NCLT dismisses Mistry’s petition against Tata Sons

THE NATIONAL Company Law Tribunal (NCLT) on Monday refused to grant a waiver to former Tata Sons chairman, Cyrus Mistry’s family-owned companies from a shareholding requirement that would have allowed the companies to file a petition against the Tata Sons and also dismissed the company petition alleging oppression of minority and mismanagement at the Tata’s holding company.

On March 7, Cyrus Investments Pvt Ltd and Sterling Investments Pvt Ltd — companies owned by Cyrus Mistry’s family — requested the tribunal to waive the requirement that shareholders hold at least 10 per cent of a company to file a petition against promoters.

The NCLT, by its order dated March 6, 2017, had held that the claims made by the Shapoorji Pallonji Group companies, espousing the case of Mistry, was not maintainable, as it did not meet the minimum shareholding threshold of 10 per cent of issued share capital prescribed under Section 244 of the Companies Act, 2013. On Monday, the NCLT passed a further order dismissing the waiver application made by them for granting exemption from meeting those shareholding threshold requirements, as also the company petition alleging oppression of minority and mismanagement at Tata Sons.

Tata Sons welcomed the ruling of NCLT dismissing the waiver application and the company petition,whichwasfiledagainsttata Sons by shareholders linked to Mistry. FN Subedar, chief operating officer of Tata Sons, said: “We are pleased that Mistry’s claims have been dismissed by the NCLT. The order of the NCLT represents a vindication of our position.”

“We hope this brings to an end a vexatious campaign against the company, the Tata Trusts and Ratan N Tata ...” Subedar said. Tata Sons has interpreted the ruling by the NCLT as demonstrating that the petitioners failed to make a convincing or compelling case that warranted a hearing on alleged mismanagement, oppression or other actions. The NCLT ruling of April 17, 2017, is the fifth such ruling by the company law tribunals rejecting reliefs requested by the Shapoorji Pallonji Group companies and Cyrus Mistry.

“Mistry has made many illadvised and groundless allegations intended to besmirch the name of the Tata Group,” said Subedar. “Today’s ruling by the NCLT makes clear that there is no case to be heard. Over the past six months, Mistry has failed demonstrably to build a case. We trust that the NCLT’S decision brings this matter to a close,” he said. Mistry family’s firms are now likely to move the National Company Law Appellate Tribunal (NCLAT) against the NCLT order.

On December 20, a day after resigningfromtheboardsoflisted Tata group of companies, Cyrus Mistry filed a suit in the NCLT against Tata Sons for “oppression and mismanagement” in the Tata group holding company. On October24,2016,theboardoftata Sons had removed Mistry as the chairman of Tata Sons.