 "Big setback for Mistry firms at NCLT")
The National Company Law Tribunal (NCLT) on Monday held that the two petitions filed by Cyrus Mistry’s family companies against his ouster from Tata Sons were not maintainable, as they did not fulfil the eligibility criteria for approaching it.
The NCLT said it would hear the plea of Mistry’s companies on Tuesday, seeking waiver of the eligibility criteria of 10 per cent shareholding, required under the Companies Act for moving the NCLT against Tata Sons.
“Mistry’s companies have failed to satisfy us (NCLT) on the minimum 10 per cent shareholding eligibility criteria under the Companies Act and hence, these petitions are not maintainable,” said a division bench of B S V Prakash Kumar (member-judicial) and V Nallasenapathy (member-technical). The Tata Sons opposed the petitions, saying that as per a Supreme Court order, the petitioners were not eligible under the Companies Act as minority shareholders to file such pleas before the NCLT.
Mistry’s firms pleaded that under the Act, the NCLT could waive the requirement that a petitioner hold at least a tenth of the ‘issued share capital’ of the company or represent at least one-tenth of the minority shareholders.
Tata Sons argued that if preference capital also considered, the two petitioner firms hold only 2.17 per cent of the issued share capital. The Companies Act save these conditions to be waived by the tribunal but the lawyers of Tata Sons argued that the petitioners did not seek waiver at the time of filing the petitions, they couldn’t ask for such a leave later. In December 2016, the two firms had challenged before the NCLT the unceremonious removal of Cyrus Mistry by Tata Sons as a director of its board.
The petitions alleged mismanagement at Tata Sons and oppression of minority shareholders.