
“Taking into consideration the facts and that the appeal is pending and if the Appellants (investment firms) are forced to sell their shares which may affect the merits of the appeal, as they will cease to be member(s) of the company (Tata Sons). We direct the Respondents (Tata) not take any step in terms of Article 75 for transfer of shares of minority shareholders like Appellants (Mistry) and others during the pendency of the appeal,” the appellate tribunal said.