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In a breather to ousted Tata Sons Chairman Cyrus Mistry, the National Company Law Appellate Tribunal (NCLAT) has agreed to waive the condition that requires a minimum 10 per cent shareholding to file a petition before the NCLAT.
It also directed the NCLT to hear the petition and pass an order in three months.
The Mistry camp had sought a waiver on the condition in the Companies Act that a firm or person should hold a minimum of 10 per cent of the shares of the company concerned to file a petition before the NCLT.
The waiver was sought after Tata Sons alleged that the Mistry camp had no locus standi to move the NCLT, as the Shapoorji Pallonji group owns only 2.17 per cent of Tata Sons’ share capital.
In April, the NCLT had refused to give a waiver to Mistry following which an appeal was filed with the tribunal.
On Thursday, the NCLAT recognised the situation as “an exceptional circumstance” while overruling NCLT’s order.
“Mistry’s stand is vindicated…. NCLAT is agreeing that there are serious issues that need to be heard, which they (Tatas) wanted to suppress,” C Aryama Sundaram, counsel for the Mistry camp, told BusinessLine .
However, the appellate tribunal upheld the NCLT’s views on maintainability of Mistry’s appeal, which cited governance lapses and a compromise of minority shareholder interests by Tata Sons.
On April 17, NCLT’s Mumbai bench had rejected both the waiver petition and maintainability. “This makes the maintainability case irrelevant. The battle on maintainability is lost, but the war on waiver is won,” said another lawyer who works with Mistry’s team.
“The ruling of 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 Ltd. We will continue to pursue the 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,” a statement from Cyrus Mistry’s office said..
“These are proceedings to protect and reinforce the values for which the founders of the Tata Group have given us the legacy that we should strive never to lose,” it added.
Tata Sons reacts Tata Sons said it has taken note of the NCLAT order and 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.
On October 24, 2016, Mistry was ousted as Tata Sons chairman following a boardroom war, and later as a Director on the board of the holding company, on February 6, 2017.
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