The National Company Law Tribunal on Thursday refused to hear the plea for interim relief of Cyrus Investments company pending disposal of a petition filed by family-owned companies of Cyrus Mistry, the ousted chairman of Tata Sons, alleging “oppression and mismanagement” in Tata Sons.
NCLT division bench comprising B S V Prasad Kumar (Member-Judicial) and V Nallasenapathy (Member-Technical) decided to finally hear the petition filed by Cyrus Investments Pvt Ltd and Sterling Investments Corporation Ltd, on January 31 and February 1 next year, saying it would not consider granting interim relief now or entertain interim proceedings. The bench asked Mistry, Respondent No 11, to file a reply to the petition within a week. It also directed Tata Sons and other respondents to file a reply within 15 days, after Mistry files a reply. They have been asked to respond to Mistry’s reply and the petition.
The petitioner’s lawyer sought an interim relief to restrain Ratan Tata from attending any board meetings of Tata Sons or interfering in the affairs of Tata Sons. It also sought an interim relief from the tribunal to restrain Ratan Tata and other directors from removing Mistry as director of Tata Sons and other companies. The other prayers in the petition included superseding the board of Tata Sons and appointing an administrator to control its affairs. In the alternative, the petition sought to appoint a retired Supreme Court judge as a non-executive chairman of Tata Sons to appoint new independent directors.
The petition also prayed for a direction to Tata Sons not to issue any securities which result in dilution of the present paid-up capital of the petitioners in Tata Sons.
The NCLT directed the petitioner companies to file a rejoinder a fortnight thereafter. Mistry filed the petition in NCLT after quitting from the boards of all listed companies earlier this week.
The bench made it clear that instead of hearing the parties on the point of interim relief, it would hear the matter expeditiously and give an order in about a month. With the consent of the parties, it then fixed January 31 and February 1 next year for hearing the matter and deciding expeditiously. The NCLT also asked the parties to argue first on the maintainability of the petition and then on the merits. Mistry’s family-owned companies had moved the NCLT under Sections 241 and 242 of the Companies Act which deal with relief in case of oppression and powers of the tribunal to act in such cases, respectively.
Mistry, who was removed as the chairman of Tata Sons, continues to be on the board of the holding company. Mistry’s family holds over 18 per cent in Tata Sons while Tata Trusts headed by Ratan Tata, the newly appointed interim chairman, has a 66 per cent stake. The petition, argued by senior counsel A Sundaram, urged the tribunal to direct Tata Sons and its Interim chairman Ratan Tata not to remove Mistry from the board of the holding company and other Tata Group companies until the petition is finally heard and disposed of.
Alleging oppression in the holding company, the petition alleged that Tata Sons had made a veiled threat in a special notice under section 169 of Companies Act (to remove directors) to the extent that if Tata operating companies and non-promoting directors do not support the removal of Mistry as director, these companies would no longer have the right to use ‘Tata’ brand name.