National Company Law Tribunal holds Cyrus Mistry’s competition petition not maintainable

Mumbai: The National Company Law Tribunal(NCLT) has held that petitions filed by Cyrus Mistry's firms are non maintainable.

"Mistry's companies have failed to satisfy us (NCLT) on the minimum 10 percent shareholding eligibility criteria under the Companies Act and hence, these petitions are not maintainable," said a division bench of B S V Prakash Kumar (member-judicial) and V Nallasenapathy (member-technical).

Mistry’s firms — Cyrus Investments Pvt Ltd and Sterling Investments Pvt Ltd — had alleged oppression of minority shareholder rights and mismanagement at the Tata Group in the main petition file with the NCLT on December 20.

The National Company Law Tribunal (NCLT) also said on Tuesday it would hear the plea of Mistry's companies seeking waiver of the eligibility criteria of 10 percent shareholding, required under the Companies Act for moving the NCLT against Tata Sons.

The Companies Act also provides for these conditions to be waived by the tribunal as per its discretion, but the lawyers of Tata Sons argued that since the petitioners did not seek waiver at the time of filing the petitions, they cannot ask for such a leave later. 

Reportedly, Mistry's lawayer wanted NCLT to clear its position on the maintainability of the case before starting his arguments on the main petition so that he could appeal against any adverse decision. 

In December 2016, the two firms had challenged before the NCLT the unceremonious removal of Cyrus Mistry by Tata Sons as a director of its board.

With PTI inputs