NCLAT decides to hear both Mistry pleas together in July

NEWDELHI:The National Company Law Appellate Tribunal (NCLAT) decided on Thursday to simultaneously hear two cases filed by the family firms of Cyrus Mistry, ousted chairman of Tata Sons Ltd.

NCLAT will decide on the maintainability of a petition alleging oppression of minority shareholders and mismanagement at Tata Sons and also on a plea to waive the shareholding requirement to press the case.

A bench headed by justice SJ Mukhopadhaya held that the cases would be heard together but decided separately.

The case will be heard next on July 3.

Cyrus Investments Pvt. Ltd and Sterling Investments Pvt. Ltd moved the NCLAT last month against a March 6 order by the National Company Law Tribunal (NCLT) that the original petition was non-maintainable.

Under the new Companies Act, shareholders are required to hold 10% equity to be qualified to file such a petition. The two Mistry firms own a combined 18.4% of ordinary equity shares of the Tata group holding firm, but their holding falls below 10% when preference shares are taken into account. According to the Tatas, Mistry firms hold only about 2.17% then.

On Thursday, CA Sundaram, the counsel for the Mistry family firms, told the NCLAT that equity shareholders and preference shareholders were “separate and distinct classes which were mutually exclusive”.

Sundaram said the 10% criteria should not be the only reason to decide on the waiver and there should be some remedy for the class of people who had a sizeable shareholding and have been oppressed.

“If the statute itself has recognized a special class of shareholders and allowed for a complaint not only regarding oppression of a company but also its members, it could not have been its intent to leave that class remedy-less,” he added.