Mistrys At The NCLT Today: Back To The Basics Of Law
Mistry counsel argues on fundamentals of oppression and mismanagement at the NCLT.
Tata Sons Ltd.’s prejudice against the interests of the two Mistry family firms that own 18 percent state in the company is enough for the National Company Law Tribunal to intervene.
That’s what ousted Tata Sons’ Chairman Cyrus Mistry’s counsel said in the NCLT today. Aryama Sundaram argued on the fundamentals of law under Sections 241 and 242 of the Companies Act 2013 which lay out the oppression and mismanagement framework.
Under Section 241, a shareholder can urge the NCLT to intervene if he feels that the affairs of the company are being conducted in a manner that prejudices public interest or a shareholder or the company itself, Sundaram said. The shareholder does not have to show that such prejudice was oppressive or unfair, Sundaram argued, adding that he has to show that that there was a damage or injury to his right.
The Mistry side started its rejoinder today in his petition against Tata Sons, after the Tata Group’s holding company’s counsel argued their case in the last eight days.
The NCLT began hearing the petition in November after the appellate tribunal granted the Mistry firms waiver from the 10 percent shareholding requirement to pursue oppression and mismanagement charges against Tata Sons. The dispute stems from Mistry’s removal as Tata Sons chairman in October 2016 and later as a director. Mistry’s counsel cited his ouster as instances of prejudice.
Mistry firms will continue their rejoinder on Monday.