Till April 17: NCLT reserves order on waiver plea by Mistry family firms

A few days after filing his petition alleging oppression of minority shareholders by Tata Sons, Mistry sought such a waiver

Cyrus mistry, Mistry, TATA, Tata sons, tata company, Tata companies, Cyrus mistry companies, NCLT, Business news, indian express news

Cyrus Mistry: Former Tata Sons Chairman.

The Mumbai bench of the National Company Law Tribunal (NCLT) on Tuesday finished hearing the arguments from lawyers of ousted chairman Cyrus Mistry and Tata Sons on whether or not it was willing to/should waive the eligibility criteria for minority shareholders to seek relief for oppression. It, however, reserved the order for April 17.

According to section 244 of the Companies Act, to seek relief for oppression, the petitioner(s) need to comprise of ‘not less than one hundred members of the company or not less than one-tenth of the total number of its members, whichever is less, or any member or members holding not less than one-tenth of the issued share capital of the company’. However, it has also given the tribunal, the discretionary power to waive off this requirement if a petitioner makes an application for the same.

A few days after filing his petition alleging oppression of minority shareholders by Tata Sons, Mistry sought such a waiver stating that if it is not granted, ‘the grave issues raised in the petition would go entirely uninvestigated’. Mistry’s petition states that Tata Sons’ preference shares neither carry voting rights at a general meeting, nor carry the right to receive bonus shares and are to be redeemed within 20 years.

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“Although the petitioners do not meet the strict legal requirements of section 244 (1) (b), because of the number of members in the register of members, the reality of the matter is that they constitute one of the two group of members in a very closely held company,” the petition reads.

In January, The National Company Law Tribunal (NCLT) had dismissed a contempt petition filed by two Mistry family companies against Tata Sons and its directors, including Ratan Tata, alleging violation of NCLT directives in taking steps to remove Mistry from the Board. The tribunal had observed saying there is “ no contempt” by Tata Sons in the issue.

Cyrus Investments Ltd and Sterling Investment had filed a contempt petition seeking injunction against Tata Sons
barring from “convening or holding of the EGM scheduled for February 6, 2017 or any other date or from transacting any business threat.

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