NCLAT GRANTS WAIVER ON CYRUS MISTRY PLEA

The National Company Law Appellate Tribunal (NCLAT) on Thursday allowed Cyrus Investments and Sterling Investments a waiver to pursue its case of oppression and mismanagement against Tata Sons.

The Bench headed by Justice S J Mukhopadhaya, however, dismissed the other appeal on maintainability, saying that the firms did not possess more than 10 per cent of shares in Tata Sons — a requirement for filing the case, unless waiver is otherwise granted (Section 244 of the Companies Act 2013).

The appellate body has directed the Mumbai Bench of the National Company Law Tribunal (NCLT) — which had dismissed both the petitions on maintainability and waiver on March 6 and April 17, respectively — to issue fresh notice to the respondents and dispose of the matter within three months.

“The ruling of the NCLAT is a welcome vindication of what we have stood for and the values for which we are pursuing the petition against oppression and mismanagement of Tata Sons Limited,” said a statement issued by the office of Cyrus Mistry.

“We will continue to pursue highest standards of corporate governance and demand complete transparency of the group for the benefit of all the millions of shareholders, and indeed, the employees of the Tata group companies,” the statement added.

Cyrus Mistry had first approached the NCLT in December 2016 after his ouster as chairman of Tata Sons on October 24, the same year. Subsequently, he was also removed as director from the board of the holding company on February 6. The Mistry companies own a combined 18.5 per cent of ordinary equity shares in Tata Sons, but their shareholding falls below the 10 per cent requirement when preference shares are taken into account. Considering such a situation, the firms had also argued for a waiver of this eligibility criteria.

However, the NCLT denied the main petition on maintainability and also refused to allow them the waiver to pursue the matter. Aggrieved by these decisions, the Mistry camp then went in appeal to the NCLAT. The appellate tribunal had concluded the joint hearing of both appeals and reserved its judgment in the matter on July 24.

“Tata Sons has taken note of the order of the NCLAT and we will examine it. We strongly believe that the allegations made by the petitioners are without basis and incorrect. Tata Sons will continue to defend its position at all appropriate legal forums,” said a Tata Sons spokesperson in response to Thursday’s decision.

The Mistry firms own a combined 18.5% of ordinary equity shares in Tata Sons