Millennium Post

NCLAT rejects Mistry's plea against Tata Sons' EGM on Feb 6

Cyrus Mistry camp on Friday failed to get any relief from the National Company Law Appellate Tribunal (NCLAT) which dismissed the petitions by two investment firms, backed by Mistry family, to stay February 6 EGM of Tata Sons to remove the ousted chairman from the board.

The NCLAT declined to stay the scheduled EGM of Tata Sons, and during the proceedings it suggested parties to go for an "honourable settlement" as it was denting the image of both sides and may hurt their business interests and morale of their employees as well.

"We are not going to grant any relief. We are dismissing the three appeals. We would pass a detailed order later," said a two-member bench headed by Justice S J Mukhopadhaya.

Today when the proceedings commenced, the tribunal asked counsels representing both the sides to consult and explore any "probability of sitting between parties to find any honourable settlement" and adjourned the matter for 15 minutes.

However, both the side could not reach on a common point.

Senior advocate C A Sundaram appearing for the two Mistry family-backed investment firms suggested to defer the EGM for one or two months and during this period his side would negotiate and try to resolve the issue.

He also assured that during that period Mistry would not attend any meeting as director.

"Defer the meeting for 30 to 60 days, we will try and settle the issues and he will voluntarily not attend any meetings as the director. Do not remove him ... you cannot call settlement in such environment," said Sundaram.

However, senior advocate Abhishek Manu Singhvi representing Tata Sons said, "Let the meeting take place as mandate of the shareholders should be honoured ... However we will keep one seat vacant on the board for next 30 days."

Rejecting it Sundaram said: "You first say me that you would hit me and then talk about settlement."

During the proceedings Sundaram argued that Mistry was representing the interest of two investment firms - Cyrus Investments and Sterling Investment Corporation.

"His removal is an act of oppression against the minority shareholders. His father Shapoorji Mistry was on the board of Tata Sons 1980 to 2004 and then Cyrus Mistry came on the board in 2006," submitted Sundaram.

Rejecting it, Singhvi submitted: "From 1965 to 1980, nobody was there on the board from Shapoorji Pallonji. There is no quota from the petitioner shareholder to nominate a director on the company."

Tata side also questioned the maintainability of the petition at NCLT as Mistry's shareholding is less than the prescribed limit as mandated by the Company Act.

"If you put his entire shareholding as defined under the Companies Act, it comes to 2.2 per cent," he said.

Singhvi further said: "Petitioners conduct is deplorable.

I cannot find a milder word. According to me his conduct deserves no concession but I am giving him a concession of keeping the seat vacant."
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