NCLT rules out Cyrus Mistry's petition against Tata Sons

National Company Law Tribunal (NCLT) has ruled that Cyrus Mistry’s petition is not maintainable, saying that his family firms are not qualified to file a petition alleging mismanagement of Tata Sons and oppression of minority shareholders.

"The petitioners have failed to convince the court that the application is maintainable," said B.S.V. Kumar, presiding member of NCLT. As per rules of the Companies Act, 2013, shareholder needs at least 10% to file a petition in the NCLT. Mistry's family firms - Cyrus Investments Pvt Ltd and Sterling Investments Pvt Ltd - hold only 2.17% shares of the total share capital (equity + preference shares) of Tata Sons.

Whether or not the requirement can be waived will be decided on 7th March.

It was in December 2016 that Mistry had filed a petition alleging oppression of minority shareholder rights and mismanagement at the Tata Group.

In case NCLT waives the requirement, Tata Sons could challenge it in National Company Law Appellate Tribunal (NCLAT), because by law, this kind of waiver has to be sought before a petition is filed. In case NCLT rules against a waiver, Mistry could go to court against today's ruling and also on the waiver petition.

In October last year, Mistry was removed as the chairman of Tata Sons, leading to a public spat between Mistry and Tata Group. While the group said that Mistry was not a good leader, he accused Tata Sons poor corporate governance practices.

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He then went on to file a 344-page petition, in which he shared the minutes of several board meetings, details of business deals and emails, which, as per Tata Sons was making 'confidential and sensitive' information public. Tata Sons in turn filed a complaint against Mistry with the Securities and Exchange Board of India (SEBI).

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