Mistry firms challenge NCLT order on maintainability at NCLAT

MUMBAI: Ousted Tata Sons chairman Cyrus Mistry and his family investment firms have moved the National Company Law Appellate Tribunal (NCLAT). The move comes days after the National Company Law Tribunal (NCLT) on April, 17 dismissed their petition seeking a waiver on the quantum of shareholding.

It may be noted that Cyrus Investments Pvt Ltd and Sterling Investments Pvt Ltd urged the NCLT to waive the requirement that shareholders must hold at least 10 per cent of a firm to file a petition alleging mismanagement and oppression.

Section 244 of the Companies Act 2013, lays the threshold to bring a case of oppression and mismanagement under Section 241. It gives the tribunal discretion to allow a shareholder or group of shareholders to bring a case of oppression and mismanagement even if they represent less than 10 per cent of the total shareholding or one tenth of all shareholders.

Though the petitioners together hold 18.4 per cent worth ordinary shares in Tata Sons, the NCLT had quashed their petition filed in March stating that they have only 2.17 per cent ownership stake or preference shares that entitle them the ownership rights. This, the counsel for the Mistry and family, had argued to be waived in national or public interest, which the NCLT had quashed early this week. “The petitioners have failed to convince the court that the application is maintainable,” B S V Kumar, presiding member of NCLT said during the March hearing.

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